Arbitration vs. Mediation

Before discussing the differences between arbitration and mediation, let’s start with the similarities between the two. Both arbitration and mediation are alternatives to traditional litigation. When two opposing parties come to a head, arbitration or mediation can be used to find a solution without a trial. According to the Bureau of Labor Statistics (BLS), both arbitration and mediation involve a neutral third party who oversees the process and tries to help participants find common ground during a dispute.¹

What Is the Difference Between Arbitration and Mediation?

Here’s how arbitration and mediation are different:

Arbitration 101
Arbitration — which can be either a binding or nonbinding process — is when an arbitrator (oftentimes a lawyer), rather than a judge or jury, applies the law to the facts of the case at hand and offers a solution or award.

Binding vs. Nonbinding Arbitration
Binding arbitration means that the parties waive their right to a trial and agree to accept the arbitrator’s decision as final. According to the American Bar Association (ABA), when arbitration is binding, the decision can be enforced by a court, and can only be appealed on very narrow grounds.²

Nonbinding arbitration means that the parties can request a trial if they do not accept the arbitrator’s decision.

Instances Where Arbitration May Be Used
Arbitration can be used in complex disputes where parties want another person to find a fair solution, but would like to avoid the formality, expense, and time that is required for a trial.

What Do Arbitrators Do?
Arbitrators listen to the evidence presented by each side and come up with a decision in writing. Arbitrators must be impartial listeners and need to base their decision on the law.

How Do I Become an Arbitrator?
According to BLS, qualifications, standards, and the number of training hours required vary by state or by court. Some states require arbitrators to become certified to work on certain types of cases. For example, some courts may require applicants to be licensed attorneys or certified public accountants.¹

Mediation 101
Mediation is a confidential, nonbinding process in which a mediator facilitates communication between two parties in an effort to find a mutually acceptable solution.

How It’s Different From Arbitration
Unlike an arbitrator, the mediator is not the decision-maker and does not resolve the dispute — but rather facilitates communication so the parties can reach a resolution that works for both of them.

Instances Where Mediation May Be Used
Mediation is especially useful when opposing parties have a relationship they want to preserve. During disputes with family members, neighbors, or business partners, a mediator can help clear the air and lead the conversation in a constructive manner in order to reach an amiable solution.

What Do Mediators Do?
According to the ABA, a mediator is an impartial, neutral intermediary who helps participants see where they are getting hung up, explores what everyone’s needs are, and facilitates communication so that the parties might be able to get in agreement.³

How to Master Both for Work in Dispute Resolution

Professionals who pursue a degree in dispute resolution are equipped to solve problems and facilitate peaceful negotiation between parties without having to set foot in a courtroom.

Master Arbitration and Mediation at Pepperdine Caruso School of Law

The online Master of Dispute Resolution (MDR) and online Master of Laws (LLM) in Dispute Resolution programs at Pepperdine Caruso School of Law's top-ranked,⁴ ABA-accredited Straus Institute help you understand the root causes of conflict, and empower you for work solving disputes in your community.

¹Bureau of Labor Statistics, Occupational Outlook Handbook: Arbitrators, Mediators, and Conciliators
²American Bar Association, Dispute Resolution Processes: Arbitration
³American Bar Association, Dispute Resolution Processes: Mediation
⁴U.S. News & World Report, Best Dispute Resolution Programs