Originally Posted by
nordo
Arbitration
noun
1.
the hearing and determining of a dispute or the settling of differences between parties by a person or persons chosen or agreed to by them:
Rather than risk a long strike, the union and management agreed to arbitration.
Mediation
noun
1.
action in mediating between parties, as to effect an agreement or reconciliation.
Not significantly different semantically but in our business it's different. It's not called the National Arbitration Board.
There you go. We arbitrate grievances and mediate contracts. Clear as mud?
A little late to the conversation, sorry.
The practical difference in mediation and arbitration is that arbitration is binding and mediation is not.
A judicial body can either encourage or order parties to either. Parties can also agree to either without court involvement or via prior contract. The outcome of mediation can be anything from the two parties compromising and moving forward in harmony to a continued stalemate.
Arbitration on the other hand has an end in sight. If the two parties decide to stay at loggerheads then the arbiter makes the final and binding decision. The arbiter has the ultimate authority in the dispute AND in the resolution. The downside of arbitration is that neither side walks away happy.
Mediation serves no purpose if one party is acting with ill-intent. The party who benefits from delaying the process or not finding a solution prefers mediation without resolution for the simple fact they know they can drag the process on.
For mediation to work both sides need to be seeking what is equitable not only for themselves but for the other side. If one side is convinced the other side is not negotiating in good faith, then the process is a waste of time. Mediation is effective only when both sides are negotiating in good faith AND a mutual agreement is beneficial to both parties.