What Is the Difference Between Mediation and Arbitration?

In New Jersey, we permit and encourage everyone to try to resolve their family law issues themselves, instead of letting a judge decide what is going to happen to their children or their finances. Both mediation and arbitration provide valuable opportunities to control your future, before or during litigation. Understanding the key differences between these alternative dispute resolution processes matters.

Mediation is a non-binding process in which a neutral third party, the mediator, facilitates communication between the parties to help them reach a mutually acceptable agreement. The mediator does not make any decisions for the couple but instead helps them negotiate a settlement. A mediator might memorialize an agreement in notes, a consent order or other written agreement, or might direct the parties to consult with lawyers about finalizing their terms.

In New Jersey, our courts have authority to compel divorcing parties or separating parents to attend mediation at least once to address custody and parenting time, and at least once to address economic disputes like child support, alimony and division of property. Custody/ parenting time mediation can be free, if the parties use the court-employed mediator. Likewise, the first two hours of economic mediation are free if the parties use one of the mediators who participates in the court-sponsored program.

Mediation encourages candor, in an informal setting where you can show documents to the mediator and discuss your ideas freely. When you negotiate in mediation, your entire discussion remains confidential. This enables you to make suggestions or respond to ideas freely, knowing that proposed compromises are not final and cannot be repeated unless you reach a total agreement. Your mediator cannot be compelled to testify later about the conversations, offers or rejection of offers. The mediator’s notes cannot be subpoenaed or used in Court. Until the mediation results in a written agreement, signed by both parties, all issues remain open for continued negotiations or determination by the Court.

New Jersey specifically allows parents and divorcing parties to choose arbitration for all issues. Not all states allow arbitration of custody and parenting time issues and our local laws include specific safeguards and disclosures before anyone can start family law arbitration. Arbitration cannot be required by the Court but it is available as an alternative to courtroom litigation.  

From the start, you will see that arbitration is a more formal process in which a neutral third party, the arbitrator, is appointed to make a binding decision on the disputed issues. Like a judge, the arbitrator hears testimony, reviews evidence like documents, photographs, expert reports and valuations, and applies New Jersey law to support their decision on the issues that the parties present for adjudication.

The structure of arbitration resembles a trial, but the procedures can be adjusted as much, or as little, as the parties request. For example, a trial is always recorded so that there is a transcript available of all of the testimony. In an arbitration that does not include custody issues, the parties can waive that requirement. Unlike a courtroom trial, which gets scheduled based upon the Judge’s availability, arbitrating parties work with their attorneys and arbitrator to choose dates and times that suit everyone involved. Arbitration can often be a faster process than mediation, as the parties can set a timeline for the resolution of their dispute. In some cases, mediation can take longer, as the parties may need more time to negotiate an agreement.

Between the two options, mediation provides the parties with more control over the outcome, as they negotiate a mutually acceptable agreement. In contrast, in arbitration, the decision is made by the arbitrator, and the parties have less control over the outcome. However, some parties may prefer this option if they feel that the arbitrator is more knowledgeable or experienced in the relevant legal issues than they are. Both options allow for more privacy than a traditional courtroom experience.

The suitability of mediation and arbitration for your family depends on your specific circumstances. You might mediate some issues and arbitrate (or litigate) others. The details about your family matter so consult with one of the family law attorneys at Cohn Lifland to learn more about whether mediation and arbitration are right for you.