How is mediation different from arbitration?

out of court negotiationsSometimes injured parties try to avoid a jury trial and instead rely on out-of-court negotiations and settlement options. If direct negotiation with the negligent party (or parties) fails to reach an adequate settlement for the victim, the victim could opt for mediation or arbitration. Our North Carolina injury lawyers frequently participate with both of these options and help prepare clients for each. To understand the differences between these out-of-court options, first understand how each work:

Mediations are informal gatherings between the opposing parties and are overseen by a mediator. The mediator is an objective neutral party who helps both sides move forward toward a mutually agreeable settlement figure. The accident is discussed in detail. The victim and their counsel provide medical bills, estimates of lost wages, and accident evidence to accurately quantify their losses. The mediator moves back-and-forth between both sides delivering settlement offers until both parties agree on terms. 

Arbitrations involve a small arbitration panel that acts similar to a jury. The victim and the defense each choose a member for the panel, and a third objective panel member is also included. All case materials are presented to the abritration panel, and the panel determines the settlement.

Out-of-court settlements are usually attractive because they:

  • Reach a settlement faster than court proceedings in most cases.
  • Require less expenses. Court costs are avoided.


However, there are downsides to settling outside of court:

  • Settlements could be smaller. The American Healthcare Association studied awards and found that arbitration settlements were approximately 35% lower on average than similar cases that followed a jury trial.
  • Decisions are often binding. Mediation and arbitration decisions are generally final. Appeals for arbitrations are rare. Without a jury trial in a court, the victim has no means of appealing the case and having the case heard by a new jury and judge.


The length of a jury trial is not easy to predict. Sometimes accident victims simply want to move on with their lives and avoid a lengthy trial. Our attorneys can help advise what would be in the victim's best interests depending on the circumstances of their case.

If you would like to hear more about these out-of-court options, are attorneys discuss them during a legal podcast here. We also provide free case evaluations.

Note: As of this writing, a pending federal proposal could change how credit card companies include arbitration-only clauses in their contracts. Pending federal legislation changes would also affect nursing homes that use binding arbitration agreements. Learn more at the previous link.