Arbitration is a process somewhat like a trial. A neutral party, the arbitrator,
sits and listens to the facts and evidence presented by both sides or all sides
to a dispute, considers the law, and makes a decision as to what the outcome
of the dispute is going to be. The power to decide the outcome is entirely in
the hands of one person: the arbitrator. The arbitrator can take the place of
judge and jury in making a decision about a conflict. The parties to the conflict
can only present the facts and evidence. They do not have any choice about
what the arbitrator decides. They leave the decision up to the arbitrator. Courts
can use arbitrations as a way to lighten the load on the courts. Parties to a dispute
can agree to arbitration, or a judge can assign a matter to arbitration. Arbitrations
take place outside the courts.
Mediations also take place outside the courts, but they are not "ordered"
by judges. Mediation is chosen by the parties to a dispute as a way to try
to resolve it informally, through guided discussion. The mediator does not
decide what is going to happen. How the dispute turns out is up to the
parties, with the help of the mediator urging them, and guiding them toward
settlement. Mediation involves choices. Arbitration does not. Mediation can
be creative, and can go in any direction. Arbitration goes in the direction of
presenting evidence before an arbitrator, and the parties do not control what
happens with the arbitrator's decision. Arbitration is usually binding if it is the
result of a requirement to use arbitration, such as a contract. Mediation, on
the other hand may or may not resolve a dispute. No result is forced on the
parties, and no one decides how the conflict will turn out except the parties
to the dispute.