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Del Sole Cavanaugh Stroyd LLC - Pittsburgh Business Attorneys

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What’s the difference between mediation and arbitration?

| Jan 21, 2021 | Alternative Dispute Resolution |

When you own and operate a business, at some point you are likely to face a business dispute. Maybe a vendor didn’t provide the quality IT services you hired them to do or a supplier failed to provide the items your business needed to produce your products. Now, you are having problems resolving the dispute and considering seeking mediation or arbitration.

However, you aren’t certain you understand the difference between the two. How are mediation and arbitration different?

Mediation in business disputes

With mediation, the two parties involved in a business dispute work with a mediator to resolve the dispute. During this process, the mediator:

  • Identifies what the main issues involved in the dispute are
  • Clears up any misunderstandings between the parties
  • Builds upon what the parties agree on
  • Offers solutions to resolve the dispute

Usually, both parties have their attorneys present during the mediation process. Ultimately, the parties work together to find a solution to the dispute that they agree on.

Arbitration for business disputes

With arbitration, a neutral arbitrator hears both parties’ attorneys explain the dispute and looks at evidence regarding the contracts and agreements the parties initially entered. This process is similar to what would happen at a trial. Arbitration differs from mediation because the arbitrator decides how to resolve the dispute. If the parties entered a binding arbitration process, they must follow the arbitrator’s decision. If the arbitration was nonbinding, if the parties agree with the arbitrator’s decision, they will follow it.

Both mediation and arbitration are alternative dispute resolution methods. Businesses use these methods to avoid expensive, lengthy court trials. Often with mediation or arbitration, business owners in a dispute can resolve their disagreement more quickly and get back to focusing on helping their business succeed and grow.