Negotiate, mediate or arbitrate

As a general rule, CEDR has often used a step analogy to this issue:

                              Arbitrate
                Mediate
Negotiate

Negotiate first. Where negotiations break down or parties are unable to agree a common solution, mediate and if it then becomes obvious that a judgement is needed, arbitrate or litigate.

However a mediator can often provide a new dimension to the negotiation process by:

• Restarting negotiations that have stalled with little or no progress and when trust and confidence between the parties may also be at a low
• Bringing a fresh neutral set of eyes to an old problem. Conflict, by its very nature, tends to narrow a party’s focus and entrench positions
• Taking a broader perspective on the problem and helping the parties to explore creative solutions, even in disputes where money is the only issue for resolution
• Exploring and challenging the strengths and weaknesses of each party’s case in the safety of private meetings and help move parties toward a realistic negotiated settlement
• One critical difference between face-to-face negotiations and mediation is the use of private meetings which provide a confidential and safe environment to explore settlement options.

Arbitration, like litigation, provides a binding decision imposed by an independent third party. Mediation on the other hand seeks to help parties achieve their own binding agreement on a mutually acceptable commercial and legal solution.

Following this a party’s only recourse is appeal, whereas, when a mediation has not achieved settlement, parties are free to explore additional dispute resolution processes including arbitration or litigation.

Back to top