When there is a conflict, there are three methods which can be adopted to seek a solution:

  1. force, whereby there is direct confrontation between the parties and the stronger wins prevailing on the weaker;
  2. adjudication, whereby who is the winner is not determined by direct confrontation but decided by a third party, a chieftain, a judge or an arbitrator, who, applying the rules accepted by the community or his sense of justice, decides who is the winner;
  3. mediation, whereby the parties overcome the conflict by finding an agreement.

The use of force is not accepted by our society, adjudication is the method used each time the decision of a judge or arbitrator is sought, mediation is without doubt the most civilized method, but for along time adjudication has been considered more efficient. However, the progressive development of mediation in the last twenty years, first in the United States, then in Europe, shows that when there is adequate knowledge of the mechanisms of mediation this method can be more efficient that adjudication because it is faster, less expensive and more effective.

Object of the proceedings

Object of arbitration are the claims and rights of the parties, object of mediation are the claims and interests of the parties.

The difference between the two can be shown with a simple example: a supplier has an important credit with a client, he has a right of claim for the recovery of his credit which he can pursue before the courts or with arbitration, but maybe his interests might be satisfied better if he takes a different route. For instance, if the client’s finances are in sufferance and the supplier has in the past invested in research for the production of the goods supplied or has stocked specific materials for the production, his interests might be better satisfied if instead of exercising his right of action, thus aggravating the financial situation of his client, he negotiates to find a solution that provides for an on going business relationship and the gradual recovery of his credit in whole or in part.

Structure of the proceedings and role of the participants

The different objects of arbitration and mediation determine the different roles played by the participants and the different structure of the proceedings.

The role of the arbitrator is to take a decision and issue an award. The mediator, on the other hand, is not called to decide and in fact does not express any opinion on the claims and arguments of the parties. The mediator’s role is to listen to the parties, to understand the origin of the conflict, examine with the parties the different aspects of the conflict and possible areas of agreement, communicate with the parties and facilitate communication between them, to guide them towards a shared solution.

In arbitration the main actors are the arbitrators and the consultants who represent the parties and argue their claims, the parties have a secondary position.

In mediation the parties play the leading role, they interact and decide, while the consultants and the mediator stand back to guide and assist.

Arbitration proceedings are structured to place the arbitrator in the best position to evaluate the parties’ claims, the procedure should provide for a clear statement of claims, guarantee that both parties have equal opportunity to submit their arguments, provide for evidence. The arbitrator decides taking into account only the specific claims and arguments raised by the parties and the evidence delivered during the proceedings, in the light of the applicable rules and principles. The outcome of arbitration is qualified by these premises and proceedings and must follow a predetermined route to produce a solution that is technically correct.

In mediation, since there is no third party decision, most procedural mechanisms that are necessary where there is adjudication, are not important; there are no limits to what is taken in consideration and to the solutions that can be adopted. In mediation, any aspect of the relationship between the parties can be considered relevant, or ignored, irrespective of evidence; arguments and requests can be introduced and changed at any time; attention can be given, not only to the past, but also to the future. It is surprising how often in mediation a conflict that appears to be strictly related to financial issues is resolved by exploring the personal and emotional aspects of a relation, an apology or an expression of appreciation can trigger off the final agreement, creating a win-win situation by making both parties feel that their position has been given due recognition.

Confidentiality and voluntary participation

Both arbitration and mediation operate following the principle that the procedure is confidential and voluntary, however the principle operates differently in the two proceedings.

Arbitration is considered confidential because the existence of the action, the minutes, and the award are not published. In mediation, confidentiality has a wider meaning, it also operates within the proceedings: no minutes are drafted to record what emerges during mediation, what comes to light cannot be used outside the proceedings. The mediator can hear the parties separately and can only report to the other side what is referred to him during the individual meetings if he is expressly authorised to do so. The arbitrator, to the contrary, must follow the principle of transparency, the parties must have common knowledge of any proposal submitted to and by the arbitrator.

Both proceedings are considered voluntary as in both cases the parties have chosen the procedure, either by including a specific provision in a contract or by agreeing to submit a controversy to arbitration or mediation. However, if the parties have provided for arbitration, the controversy must necessarily be decided with this procedure and, consequently, if one of the parties fails to appoint his arbitrator this will otherwise be provided for, and the award will be issued even where one of the parties has not filed appearance. There can be mediation only if there is participation by both sides and the proceedings can be interrupted at any time if one of the parties does not wish to go further.

Outcome of the proceedings

The outcome of arbitration differs from that of mediation with reference to form, object and impact on the parties.

The arbitrator’s award imposes a solution, it does not solve the conflict between the parties, but identifies, in relation to the claims submitted, a winner and a loser.

The agreement that is the outcome of a mediation is an act of the parties that does not identify a winner and a loser, it sets out the way in which the conflict is resolved, both parties can be considered winners because each party in reaching the agreement has found the way to satisfy his interests.


After this rapid comparison, an obvious question arises: arbitration or mediation?

When attention was first given to mediation in Italy, it was considered a good tool to solve controversies of low economical value, where one of the parties had a much stronger contractual strength, there were, for example, a lot of mediations between consumers and telephone companies. Recently it has become evident that, in fact, the higher is the economic value, the higher is the rate of success, since parties who have high economic interests at stake favour a pragmatic solution born from their business experience and take into consideration above all business interests. Further, practice has shown that is would be wrong to generalise and say that mediation is not appropriate for certain categories of controversies, conflicts of all types have been solved with mediation: family, succession, agency, distribution, sale, insurance, investments.

However, arbitration is often considered preferable because it has the advantage of offering the parties a final solution without requiring an agreement, of delegating the decision to an expert.

It would be wrong to try and identify which procedure should be considered more important or preferable in general terms. If the scope of ADR is to solve a conflict within a procedure chosen by the parties, one cannot consider that a procedure that finds a solution by adjudication is more important that one that uses mediation or vice versa.

It would also be wrong to consider the two procedures as alternative because when mediation is chosen, arbitration is not excluded and mediation proceedings can be introduced at any stage of arbitration.

In fact, when considering how to solve a conflict, the best way would appear to be to contemplate the progressive use of both of these ADR proceedings. A first attempt should be made to find the optimal solution with mediation, if this is not possible the parties will confront themselves in arbitration and will call a third party to decide who is the winner and who is the loser.


Milan, 21 March 2023

©Antonietta Marsaglia