Mediation is an informal, nonbinding and strictly confidential process in which the parties work with an impartial third party, the mediator, to resolve their dispute. The mediator does not decide the case but rather helps the parties reach a mutually acceptable solution. All parties must of course agree to submit the dispute to mediation. It should be noted that even if they agree, they are free to stop the mediation process at any time. The idea is for the parties to remain in control at all times.
Mediation is not appropriate in all cases, but it will often be a valuable alternative to litigation, namely:
- where cost is an issue;
- where a speedy resolution of the dispute is desirable;
- in cases involving a business relationship;
- where confidentiality is of the essence.
In arbitration, the case is decided by one or more impartial arbitrators in a final, binding arbitral award. Unlike litigation, the parties may require the arbitrators to have specific expertise, eg, in a specific area of technology, and can contractually limit the issues subject to arbitration. Arbitration is generally efficient in terms of timing but can be very costly.
The efficiency and speed of litigation vary, depending on the subject-matter of the dispute, the type of proceedings and the judicial district.