Mediation and arbitration are referred to in the law business as ADR processes, Alternative Dispute Resolution processes.  They are excellent alternatives to the what is now well acknowledged as a broken judicial system, at least as to medium and small commercial and business dispute resolution.  The very fact that business litigants are resorting to paying for ADR  is an indication that the system is non-responsive to the needs of business for fast and efficient dispute resolution.
What is the difference between mediation and arbitration? Arbitration is a private trial, tried to a private judge, technically known as an arbitrator, who is hired by the parties to hear the arguments and evidence of the parties and make a final and binding decision on the issues presented.  See the PRIVATE TRIALS sub tab herein for a more complete discussion of  arbitration.  Mediation is like shuttle diplomacy by a respected independent third party who moves back and forth between the parties to bring them closer together.  Mediation is not binding on either party and does not result in a decision by the mediator as to who was right and who was wrong. The mediator will typically hear in a joint session the arguments of both sides as made by the parties or their attorneys if they are represented by counsel. Then the mediator separates the parties into different rooms and shuttles between rooms trying to cajole, argue, and badger each side into coming closer to a settlement with the other side. If the parties settle, then mediation has been successful. If the parties refuse to settle the mediation is over. No party is required to do anything except express their opinion and discuss the matter with the mediator in private. Mediation by highly qualified mediators is successful in settling cases in excess of 80% of the time and saves parties thousands, sometimes tens of thousands, and sometimes hundreds of thousands of dollars in attorneys fees, along with delays, stress, and pain. Typically both parties walk away from the mediation unhappy with the result, but resigned to the fact that it was the best they could do.
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