Client signing a mediation settlement agreement

Mediation Settlement Agreement vs Arbitration Decision: What's the Difference?

If you’re in the process of a dispute, whether it’s a pending divorce or a civil matter, you may have heard terms like “mediation settlement agreement” and “arbitration decision.” Before you let your confusion and apprehension get the better of you, start here and get a handle on the processes.

How Are They Similar?

Mediation and arbitration are both types of “Alternative Dispute Resolution” and are used in cases where the parties can’t come to an agreement on their own. Both can be voluntary or court-ordered. Neither arbitrators nor mediators need any specific formal training as far as degrees go, but must have some training. You generally can choose who you want to use as either a mediator or an arbitrator. Another similarity between mediation settlement agreements and arbitration decisions is that once a settlement or decision has been reached, it must be enforced and honored.

How Are They Different?

Despite the similarities between a mediation settlement agreements and arbitration decisions, there are some very distinct differences. The mediation process is over when a settlement is reached between the two parties whereas arbitration is over when a decision is reached. One major difference between the two is that mediation is used to help people come to settlement agreements and mediators are impartial. Arbitrators, on the other hand, listen to both sides and side with one party over the other.

Mediation is used prior to a court hearing. The mediator helps both parties come to an agreement, which is then signed and presented to the court. But, they do not make a decision regarding the outcome of the case. The arbitrator takes the place of a court appearance. Whatever the arbitrator decides is considered the same as a court judgment.

What Do They Cost?

The cost of mediation and arbitration are both based on various factors, but in both cases the time that’s devoted to the case is the factor that determines the cost. For instance, if a mediator can get a couple to come to a settlement agreement in one day, it’s going to cost substantially less than if it takes many mediation sessions.

Because it generally takes less time to mediate a dispute than to go through arbitration, the mediation process is usually less costly than the arbitration process. The main reason for the time and cost difference is because mediators only facilitate a settlement agreement and encourage negotiation, whereas arbitrators have to not only listen to both sides but must also take the time to render a decision.

What Legal Weight Does Each Have?

Both arbitration and mediation carry weight in the legal system. As far as mediation goes, it depends on how the court system regards mediation. Although mediators usually help parties come to settlement agreements before they get to the court room, they may have to give recommendations to the court if the parties can’t agree. The judges may not always go along with what the mediators recommend, but they usually do. Arbitrators have more legal weight because they act in the same capacity as a judge in that they make the decision, and their decision is final.

Last Updated: January 13, 2015