The Difference Between Arbitration and Mediation

And figuring out which one you need

Photo by Possessed Photography on Unsplash

Occasionally someone asks me what I do for a living and when I tell them I’m an arbitrator, they say, “Oh, a mediator.” In my mind, I think that’s not the word I said. Sometimes I say, “Kind of,” and sometimes I launch into an overly long description of the difference. Eyes glaze over.

But you are here specifically to learn more about arbitration, so I assume this is a safer audience to discuss this difference.

The basic difference between arbitration and mediation is who decides what the resolution will be. Both are third-party neutrals, not working for either side directly, and are either mutually selected or appointed through an agreed-upon process. In arbitration, the parties present their evidence to the arbitrator who issues a final decision that both parties are bound to follow. In mediation, the parties present their cases (usually without extensive evidence) to the mediator, who assists the parties in settling the dispute. In mediation, it is the parties who decide what the resolution will be.

In US labor relations, mediation and arbitration are treated as distinct processes, and often the CBA will specify that they are different steps in a grievance procedure, if there’s any mediation at all. Some American labor arbitrators will ask the parties if they would like to mediate a dispute but the majority of them consider mediation to be a separate process.

Their reason for this belief is that parties in mediation should have confidence that their candor about their case will not be used against them by a decision-maker. For example, if a party tells a mediator confidentially that they see the weakness in their case, they do not want that mediator to become the arbitrator who will take that admission and rule against them. The idea is, the arbitrator-acting-as-mediator cannot “un-hear” the problems a party has admitted to, and will let that influence them if the case doesn’t settle. If you ask a neutral who has been hired to arbitrate if they are willing to mediate, many will either refuse or insist that they can only mediate the case. They will often assert that a different person should be hired to arbitrate the case if no settlement is reached.

By contrast, Canadian arbitrators mediate settlement in the vast majority of their cases. It’s very uncommon for arbitrators in Canada to issue final and binding decisions because the process assumes that the arbitrator will guide the parties to settlement. There are no concerns about breaches of confidentiality or prejudice by the arbitrator.

I’m not familiar enough with Canadian labour relations (you’re welcome, Canadians, for the ‘proper’ spelling) to judge whether their system is superior or not. Possibly they have some implicit biases that influence their settlement skills. At the same time, maybe American arbitrators should be more willing to settle cases. As with all things in labor arbitration, it’s really up to the parties and what their CBA says.

I prefer arbitration to mediation because I like being the decision-maker. I find it easier than doing shuttle diplomacy. I am good at mediation, however, and if the parties prefer it, I believe I am capable of putting aside what I’ve learned in mediation once we are in arbitration. If you would like to try mediating a grievance, discuss that with the other party, and if you agree, talk to the arbitrator about the parameters for that approach.