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Key Differences Between Mediation and Arbitration

By Sarah Jacobs, Esq.

When it comes to divorce—or any legal dispute, for that matter—litigation-free alternatives such as mediation or arbitration are increasingly popular strategies for couples looking to end their marriages. 

While mediation and arbitration are similar in the sense that they both involve a neutral third party to reach a divorce agreement, there are some key differences to be aware of. Every divorcing couple’s circumstances are unique, so it’s important to understand how these differences may lead to advantages or disadvantages depending on your situation. 

What is mediation? 

Mediation is an alternative dispute resolution process that allows for a facilitated negotiation between both parties, either face-to-face or in separate rooms (virtual or in person), with the assistance of a neutral third party. 

The role of the third-party mediator is to help both parties attempt to resolve outstanding issues and facilitate productive communication, with the goal of bridging the gap between both positions and finding a mutually agreeable solution. 

The third-party mediator will not

  • Assess the validity or appropriateness of any documents presented 
  • Make credibility determinations 
  • Take testimony of the parties or third parties
  • Give legal advice, take sides, or make decisions

What is arbitration?

Arbitration is a form of alternative dispute resolution that is similar to a courthouse trial but can provide the parties with more customization and a potentially expedited timeframe for resolution. Like mediation, arbitration involves a neutral third party—but unlike a mediator, the arbitrator’s job is to make a decision on the issues being disputed, based on evidence and testimony provided by both parties. 

There are two types of arbitration: non-binding and binding. 

  • In non-binding arbitration, either party can choose to reject the arbitrator’s decision and then either pursue a binding arbitration or move into or further through the court system.
  • In a binding arbitration, both parties agree to abide by the arbitrator’s decision, with limited rights to appeal.  

While mediators and arbitrators are generally not the same person, in New Jersey, a mediator may become an arbitrator by signing what’s known as a Minkowitz waiver. Otherwise, mediators and arbitrators have distinct roles and functions within the divorce process. 

Four key differences between mediation and arbitration 

Because mediation and arbitration are both forms of alternative dispute resolution that involve a neutral third party, they have some similarities—such as often being faster, more cost-effective, and potentially less contentious than courtroom litigation. 

With both methods, you can continue searching until you find a mediator or arbitrator who is satisfactory to both parties. At that point, each party will present their needs, concerns, positions, and other related evidence as needed. The mediator or arbitrator will then collect all relevant information to be considered in an attempt to resolve the legal dispute(s). 

Despite these similarities, there are some key differences between mediation and arbitration: 

1. Binding vs. non-binding 

Arbitrations are used to render judgments, meaning that the process is intended to result in a clear and final resolution of a dispute. Generally, parties that select binding arbitration have very limited rights of appeal and only as related to certain issues in dispute. (Though it’s important to note that depending on the nature of your agreement, the arbitrator’s decision may be non-binding.) 

Conversely, mediation results in recommendations provided by a neutral third party, which can then be accepted, modified, or rejected by the divorcing parties.

2. Cost 

Arbitration can be more affordable than litigation, but with the variables involved, a lower price point isn’t a given. However, that price may come with a faster, lower-conflict process than litigation. 

Mediation, on the other hand, is typically less expensive than arbitration. With that lower price, though, remember that mediation does not guarantee a resolution to the dispute. If both parties cannot reach a mutual agreement through mediation, you may need to pursue arbitration or litigation. 

Note that for each method of alternative dispute resolution, the costs depend on the complexity of the matters involved and the level of cooperation between you and your spouse. 

3. Informal vs. formal 

Arbitration is a formal, structured process, with party participation being controlled by everyone involved. While arbitration can be less contentious than litigation, it is still an adversarial process, which can add tension to situations with significant amounts of conflict. Once the arbitrator has rendered a decision, you will be legally bound to follow that ruling (unless you have opted for a non-binding resolution.)

Mediation, on the other hand, is informal, with each party being an active participant until they resolve a dispute. There is no “winning” or “losing” in mediation, so it also tends to be easier on children or other family members involved. 

4. Orders vs. agreements

Before arbitration can take place, an execution of an arbitration order is required. This order establishes the scope, cadence, and rules of the arbitration and is governed by the statutory process (i.e., relevant legal requirements for initiating, conducting, and enforcing an arbitration proceeding) as governed by the New Jersey Revised Uniform Arbitration Act.

On the other hand, mediation is guided by retainer agreements. These agreements are signed, but not regulated by court order, and do not need to comply with statutory process as long as both parties agree. As such, there is more leeway to how the mediation can be conducted. 

If you’re in need of an alternative dispute resolution attorney, Jacobs Berger can help 

Alternative dispute resolution offers a more flexible and customizable pathway to divorce, but it’s important to fully understand what both options entail before moving forward. If you’re seeking legal counsel as you navigate the mediation or arbitration process (or if you’re not sure which option is best for you), our Morristown family law firm is here to support you.

Contact our team to coordinate your strategy planning session.

Contact Our Morristown Attorneys Today

At Jacobs Berger, our attorneys are experienced in protecting our clients across Madison, Randolph, Tewksbury, Morristown, and the greater Morris County area in all family law-related issues.

To schedule a strategic planning session with one of our experienced team members regarding your particular case, please contact us online or through our Morristown, NJ office at (973) 354-4506.