Arbitration is a form of alternative dispute resolution (ADR) in which a neutral third party, called an arbitrator, is appointed to hear and decide a dispute between two or more parties. The parties to the dispute agree to be bound by the arbitrator’s decision, which is usually final and binding.
Arbitration can be used to resolve disputes in a wide range of areas, including commercial disputes, employment disputes, and disputes related to construction, real estate, and other industries. It is often used as an alternative to going to court, as it is typically faster and less expensive than litigation.
Arbitration proceedings are usually private and less formal than court proceedings. The rules of evidence and procedure may be more relaxed than in a court of law. The parties may also have more control over the selection of the arbitrator, the location of the arbitration, and other procedural aspects of the arbitration.
Arbitration agreements can be included in contracts between parties, and in some cases, arbitration is mandatory by contractual agreement to dispute resolution or by industry practice.
Mediation is a voluntary process where a neutral third party, called a mediator, helps the disputing parties to reach a mutually acceptable resolution. The mediator does not have the authority to make decisions or impose a solution, but rather helps the parties to communicate and negotiate effectively. Arbitration, on the other hand, is a more formal process where a neutral third party, called an arbitrator, hears evidence and arguments from both sides and then makes a decision to resolve the dispute. The decision of the arbitrator is binding, meaning that the parties are required to accept it.
Mediation is usually less formal than arbitration, and the rules of evidence do not apply. Mediation is typically less expensive and faster than arbitration or court proceedings. Arbitration is more formal and often similar to court proceeding, and the rules of evidence apply. Arbitration can be faster and less expensive than court proceedings, but it may be more expensive than mediation.
Mediation is often used in cases involving disputes between family members, such as divorce or child custody cases, disputes between business partners, and disputes between neighbours. Arbitration is often used in disputes involving commercial or business transactions, such as disputes between companies or disputes involving employment law. Mediation is confidential and non-binding, meaning that the parties can walk away from the process at any time. Arbitration is binding, meaning that the parties must accept the decision of the arbitrator, and the proceedings are usually not confidential.