Arbitration offers those who agree to it, a more structured process than Mediation. Much like a court proceeding, both sides tell their story and in Arbitration, an Arbitrator (often a retired Judge or Attorney) renders a binding decision. This structure offers businesses a sense of predictability, finality and a fairly limited cost. Arbitration also allows the parties to pick a specialist in a situation where detailed knowledge of a particular area of the law can improve the fairness of the outcome. Arbitrations are also private, where litigation is not.
Mediation, with the conditions of being non-binding and needing mutual agreement, is often not the first choice for businesses with deep pockets who have much more to risk in defending law suits than those initiating the potential litigation. Less common business disputes, those with a more balanced risk between the parties, can be a good choice for mediation.
