Mediation vs. Arbitration in Texas: What Is the Difference, and Which One Binds You?

This post discusses Texas law.

Alternative dispute resolution, or ADR, covers the ways disputes get resolved outside a full court trial, primarily mediation and arbitration. They sound similar. They are not. Mediation uses a neutral third party to help the sides reach a voluntary settlement; nobody can force an outcome on you. Arbitration involves a neutral decision-maker who resolves the dispute, more like a private judge.

The binding question depends on the method. A mediated settlement becomes binding once the parties agree and sign; before that moment, you can walk away. Arbitration may be binding or non-binding depending on the parties’ agreement, and binding arbitration awards are much harder to appeal than court judgments. Many people discover only after a dispute arises that a clause in a contract they signed years ago committed them to binding arbitration.

ADR is often faster, less expensive, and more private than litigation, and it keeps the outcome more within the parties’ control. But it is not right for every dispute, and some matters do need to be litigated. I make sure clients understand what they are agreeing to before they enter any ADR process, and I advise honestly on whether ADR serves your interests in your particular situation.

Before you agree to any dispute-resolution clause or process, understand what you are agreeing to. Call or text 512.761.8479.