Arbitration and mediation are two forms of what is known as "alternative
dispute resolution". These are methods by which two or more parties who
have a dispute or issue can
attempt to resolve their differences either
without resorting to going to court at all or, if they have already
lawsuit, at least without leaving it to a judge or jury to decide.
With arbitration the parties go before a neutral evaluator of fact, not
unlike a judge. In fact, arbitrators are often retired judges, although
they don't have to be.
During the arbitration the parties will present their facts, evidence,
and other information to the arbitrator, who will then make a decision.
Again, this is not unlike what a judge does, however without the
formality of a Court
and without having to dot quite as many "I"s or cross quite as many "T"s as
one does when going to court. In addition, the rules of evidence are
often relaxed, allowing the parties to share what is
important and relevant to their case without having to worry about the
legal intricacies and 'gotchas'.
After the parties present all of their information to the arbitrator, the
arbitrator will make a decision - a ruling - as to what will be the
outcome of the case.
The decision of the arbitrator can either be final (known as "binding
arbitration") or provisional (this is known as "nonbinding arbitration",
and the parties can choose to accept the
arbitrator's decision, or one of them can choose to take their chances
in court rather than accepting the arbitrator's decision).
Mediation, by contrast, is typically performed by someone who has
training as a counsellor or alternative dispute resolver, but is not
usually performed by someone with a judicial or even a legal background
(although attorney-mediators are becoming more common).
Where arbitration is intended to provide a decision about the issues
made by a neutral third-party, mediation is designed to help the parties
to reach their own decision. Thus a mediator will help to facilitate
discussion between the parties, and try to help them to reach some sort
of equitable middleground to which they can both agree.
Whether arbitration, mediation, or some other method, alternative
dispute resolution is almost always preferable to leaving your fate to the Court, as it leaves the outcome much more in your own
hands, rather than in those of a single stranger on the bench, or a jury
of twelve strangers.