Mediation and arbitration are both alternatives to traditional court litigation, but they work very differently. Knowing the difference helps you understand what your contract requires, what your court has ordered, or what would make sense to suggest in your dispute.
A neutral mediator helps both sides find a settlement. They have no power to decide anything; they facilitate communication, suggest creative options, and reality-test positions. Most mediated cases settle in a single day.
An arbitrator (or panel) hears evidence and issues a binding decision, like a judge. The procedures are more flexible than court (less discovery, fewer rules of evidence), but the decision is enforceable and rarely appealable.
You can walk away from mediation any time without binding effect. Arbitration is typically required by a contract clause and produces a result whether you like it or not. Many courts also order mediation as a step before trial.
Mediation runs $300–$1,500/hour split between parties; usually one full day. Arbitration is more expensive ($30,000–$150,000+ for full hearings) but still typically faster than full litigation. Court is usually slowest and cheapest in fees.
Many consumer, employment, and business contracts include mandatory arbitration clauses with class-action waivers. These are generally enforceable and dramatically change your dispute options. Always read before signing.
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