Updated on October 20, 2021
The terms mediation, arbitration and litigation are often casually tossed around as different methods of resolving legal disputes. However, the nuances between these methods of dispute resolutions may not be clear. The following is a brief overview of each method.
Litigation is the most common form of dispute resolution. In a litigation, the parties bring their claims in a state or federal court to resolve their case through a court trial. The parties may choose to have a jury trial, where their case is decided by a group of their peers. The alternative is a bench trial, where their case is decided by a judge. Strict state or federal rules of civil procedure must be adhered in a litigation. Judgments rendered in a court trial may be appealed to courts of higher jurisdiction. For example, a federal case is first decided by a District Court judge. Appeals will be heard by the Circuit Court judges, or the Supreme Court in some specific cases.
Mediation is an alternate dispute resolution method where the parties try to settle their dispute out of court. The parties bring their dispute to a third-party neutral mediator, who is normally a retired judge or an experienced attorney. The mediator listens to both sides of the argument, reviews relevant case law, and analyzes the strengths and weaknesses of each side’s case. The mediator will then address each side individually to point out the strengths and weaknesses of each sides’ case to broker a settlement between the parties. A mediation is non-binding, and the parties are completely free to settle or not settle their case. Everything spoken in a mediation is normally confidential and cannot be used in a court of law as evidence.
Arbitration is another method of alternative dispute resolution. This process is more similar to litigation than mediation. Similar to litigation, the parties’ dispute is resolved through an arbitration hearing, which is like a court trial. In the arbitration hearing, the parties will present their witnesses and evidence to a neutral arbitrator, who acts in the same capacity as a judge in a court trial. The arbitrator, or arbitrators in some cases, will issue a decision as to the prevailing party in the action. However, unlike litigation, an arbitration may be binding or non-binding, depending on the agreement of the parties. In a binding arbitration, the parties waive their right to a court trial and agree to accept the arbitrator’s decision as the final decision for the matter. Generally, there is no right to an appeal. On the other hand, in a non-binding arbitration, the parties have a right to appeal the arbitration decision and/or request a court trial to relitigate their claims.
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By Carina Woo, esq.