Mediation and arbitration can help the disputed parties to settle their serious disputes without bearing the expenses of the court.
Mediation Defined as a neutral process in which a mediator or a trained mediator works as a third party between two parties. It helps both parties to come to one point with mutual agreement. On the other hand, arbitration refers to the neutral person or a trained arbitrator who acts as a third party and performs the duty of a judge and is responsible for dispute resolution.
Mediation is a non-binding process that offers both parties a mutual settlement. Arbitration, typically a binding process, can handle a dispute with a conclusion. There is another approach named med-arb that brings the benefits of both methods together. In this combined approach, parties first have a mutual agreement with the help of a mediator. If the dispute is still there, the parties can move to arbitration.
A mediator can play the role of an arbitrator and gives a final decision quickly. Similarly, an arbitrator can take help from a mediator before making any final case decision.
An arbitrator focuses on the legal acts, dos, and don’ts of a dispute to make the final decision. It depends on the parties whether they agree with the decision given by an arbitrator or not. The whole process is just like a court case presented in the court. The only difference is that the case is not handled in the courtroom. The dispute case is not open to the general public, and the arbitrator or mediator keeps it confidential. Like a court case, there is always a winning party and a losing party in an arbitration. The disputed parties refer to the arbitration by one or more persons. They are bound to agree on the arbitration decision.
A mediator focuses on the discussion and tries to solve the matter by minimising differences between two parties. It provides a solution to the parties and brings them to a mutual agreement. He never gives the final decision of the case. he ends the case on an agreed solution and gets signatures of both parties on the agreement. In the mediation approach, there is nothing to win or lose in the mediation approach as parties end and settle the dispute with mutual consensus. Mediation is a voluntary act of someone willing to resolve a matter or dispute between two parties. In mediation, parties are not bound to agree on the decision, but they must have a mutual agreement without any pressure or influence. Mediation is not a formal process of dispute resolution. A mediator provides a solution that the parties might not be able to focus on before mediation. In mediation, parties are physically separate and will sit in different rooms. The mediator will talk to one party at one time and then discuss and hear the other party. A mediator will never take the side of one party because of any influence or relationship. They will not give any advice and make the decisions.
Both processes and techniques have some advantages and disadvantages. There is a huge drawback of mediation that the disputed parties may not come to a single point. When they do not agree on o one point, and the mediator cannot minimise their differences, the case may end up in court. In this way, both parties will have to bear the court fees and other expenses. On the other hand, both Mediation and Arbitration save time and cost for both parties as these techniques are cost-effective. For small businesses, it is highly recommended to solve their disputes through any of the techniques, either arbitration or mediation, rather than going to court.
Another disadvantage is that both processes have no legal binding to the decision. The parties may also feel difficulty in choosing the best, most reliable, honest, trustworthy, and experienced mediator and arbitrator to resolve their disputes. Mediation has become so popular because of less binding and mutual agreements of disputed parties.
If your dispute is classified as a commercial dispute, then it is necessary and beneficial to have a mediator who is a retired judge or a senior lawyer.