Mediation vs arbitration vs litigation: three-way contrast

One-line orientation

Mediation, arbitration, and litigation are the three dispute methods in the AIA framework — tested by asking you to identify which is binding, which is private, and which is required first.

Key points

• Mediation:
  • Non-binding, confidential, facilitated negotiation. A neutral third party (mediator) helps the parties communicate and reach a voluntary settlement; the mediator does not issue a ruling.
  • Required by AIA documents before the binding step can be invoked.
  • Mediation is generally faster and less costly because the parties negotiate instead of presenting a full case for a ruling. Outcome is only enforceable if the parties sign a written settlement.
• Arbitration:
  • Binding (when elected in the agreement). A neutral arbitrator or panel hears evidence and renders a final decision that the parties are obligated to follow.
  • Private proceedings — not a matter of public record.
  • Limited discovery compared to litigation; limited grounds for appeal.
  • Generally faster and cheaper than litigation, though more expensive than mediation.
  • Arbitration is private and can limit the exchange of evidence, called discovery, and later review of the decision.
• Litigation:
  • Binding. Conducted in public courts under the full rules of civil procedure.
  • Litigation follows court rules for discovery and appeal. It is generally more public, formal, slow, and costly than mediation.
  • Results are public record.
  • The agreement identifies the binding method. The parties may select litigation, arbitration, or another method.

Mediation → arbitration → litigation: least to most formal

Mediation is non-binding; the agreement selects arbitration, litigation, or another binding method.

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Confusions / comparison

	Mediation	Arbitration	Litigation
Binding?	No — voluntary settlement only	Yes (if elected)	Yes
Private / public	Private, confidential	Private	Public court record
Decision-maker	None — neutral facilitates	Neutral arbitrator(s)	Judge / jury
Discovery	Not an adjudicated evidence process	Commonly limited by rules/agreement	Follows court rules
Later review	N/A	Narrow grounds under governing law/rules	Follows appellate procedure
Relative speed / cost	Generally lowest	Varies; often between the other two	Generally higher than mediation
AIA role	Required first when the contract says so	Binding if elected	Binding if selected in the agreement

Related

→ pp-dispute-resolution-ladder (this module): the required sequence — initial decision → mediation → binding step · pp-termination-suspension (this module): ending the contract vs. disputing it · ProPractice: AIA B101 Art. 8 and A201 Art. 15.