Mediation is a process in which a third party, often a former judge or experienced litigation attorney, is hired to help negotiate a settlement. The parties provide summary statements and relevant documents to the mediator prior to the mediation, and during the mediation the mediator shuttles back and forth between the parties offering advice and a fresh perspective. Mediation is not binding, it is just an attempt to reach a settlement. If no settlement is reached, the parties can continue with litigation or arbitration. What is said at the mediation is inadmissible and a mediator cannot be compelled to testify, so the parties are free to be candid. Mediation is often an excellent way to resolve a dispute without having to go to trial.
Arbitration is similar to having a dispute resolved in a court of law, except that the judge is a private person hired by the parties. Like a mediator, an arbitrator is often a former judge or experienced attorney. Unlike mediation, the decisions of an arbitrator are binding on the parties. Because all of the rules of civil procedure don’t necessarily apply in an arbitration, it can be a quicker and less expensive way to get a judgment. The parties can agree at any time to resolve a dispute via arbitration, or arbitration can be required as a term in a contract.