What Are the Differences Between Arbitration and Mediation and Are Either an Option in My Case?

In 2023, about 24% of all personal injury cases were settled through either arbitration or mediation, both of which are alternative, non-judicial forms of resolving legal disputes. Although in most cases, lawyers will be present, the consequences are not determined by the court, but with the aid of a mediator or by an arbitration panel. In many legal cases, like those involving personal injury, the parties can opt to, or in some cases be required to, explore these options rather than going to court. Arbitration involves having a legal expert, usually a retired judge, hear the evidence of the case and then offer a decision that is binding to both parties.  Mediation, on the other hand, involves having a legal expert, also usually a retired judge, hear the evidence of a case and then make a recommendation as to a settlement or how the parties should resolve the matter. However, in mediation, both parties must agree on the recommendations for them to be binding. If you were injured in a negligence-based accident and have questions about alternative forms of dispute resolution, contact the experienced Outer Banks personal injury attorneys at Shapiro, Washburn & Sharp right away to schedule a free consultation. 

What Is Mediation?

Mediation is a collective process that is designed to foster communication between all parties in a conflict. A neutral mediator is employed to help resolve the dispute. Usually, the mediator is a therapist, retired judge, or lawyer who has undergone training to help people communicate effectively and assist them in reaching a solution that is beneficial to both sides.  

In most cases, mediation is non-binding, so the involved parties do not have to use it to settle their disagreement. Even after entering into mediation, nothing is legally enforceable until it is presented to the court and a judgment is entered. 

Mediation is primarily voluntary, although courts occasionally request that opposing parties attempt the process before their case goes through the court.  

A mediator cannot force a specific solution to be reached. Rather, they serve as impartial third parties and facilitate carefully guided conversations between those engaged in conflict with the goal being that the discussions will result in agreements that a judge will be able to parlay into a legally binding settlement or court order. Since mediation forces the involved parties to resolve their issues by working together, it can reduce hostility and conflict, and lead to a better result.  

What Are the Advantages of Mediation?

Some benefits of the mediation process are:

  • Most parties are satisfied with the solution because they came up with it themselves. This also makes them more likely to follow through. 
  • The mediation process typically isn’t binding, which means nobody is compelled to agree to a solution unless they are happy with it.
  • Mediation fosters a sense of community because the collaborative nature of the process preserves their relationship rather than chipping away at it. 
  • Mediation is usually more economical than litigation, particularly when an agreement is reached in a timely fashion.  

What are the Disadvantages of Mediation?

The disadvantages of mediation include:

  • The process is only as effective as the involved parties want it to be. If the sides are not willing to communicate and compromise, it won’t work.  
  • If one side doesn’t fully know or understand their rights, they could consent to a resolution that is not in their best interests.  
  • Mediators do not have the power to force an outcome, so the process could conclude with no resolution being reached. 

What Is Arbitration?

Another alternative method of resolving disputes is arbitration. During arbitration, a neutral arbitrator settles the disagreement, not the involved parties. The arbitrator, who, like a mediator, is most likely a retired judge, lawyer, or other third party with the proper experience and training, listens as all sides present their arguments and then decides the outcome. Although both sides will present witnesses and evidence, as well as make arguments, arbitration is considerably less formal than a trial.

Although not available in every jurisdiction, North Carolina court-ordered arbitration programs handle any civil disputes, from small claims to district court, involving $25,000 or less. 

What Are the Advantages of Arbitration?

Some advantages of the arbitration process are:

  • It encourages the timely resolution of disputes
  • Arbitration is cheaper and less formal than a trial
  • The process of presenting your case isn’t as formal
  • The involved parties can choose their arbitrator, which is helpful if any sort of specialist knowledge is required. 

What Are the Disadvantages of Arbitration?

Some disadvantages include:

  • Parties who would rather go to court might be forced to enter arbitration to resolve their issue. 
  • Although they are supposed to be neutral, arbitrators can favor parties who provide business, like a company involved in a dispute instead of the victim they harmed.  
  • The arbitrator’s decision is binding which means that both sides might be less pleased with the outcome than one they would have reached on their own.  

Is Arbitration or Mediation Better for My Case? 

Arbitration and mediation are both effective and common approaches to dispute resolution under the right circumstances. There is no one-size-fits-all answer so determining which process is best for you will depend on the facts of your individual case. If you are involved in a legal dispute, consult with an experienced Outer Banks personal injury attorney at Shapiro, Washburn & Sharp to determine if one of these forms of alternative dispute resolution is right for your situation. Recently, we achieved a $3.5 million settlement through mediation between the family of a man who was killed in a truck accident and the truck driver who struck his vehicle. To schedule a free consultation, call (833) 997-1774 or fill out the contact form on our website. We serve clients throughout Kitty Hawk, Nags Head, and Kill Devil Hills.