Arbitration versus Mediation: Differences, Pros and Cons, Applications

Posted by Kompass Professional Development on Dec 21, 2020 1:18:57 PM
Kompass Professional Development

If you are interested in the field of alternative dispute resolution (ADR), you may be considering becoming an accredited arbitrator or mediator.

Both are increasingly popular forms of dispute resolution; both offer interesting and diverse career opportunities.

People pursue ADR training and accreditation for a number of reasons. Some aspire to become professional mediators or arbitrators. Others are simply looking to handle conflict better in their personal relationships or workplace.

It’s certainly an industry in demand. From business disputes to divorce settlements, people are turning to ADR as a more flexible, less costly, and more time-effective means of resolving conflicts.

Arbitration and mediation offer two different approaches to conflict resolution. They differ in terms of procedure and outcomes, as well as training and accreditation.

In this post, we guide you through clear definitions of mediation and arbitration, including pros and cons, applications, and professional training requirements. Let's get started.


What is mediation?

According to the ADR Institute of Canada (ADRIC), “Mediation is a process in which the parties agree to an impartial facilitator (a neutral third party) to assist them to reach a voluntary settlement of the issues in dispute. The mediator does not make a decision, and the parties may terminate the process at any time.

The important thing to note is that the mediator does not decide the outcome of the dispute. Instead, they facilitate discussion and negotiation, so the parties can find a mutually beneficial resolution on their own.

The mediator senses how far each party is willing to negotiate and compromise. When that point is reached, they play a vital role in helping each side consider factors necessary to settle the case.

Mediation is an informal procedure and the outcome is not legally binding. The parties sign a settlement agreement, but their adherence to it is voluntary.


What kinds of disputes are settled through mediation?

Mediation can be used to settle a wide variety of disputes. These include (but are not limited to):

☑️ Workplace conflicts

☑️ Customer and patient complaints against practices and professionals

☑️  Landlord-tenant disputes

☑️  Neighbourhood conflicts

☑️  Family disputes


Common Pros and Cons of Mediation

As with any method of ADR, mediation has both limitations and advantages. Here are some of the most common pros and cons of mediation.

Pro: The parties retain control of the process, and are able to make suggestions and reach a mutually beneficial decision.

Con: Mediation requires that both parties agree to follow through on the proposed solution. The lack of binding resolution means there is no guarantee that both parties will abide by any decisions made.

Pro: Mediation makes it easier to preserve the relationship between parties. Both parties may be satisfied and benefit from the final decision.

Con: The perceptions, biases, and attitudes of the mediator can inadvertently impact the decision of the disputing parties.

Pro: The mediation process is extremely flexible. Participants can choose the mediator, time, place, and structure of the proceedings.


What is arbitration?

According to ADRIC, “Arbitration involves adjudication by a third-party neutral (the arbitrator). Unless otherwise agreed, the terms of the applicable Arbitration Act will govern and the decision of the arbitrator, unless otherwise agreed, will be binding.”

Arbitrations can involve hearings, evidence reviews and decisions in a way that is similar to a trial, but is outside of court and more informal.

The key point here is that arbitrations are typically legally binding, subject to arbitration law, and often follow a more formal structure than mediations.


What kinds of disputes can be settled through Arbitration?

Theoretically, arbitration can be used to resolve almost any kind of dispute, provided the parties agree to the process. David Merrigan, an experienced and accredited arbitrator, explains:

Arbitration is widely used in labour relations, business and consumer disputes, sports, construction, international trade deals, torts, and many other types of disputes. Arbitrators often specialize in an area in which they have academic credentials or work experience.

In terms of career options, arbitrators may work independently as contractors, or for a company that specializes in ADR and arbitration.


Arbitration Pros and Cons

Arbitration is an excellent option for disputes that cannot be resolved through negotiation and mediation. It offers an excellent alternative to long, costly litigation battles, and can be adapted to suit the needs of participants.

However, like all forms of alternative dispute resolution, arbitration has both drawbacks and benefits. Here are some of the most common pros and cons.

Pro: Arbitration offers the finality and legally binding outcome of a trial, but is typically more affordable, faster and less complicated than a court proceeding.

Con: The scope of discovery can be limited as key information such as depositions, requests for documents, interrogatories, medical examinations, and inspections of property are sometimes curtailed.

Pro: Arbitration is flexible. The parties have a say in the structure, process, and setting of the arbitration.

Con: Arbitration clauses may offer an unfair advantage to bigger, wealthier parties (employers or large corporations, for instance) when challenged by an employee or consumer with fewer resources.

Pro: Unlike court proceedings, which are open to public scrutiny, parties can agree to keep the arbitration private and confidential.


deciding between arbitration and mediation

Many ADR professionals use both mediation and arbitration in their practice. They earn certifications in both disciplines, so they can offer clients different options for settling disputes.

Kat Bellamano, a certified mediator and arbitrator with more than 17 years of ADR experience, explains:

"Mediation generally emphasizes supporting parties to decide their own outcome, based on what is best in their specific circumstances. On the other hand, arbitration generally ensures that there will be a binding outcome that is determined based on the rules of natural justice. I don’t think a practitioner has to decide between the two. Many, including myself, do both."


Learn more about Alternative Dispute Resolution Training & Certification

Kompass Professional Development offers Canada’s only ADRIC-accredited online Arbitration training. This 10-week course is taught by certified arbitrators, delivered totally online, and includes 14 hours of mandatory role play and mock hearings.

Kompass also offers a 12-week online Mediation and Dispute Resolution course, which is taught by certified mediators and accredited by both ADRIC and ADRIO (ADR Institute of Ontario).

Both the Arbitration and Mediation course meet educational requirements for certification through ADRIC. Successful graduates are eligible to pursue the Qualified Arbitrator or Qualified Mediator designations.

Click below to explore training, costs, admission requirements, or chat live with an Advisor.

Explore Accredited Mediation and Arbitration Courses


Topics: arbitration, Kompass Professional Development, mediation, alternative dispute resolution

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