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Understanding ADR

Mediation vs Arbitration: Which Process Fits Your Dispute?

Mediation and arbitration are often mentioned together, but they work very differently. Here is how to tell which one suits your situation.

Liberty ADR Centre · · 2 min read

Mediation and arbitration both take place outside a courtroom, and both involve a neutral third party. That is where the similarity largely ends.

The key difference: who decides

MediationArbitration
Who decides the outcome?The parties, togetherThe arbitrator
Role of the neutralFacilitates discussion; does not decideHears both sides and makes a decision
Is participation voluntary?Yes, and either party can leaveOnly by agreement, but once agreed, the process is binding on the parties
OutcomeA settlement agreement, if one is reachedAn award, usually binding
FormalityFlexible and conversationalMore structured, with evidence and submissions

When mediation may fit

Mediation often suits disputes where:

  • the parties have an ongoing relationship, such as family members, neighbours, business partners or members of the same organisation;
  • the issues include feelings, trust or communication, not only money or facts;
  • creative or practical solutions are possible, such as payment plans, shared use of property or changes in how a group is run;
  • both sides are willing, at least in principle, to talk.

Because the mediator does not decide anything, mediation depends on good faith. If one side is unwilling or unable to take part safely, it may not be appropriate.

When arbitration may fit

Arbitration may suit disputes where:

  • a contract already requires it;
  • the parties need a decision but want a private process and some say in choosing who decides;
  • the dispute turns on technical or factual questions that an arbitrator with relevant expertise could decide.

Arbitration awards can only be challenged on limited grounds, so parties should understand what they are agreeing to before they begin. Legal advice is strongly recommended.

Can you use both?

Yes. Many disputes begin with negotiation or mediation and move to arbitration only if agreement is not possible. Some contracts set out this sequence. Even when mediation does not settle everything, it can narrow the issues so that any later process is shorter.

A practical way to decide

Ask yourself three questions:

  1. Do I want to keep control of the outcome? If yes, start with mediation.
  2. Is there an agreement to arbitrate, or would both sides accept one? If no, arbitration is not available.
  3. Is it safe and realistic to sit down with the other party? If not, discuss alternatives with the Centre or a lawyer.

This article is general information, not legal advice. For advice about your own situation, please consult a qualified lawyer.

Next step

Talk to us about your dispute

Tell us what is happening in your own words. We will explain the options available and whether ADR is likely to help. Sending an enquiry does not commit you to anything.

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