Mediation and Arbitration – what’s the difference

What’s the difference between mediation and arbitration? I recently had a telephone call from someone looking for advice* in regard to mediation. Rather unusually, he started by telling me was not calling to instruct me, but rather to get my thoughts on mediation.  After he comprehensively explained his dispute, he told me that he had offered the other party the opportunity of going through arbitration, at his expense.  He then asked me if it was acceptable for him to refuse to mediate because the other side had refused arbitration.

I could not answer that question, it was for his solicitor, armed with all of the facts, to layout for him how the court may view the refusals on either side to engage in various forms of ADR.  As the claim was for a particularly small sum of money, I was curious to understand his reasoning for wanting to arbitrate rather than mediate.  It all fell down to him wanting a decision, and also that he felt that mediation was a ‘little bit fluffy’.  He told me that he could not understand how a mediator could assist parties in reaching an agreement if they were poles apart.    In so far as wanting a process that culminated in a neutral person making a decision, he was correct, mediation does not do that, though I felt he had not quite grasped the ability of a skilled and experienced mediator to assist parties to reach a settlement.  

Mediation and arbitration are both forms of ADR, and although they are at different ends of the spectrum, they share many similarities.  As it presently stands parties cannot be forced to enter into a form of ADR (for a discussion on how this may be changing see my recent post here), mediation and arbitration take place by agreement. The parties have a significant degree of control over the process and the range of outcomes, they can decide what evidence is used in the process. The discussions and subsequent outcome remain confidential whilst any offers made as part of the ADR process are protected from being used in subsequent court proceedings under the ‘Without Prejudice’ principle.

This piece focuses, not on the similarities between the two methods, but on their differences.  


Mediation is a non-adjudicative form of ADR it allows the parties to retain significant control of the process and the outcome. The mediator remains neutral as a facilitator to discussions and although he or she will challenge both parties in private sessions they take no personal interest in the outcome. Private sessions remain confidential until such time as each party agrees for information to be passed to the other in view of offers for settlement and any final agreement forms the basis of a legally binding contractual relationship; each party signs the agreement though the mediator is never a signatory to this contract, highlighting the impartial and neutral position he or she holds.   Often on completion of the mediation, the parties will get their legal representatives to draw up the final agreement.

Whilst the discussions that took place in the mediation and any offers that may have been made remain confidential the court may be invited to enforce, as a matter of simple contract, any agreement reached between the parties if there is a subsequent dispute. In many ways, mediation can be seen as a third-party assisted negotiation.   Before I begin any mediation or even take instructions on mediation I often ask the parties whether they have tried to negotiate themselves; I do this as it will often narrow the issues to be brought to the mediation and there is always the possibility that the parties may settle during negotiation which would save them money – always a good thing for those concerned.

Benefits of mediation

There are numerous benefits to mediation aside from the cost and time-saving element, in no particular order they are:

·      A neutral mediator often assists parties to appraise the strengths and weaknesses of their case;

·      the mediator is trained to break the deadlock and is especially skilled at bringing parties out of entrenched positions;

·      by being neutral the mediator can often assist in passing offers and concessions between the parties, which may not be as easily accepted were it to come directly from the other person;

·      the mediator will often prompt each party to air their grievances in the joint plenary session so that they may leave the emotion behind and focus on the real issues in their case; and

·      the mediation process is ideally suited to allowing parties to think about their position as, bar the joint plenary sessions, the mediator will engage in private discussions with each party in turn; allowing the other time to assess their position and/or speak to their lawyer if necessary.


Unlike mediation, arbitration is an adjudicative form of ADR it still allows the parties to retain control of the process and the outcome, however, the arbitrator, unlike a mediator, takes a more active role in the dispute as he or she will make a decision at the end of the proceedings. Depending on the dispute there may be a single arbitrator, or a panel of arbitrators appointed, all of whom will hear the evidence before making a decision and if appropriate making an arbitral award. The choice of arbitrator and the form of the arbitration to be followed will be decided by the parties in advance and will be provided for in a written agreement, contractual in nature.

In many cases arbitrations resemble trials, witnesses may be called and evidence heard from experts, though parties can agree that an arbitrator makes a decision on the papers alone i.e. no live evidence is heard.  Whilst many contracts contain mediation clauses, it is much more common for arbitration to be provided for in contracts concerning international trade.

Benefits of arbitration

·      Arbitrators come from a wide range of background and experience, the arbitration agreement can ensure a person of suitable skill and experience is chosen to arbitrate;

·      It is common for arbitration clauses to form part of trade agreements and contracts, this provides certainty to all parties that in the event of a dispute arising there is an ADR method, and arbitral tribunal ready to determine the issues;

·      The parties choose in advance or by an agreed method, who will arbitrate and how the process is to be conducted – ie like a trial, or on the papers;

·      It is flexible and scalable in terms of cost – arbitrations which take place on paper will be cheaper than arbitrations which require witnesses;

·      There are internationally recognised forms and standards of arbitration; and

·      A binding decision is reached at the end, which is important to certain disputes.

In Conclusion

Whilst mediation and arbitration, as methods of ADR, have wide utility, it would be right to say that arbitration usually lends itself, for a plethora of reasons, to commercial disputes.  In most cases arbitration will take longer and cost more than a mediation would, arbitration can also be just as expensive, and formal, as court proceedings, though this is entirely dependent on the form of the arbitration.  

Mediation is highly scalable, it may be used as easily by individual members of the public as it can by small, medium and even multi-national enterprises; the key is to get advice from your lawyer as to which option would be best for you.

John-Paul is a barrister and accredited civil commercial mediator registered with the Civil Mediation Council. He is the principal mediator at DF Mediation.

I should stress that although I am a practising barrister, I do not give legal advice when mediating, my role is to be a neutral third party, I explain this to every person who calls so that they are under no illusion that legal advice comes from their solicitor and legal teams, not me

2 thoughts on “Mediation and Arbitration – what’s the difference”

Comments are closed.