Arbitration vs. Mediation – Which Way to Go?

Every year law firms in Alberta deal with countless corporate litigations. These cases end up taking a lot of time and are also very expensive for the parties concerned. While businesses might have resources to afford court cases, is it wise to invest your precious time and resources on fighting legal battles. Irrespective of how serious the issue is, it is always advisable to opt for alternative dispute resolution (ADR).Alternative dispute resolution refers to resolving disputes in ways other than going to court. There are prominently three ways of ADR – Negotiation, Mediation, and Arbitration. The focus of this article is to understand the differences between mediation and arbitration and determine the way to go for businesses.


Usually, when negotiation fails, businesses opt for mediation. Parties in dispute usually consult with a mediator (an unbiased third party). This person then helps both parties to arrive at a consensus regarding their issues. The whole aim of the mediation process is to reach a point where it is a win-win for both parties. The mediator tries to ease the tension between both parties and encourages them to indulge in healthy discussions. Unlike the arbitration process, the mediator only assists the parties to sort out their issues, he does not decide for them. So, the mediator cannot force you to settle the dispute or to accept a particular situation.From a legal standpoint, mediation and negotiation help courts in dealing with the cases that demand the conventional route of legal proceedings. This is why, in most provinces courts encourage concerned parties to opt for negotiation and/or mediation before they decide to fight things out in court.


When people in dispute fail to resolve their issues on their own, then they resort to arbitration. As per the federal website in arbitration, a neutral person or panel of people hears the facts and issues and makes a decision. Arbitrators are often people who are experts in a specific area of the law or a particular industry, especially in cases where the decision-maker needs to be knowledgeable about a particular subject matter or business practice.Usually both parties choose the arbitrator together. In case, either of the sides disagree, then they can choose one person from their side and together they would select a third person to form a 3-member panel. The arbitrator hears out both the parties and then passes the judgement based on facts and evidence. The arbitration process is a less formal way of getting a judgement for your case. Unlike court proceedings, it is quicker and cost-efficient.Both arbitration or mediation can work for you depending on the severity of your case. You can consult a law firm to understand what would be better for your legal concern.