Arbitration vs. Mediation
What’s the Difference Between Mediation and Arbitration?
When managing workers’ compensation claims, you’ve likely heard about both mediation and arbitration—two Alternative Dispute Resolution (ADR) methods. But what exactly sets them apart? Understanding the differences—and knowing why mediation often offers the best balance of cost-efficiency and positive outcomes—can transform how your organization approaches claims management.
🤝 What Is Mediation?
Mediation is a voluntary, collaborative process facilitated by a neutral third party— the mediator. The mediator helps both sides communicate, clarify misunderstandings, and work toward a solution that meets their shared objectives.
How it works at Prism:
Parties agree to mediate.
They select a mediator and agree on a date— typically within a few weeks.
A mediator facilitates conversations with each side to explore interests and options.
If both parties agree, a written settlement is drafted.
Settlement terms are implemented, closing the claim.
Why it matters:
Cost-effective: Far cheaper than arbitration or litigation.
Fast: Often resolved in a single session.
Empowering: Parties remain in control.
Relationship-centric: Encourages mutual respect and future collaboration.
⚖️ What Is Arbitration?
Arbitration is more formal. A neutral arbitrator evaluates evidence, hears presentations, and then issues a binding or non-binding decision—similar to a private judge.
How it works:
Parties agree to arbitrate and select an arbitrator.
A hearing is scheduled—typically taking weeks or months.
Evidence and testimony are presented (sometimes under oath).
Arbitrator issues a decision.
If binding, it’s enforceable by law; if non-binding, parties still need to negotiate.
Why it matters:
Faster than court, but more costly and formal than mediation.
Definitive outcomes, which can be reassuring—or limiting.
Less opportunity for creative, interest-based solutions.
Less collaborative, so it may impact future working relationships.
Why We Emphasize Mediation at Prism Group
At Prism Group, we know that effective claims management isn’t just about resolving numbers—it’s about preserving trust, reducing friction, and managing costs responsibly. Our core values—empathy, care, people first, and respect—guide how we facilitate every mediation:
Empathy: We honor and consider the perspective of all parties involved.
Care: We listen and treat every participant with dignity, giving our full attention and authentic concern for the situation.
People First: We recognize that behind every claim is a person with real concerns.
Respect: In addition to respecting people’s humanity, we also respect people’s time, money, and patience by staying focused on the goal at hand— resolution.
A Real-World Example
Consider a manufacturing employer facing a prolonged workers’ comp dispute.
Over an 18-month span, legal fees climbed into the tens of thousands, and the relationship between the employer and injured worker suffered. Through a single mediation session facilitated by Prism Group, the parties:
Restored dignity to the process
Avoided costly hearing or arbitration fees
Reached a settlement that all parties felt good about in an afternoon, not months
Outcomes like this exemplify our commitment to resolving the human element—not just the dollars and cents.
When to Use Each Method
Use Mediation if you value speed, cost savings, confidentiality, and maintaining constructive relationships.
Use Arbitration when you require a definitive ruling and are prepared for greater time and cost investments.
📞 Ready to Explore Mediation for Your Next Claim?
At Prism Group, we specialize in workers’ compensation mediation tailored to self-insured employers, insurance carriers, and sophisticated HR teams. Let us help you:
Save time and money
Strengthen workplace trust
Avoid public scrutiny
Contact us to schedule a confidential consultation and discover why mediation may be the most strategic tool in your claims management toolkit.
About Prism Group
Prism Group is a trusted ADR provider committed to resolving workplace injuries with dignity, effectiveness, and empathy. Our team of certified mediators brings decades of experience helping organizations achieve faster, more humane outcomes—without sacrificing professionalism or process.