Arbitration and conciliation are alternative dispute resolution procedures. Arbitration is a legal proceeding where parties meet in court, while conciliation is informal and keeps parties separate. Arbitration agreements are binding, while conciliation resolutions have less legal authority. Both methods have high success rates in resolving disputes.
There are several differences between arbitration and conciliation. While both represent a meeting being assembled to discuss a deal, they are handled in entirely different ways. In arbitration, each party meets in one room, while during conciliation, they are kept separate. The arbitration is administered by a representative of the court and each agreement is binding under regional law. Conciliation is much more informal and has no legal significance.
The main difference between arbitration and conciliation is that one is an actual legal proceeding while the other is an informal attempt to settle a matter without the courts. Both methods are alternative dispute resolution procedures designed to help parties resolve their disputes. During the arbitration, each party would meet in court and discuss the matter in detail, and in many cases, the conversations would become quite tense. It is not uncommon in arbitration for the arbitrator to temporarily halt the proceedings because the arguments become counterproductive and this professional’s job is to ensure that the negotiations proceed in a way that ultimately creates a resolution. The arbiter has full authority over the assembly.
During conciliation, both parties are kept separate to avoid the tense moments that occur in the arbitration. The conciliator relays messages back and forth between the two parties and steers the conversation toward an agreement that everyone can agree on. While both arbitration and conciliation allow each party to make their case and argue for a favorable verdict, the conciliator is very limited in what he or she can legally do. For example, he cannot subpoena witnesses or make effective recommendations to the court. If no agreement is reached after the conciliation process, the meeting was essentially for naught.
Conciliation and arbitration are also viewed differently by the courts. When a contract is signed during an arbitration hearing, it is considered a binding legal document that both parties will be forced to adhere to. A conciliation resolution has much less legal authority, and both parties are free to change their minds without the other party having legal recourse.
Although arbitration and conciliation have distinct differences in terms of legal authority, both methods have high success rates in resolving disputes without involving an actual process. Each of these methods saves attorney fees for all involved and simplifies the entire process so that you get an immediate resolution. Since both parties are well aware that a failure in arbitration and conciliation would mean a costly process, each party is usually willing to negotiate to find an acceptable solution.
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