The difference between mediation and arbitration is that arbitration is an alternative to a public trial. Its a private trial where the parties are hiring an arbitrator and the arbitrations are confidential as opposed to being in a public courtroom. Normally the rules around how to litigate a dispute are set by the arbitrator. There are rules, and the arbitrator makes a final and binding decision with very limited appeal rights. The arbitrator will rule on motions, make discovery rulings, and it’s a much more formal process. The parties lose control of the process once they’ve picked the arbitrator.
In mediation the parties have control over the entire process. They pick the mediator. It’s a voluntary process. They’re agreeing what the design of the mediation is, they’ll agree to when it will be, how long it will be, who can come to the mediation. Its an informal process. Often the mediator is someone who has substantive expertise in the subject matter of the dispute and so the mediator can offer opinions, give helpful guidance as to evidentiary or legal issues but makes no rulings at all. The mediator is there to help the parties come to a voluntary agreement.
In mediation you can also be much more creative. You can be creative in terms of the timing, you can be creative in terms of how long the process goes. You might have one full day process or you might have shorter periods of time over a series of dates that are selected depending on what the dispute is and what the parties needs are. You can also be very creative with respect to the outcome with mediation where a judge has statutes and rules that he must follow or a jury must follow. In a mediation you can come up
with much more creative solutions to the dispute at hand.
