Mediation vs. Arbitration: What is the Difference?

If a construction dispute arises and is not resolved, it often results in a lawsuit being filed.  Because lawsuits are expensive and can take years to resolve, this gave rise to “alternative dispute resolution” or ADR.  ADR is shorthand for any method to resolve a dispute more quickly and efficiently than litigation. 

Mediation is a very common form of ADR.  Mediation is not a substitute for litigation, but is often used in litigation to try to resolve a case before it goes to trial.  The mediator does not act as a judge.  The mediator’s job is to act as a neutral facilitator who meets with the parties and attempts to assist them in negotiating a settlement of the matter.  The success rate for mediation is quite high.  Some surveys suggest the success rate is around 85%.  Regardless, most litigation attorneys will tell you the vast majority of cases that go to mediation eventually do settle. You can also mediate a dispute even before a lawsuit is filed, and many have had success doing so.

Arbitration is the other most common form of ADR.  Often confused with mediation, arbitration is a process whereby an experienced person – usually an attorney – is appointed by the parties to decide their dispute.  Because the arbitrator is the decision maker, he or she is bound by many of the same ethical standards that apply to judges.  The arbitrator must disclose any circumstances that might call his or her objectivity into question.  The arbitrator may not show partiality to either side.  The arbitrator hears the parties’ evidence in a private setting – often in a conference room at a law firm’s office – and issues a ruling called an “award.”  The arbitrator’s award is enforceable in court.  The advantages to this process are that it is private and it can be customized to meet the parties’ needs.  The parties are not required, for example, to engage in costly discovery in the way that is required in a lawsuit.  This can result in savings of time and money.  You can usually get a result in arbitration in a matter of months instead of years, as is often the case with litigation.

Are you interested in mediation or arbitration to resolve your construction dispute?  I have served as a Florida Supreme Court Certified Circuit Civil Mediator since 2015 and have mediated numerous construction disputes.  I am also an arbitrator admitted to the construction panel of the American Arbitration Association.  Please contact me at reese.henderson@gray-robinson.com if you would like to learn more about mediation or arbitration.

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