Mediation, arbitration, and litigation are three different ways to resolve a dispute, and each one is a little more formal than the last. Mediation is non-binding and depends on both sides agreeing. Arbitration, in its most formal version, ends in a ruling that is final and binding. Litigation takes the dispute into the court system in front of a judge.
What Is Mediation?
Mediation is when two people bring in a third person to help them resolve their argument. That third person is usually neutral, and it is usually a lawyer or a judge, though sometimes it can be a friend of both parties or an advisor to the business.
Mediation is non-binding. If the two sides cannot agree, or the neutral third party cannot help them resolve the dispute, they will typically go their separate ways and proceed with their claims against each other.
What Is Arbitration?
Arbitration is a little more formal than mediation. It still involves a neutral third person, but that person is either a judge or a lawyer who hears your dispute and helps you resolve the case.
Arbitration may or may not be final and binding, it depends on how the parties agreed to proceed with arbitration.
What Is Litigation?
Litigation is the next level up from arbitration. It is a formal lawsuit, and it goes through the court system to resolve your dispute.
At this stage, the neutral third person is no longer some random person. It is an elected or appointed judge, sitting in a court and following that court’s rules. If you want to see how arbitration stacks up against small claims court and the county court system, we have compared them here.
How the Three Compare
Mediation – voluntary, confidential, fast, and cheapest; ideal when both sides want a deal or need to preserve a business relationship. Nothing happens unless both sides agree.
Arbitration – private and usually faster than court, with limited discovery and very limited appeal rights; the trade-off is that a bad award is often impossible to undo.
Litigation – full discovery, subpoena power, injunctions, juries, and appeals; also the slowest and most public. Note that in some Pennsylvania counties, smaller cases are automatically routed to court-annexed arbitration first – we explain that in Small Claims Court vs. Arbitration vs. Court of Common Pleas.
What Should You Look for in a Mediator?
A mediator should be neutral. That means the mediator should not be your best friend or the other side’s worst enemy, and it probably should not be someone who is already knee deep in your dispute either.
Can You Be Forced Into Mediation or Arbitration?
You cannot force someone into mediation or arbitration. People typically agree to mediation, arbitration, or litigation ahead of time, in their contracts. If a contract does not address it, the only way to get someone into mediation or arbitration is if they agree to it.
Mediation, Arbitration, and Litigation FAQ
What is the difference between mediation and arbitration?
Mediation is non-binding: a neutral third person, usually a lawyer or a judge, helps two people resolve their argument, and if they cannot agree, they go their separate ways. Arbitration is a little more formal. A neutral third person, either a judge or a lawyer, hears the dispute, and in its most formal form, issues a ruling that is final and binding.
Is mediation binding?
No, mediation is non-binding. If the two sides cannot reach an agreement, or the neutral third party cannot help them resolve the dispute, they typically go their separate ways and proceed with their claims against each other.
Is arbitration binding?
Arbitration can be informal or very formal. In its most formal form, a neutral third person, a judge or a lawyer, hears the dispute and rules on it, and that ruling is final and binding.
Is arbitration the same as going to court?
No. Arbitration is a little more formal than mediation, but litigation, meaning an actual lawsuit in court, is the next level up from arbitration. Litigation goes through the court system, and the neutral third person is no longer some random person, but an elected or appointed judge sitting in a court and following that court’s rules.
Arbitrator vs. mediator: who acts as the neutral third party?
In mediation, the neutral third person (the mediator) is usually a lawyer or a judge, though it can sometimes be a friend of both parties or a business advisor. In arbitration, the neutral third person (the arbitrator) is a judge or a lawyer. In litigation, it is an elected or appointed judge sitting in a court and following that court’s rules.
Can I be forced into mediation or arbitration?
No. You cannot force someone into mediation or arbitration. People typically agree to one of these processes ahead of time in their contracts. If a contract does not address it, the only way to use mediation or arbitration is if the other side agrees to it.
Is a consultation with Kaminsky Law free?
Yes, consultations are always free. If you have questions or need help with a mediation, arbitration, or litigation matter, you can reach out to Kaminsky Law directly to talk it through.
Talk to Kaminsky Law
Choosing the right path for a dispute often starts with understanding your contract and what it says about mediation, arbitration, or litigation. If you have questions or need help with a mediation, arbitration, or litigation matter, don’t hesitate to reach out and contact Kaminsky Law. Consultations are always free.
Related Reading
- Small Claims vs. Arbitration vs. Court of Common Pleas
- Legal vs. equitable remedies
- Our ADR practice
This article is general information based on a recorded discussion. It is not legal advice and does not create an attorney client relationship. Every case is different. Prior results do not guarantee a similar outcome. For advice about your situation, contact Kaminsky Law directly.
