Difference Between Arbitration, Mediation, and Litigation

In business, disputes can arise anytime—over virtually any issue. There are many choices available to business owners regarding how to handle a dispute, especially when deciding what kind of ongoing relationship you as a business owner want to have with the other party once the conflict is resolved. Understandably, companies and individuals alike are often confused about which dispute resolution process to apply to their situation.

The term “alternative dispute resolution” comes up frequently when deciding how to resolve business conflicts. However, the difference between arbitration, mediation, and litigation can be significant and have a lasting impact on business relationships following the resolution of a dispute. The BrewerLong team has been helping Florida businesses choose the best method of alternative dispute resolution for their conflict for 15 years. Read on to learn more about the differences between each kind of dispute resolution and which one might be right for your situation.

Litigation vs Arbitration vs Mediation: Understanding the Differences

Litigation involves a formal legal process where a judge or jury makes the final decision on a case, adhering to structured rules and procedures. In contrast, arbitration allows disputing parties to resolve their issues outside of court, with an arbitrator making the binding decision. Mediation, on the other hand, is a more collaborative approach where a neutral third party helps the disputants reach a mutually acceptable solution, focusing on creative and flexible resolutions without imposing a decision. Unlike litigation and arbitration, where the outcome often involves a winner and a loser, mediation aims for a consensus that satisfies all parties involved.

Differences Between Arbitration and Mediation

Arbitration is a binding form of dispute resolution where a judge or a professional arbitrator hears evidence and gives the parties a binding decision. Arbitration is often agreed to by contract long before a dispute arises. Arbitrators are typically mutually agreed upon by the parties and are usually lawyers familiar with the subject area of the parties’ business or dispute. 

The arbitration process is similar to mediation in that it is not as formal as “going to court,” but it typically resembles litigation more than mediation. Arbitration follows a more formal structure than mediation and includes a discovery process where parties can request documents and information from each other to help bolster their own cases. For example, the parties submit briefs to the arbitrator in most arbitrations. They argue their points before a decision-maker. Unlike mediation, arbitration is binding.

Mediation, on the other hand, is a dispute resolution process that helps the parties resolve their conflict without binding intervention. In mediation, a professional mediator works with both sides to explore their positions and see if they can reach common ground. In contrast to arbitration, the mediation process is much more like a group discussion and negotiation. Unlike an arbitrator, a mediator is not a decision-maker. Some mediators will offer their opinion about a likely outcome if the case is not resolved through mediation. However, the role of the mediator is to guide the parties to resolve the dispute between themselves—neither party can be forced to settle.

Differences Between Mediation and Litigation

Mediation is often optional unless required by contract or mandated by a court, and it is always non-binding. On the other hand, litigation outcomes are always binding. Civil litigation is often the dispute resolution process that people are most familiar with. It involves a plaintiff squaring off against a defendant before an impartial finder of fact, like a judge or jury. The judge or the jury is responsible for weighing the evidence and making a ruling. 

Litigation is also a much more structured process than mediation. Mediators work to help disputants identify solutions between themselves. Litigation focuses on the problems that the disputants have self-identified. It puts much less of a focus on identifying mutually agreeable solutions in a collaborative process.

Judges generally have the authority to do things that mediators cannot do. As we have mentioned, mediators cannot issue binding decisions. Furthermore, mediators cannot subpoena information or conduct the type of robust discovery process that a judge can order. One of the key differences between litigation and mediation is that, in mediation, if both parties to the disagreement are not willing to cooperate with each other, a resolution will not be achieved. In litigation, the judge can order relief without cooperation between the disputants.

Differences Between Arbitration and Litigation 

In arbitration, a neutral third party serves as a judge who is responsible for resolving the dispute. In most cases, the arbitrator is a lawyer or someone with legal experience, but their decisions, while binding by virtue of the agreement of the parties, do not have the force of law. This differs from litigation, where a judge presides over the matter and acts as a finder of fact, even if a jury ultimately decides the case’s fate.

Arbitration also has a lot more flexibility than litigation. While it has a more formal process than mediation, arbitration still allows parties the ability to agree on procedural rules, scope, and format in a way that litigation does not. 

How BrewerLong Can Help You Navigate a Dispute

If you need help understanding your options for alternative dispute resolution, we can help. At BrewerLong, our experienced team has worked with small businesses across Florida and the United States to make mediation, arbitration, or litigation as smooth as possible for you and your business. As attorneys focused on small business law, we give every client the close personal attention they deserve so we can provide clear and practical guidance through their most complicated legal situations. Contact the BrewerLong team today.

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