Mediation vs. Arbitration vs. Litigation
Also known as: Dispute Resolution Methods, ADR
Three different ways to resolve disputes. Mediation is a facilitated negotiation. Arbitration is a private decision by a neutral third party. Litigation is a lawsuit in court.
Detailed Explanation
Mediation is a voluntary process where a neutral mediator helps both parties reach a mutual agreement. The mediator does not decide the outcome — both parties must agree. Mediation is non-binding unless both parties sign a settlement agreement.
Arbitration is a process where a neutral arbitrator hears both sides and makes a decision, which is usually binding and final. It is faster than court but offers limited appeal rights and less discovery.
Litigation is a lawsuit filed in court. It provides a jury trial, full discovery rights, public proceedings, and appeal rights — but it is the slowest and most expensive option.
In Your Contract
Most builder contracts require mandatory arbitration, sometimes with a mediation step first. Look for the "dispute resolution" section, which typically lays out the required process.
Key Points
- 1Mediation: voluntary, non-binding, parties control the outcome.
- 2Arbitration: private, binding, limited appeal, arbitrator decides.
- 3Litigation: public, jury trial, full discovery, appeal rights, but slow and expensive.
- 4Most builder contracts require arbitration and prohibit litigation.
- 5Some contracts require mediation first, then arbitration if mediation fails.
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