Mediation vs. Arbitration

What is Mediation?

Mediation is a settlement conference where two or more parties come together in an attempt to settle issues between them with an unbiased third party who assists and intervenes in the negotiation process.

What is Arbitration?

Arbitration is also conducted by an unbiased third party, but instead of assisting the parties in coming to a settlement, if an agreement is not reached, the Arbitrator will make a decision that the parties are bound to comply with through the issuance of an Award.

In Colorado, every dissolution of marriage, legal separation and allocation of parental responsibilities case is required to participate in Mediation if an agreement is not otherwise reached. In this scenario Mediation is a requirement by the Court. However, Mediation can take place outside of a court case. For example, two neighbors can mediate a dispute or two employees in a workplace can use Mediation to bring resolution.

Arbitration is not required in Colorado domestic cases. However, it can be a requirement in some contracts or clauses between parties as an alternative dispute resolution. This is a tool that is used largely by corporations and employers to avoid the cost of litigation should a conflict arise. Arbitration can also be voluntary. Some parties may opt to utilize an Arbitrator to help bring their case to resolution instead of pursuing litigation in a court setting.

The process for both of these conferences seems similar and they do start out that way. Initially a Mediation and an Arbitration will start with the Mediator or Arbitrator hearing both parties and trying to assist the parties in coming to agreements. Where this differs is if an agreement is not able to be reached.

In Mediation if an agreement is not reached at all, the parties and/or Mediator can determine that the negotiations have reached an impasse. At that point, the Mediation may end indefinitely, be scheduled for a follow-up session and/or have the agreements that were able to be reached memorialized in a formal settlement document that is signed by both parties.

If the parties are not able to come to an agreement in Arbitration, the Arbitrator takes off their Mediator hat and puts on their Arbitrator hat. At this point, the process mirrors a court hearing in many ways. The Arbitrator can weigh evidence presented, hear witness testimony and at the end of the Arbitration, the Arbitrator awards the parties with an Award. This Award is usually final and binding.

An Arbitration is a more casual court hearing in that the Arbitrator does not have to follow the strict Rules for evidence or civil procedure that a Court official will. In this way, the Arbitrator may include and review evidence that would otherwise be barred at a court hearing. Though the Arbitrator does have to follow rules in terms of due process to make sure that both parties are heard, have the opportunity to present evidence and are treated fairly, the Arbitrator has the discretion to shape the way that the "hearing" is conducted.

While this does alleviate the anxiety of attending a hearing since the Arbitration is more in a more casual setting, Arbitration can cause similar stresses as hearings do. In both scenarios the fate of the case and of every party involved rests in the hands of one individual. This leaves parties back on the footing of a "winner" and a "loser" when entering into Arbitration.

Mediation, on the other hand, lets the parties take the reins on settlement and outcomes. The Mediator is simply a conduit for negotiations. The parties can decide what issues are presented and can feel free to voice their genuine concerns and desires without the fear that the Mediator will turn to an Arbitrator that may hold biases when determining the outcome of their Award. Parties are able to leave a Mediation (hopefully) feeling like they gave it their best shot rather than feeling defeated and then having to endure a more casual litigation process.

When parties voluntarily engage in Mediation, it can air out much of the muck of the litigation process. Knowing that the sole purpose of the conference is to avoid litigation by coming to resolution without the need for a hearing can be calming for parties. Mediation can give parties the agency to negotiate on their own terms.

There are benefits to Mediation as well as Arbitration. Both are important tools in avoiding the cost and stress of litigation. But if you are looking at one or the other, the best way to answer which is better for you is by asking yourself how comfortable you are putting your parenting time, decision-making, support payments and division of assets and debts in the hands of one person.

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