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Is Arbitration or Mediation Always Binding?

Lawsuits can be expensive and may have an uncertain outcome. However, alternative dispute resolution (ADR) techniques, like mediation and arbitration, offer another viable path to pursue justice. This can be better understood as an outside-of-court settlement option. Mediation and arbitration are privately administered processes for settling legal disputes that are not always binding.

The two processes are overseen by an impartial third party and may be legally binding, depending on the case specifics. Another notable fact about these ADR techniques is that they are less of a public record than, say, a court case. One or both of the disputing parties may place a high value on maintaining privacy throughout the proceedings.

At The Buzbee Law Firm, we can help explore your options to pursue justice. If you decide to opt for arbitration or mediation, our lawyers will ensure that your rights are protected throughout the proceedings.

What Is the Main Difference Between Arbitration and Mediation?

Arbitration and mediation are two terms that are often confused with one another. While the concepts may be related, the primary distinction is the method through which you resolve the dispute. Both choices will get you to the desired outcome legally, but they take different routes.

Here’s how mediation is different from arbitration:


Mediation is an informal, private procedure facilitated by an impartial third party (the mediator). The mediator might have a legal background yet can’t offer legal advice or decide the outcome of a case. The mediator acts as an intermediary for the disputing parties, helping them talk things out and settle the matter on their terms.

Mediation is not a legally binding procedure. The conditions of a settlement agreement reached by mutual agreement become binding after both parties have signed it. If an agreement is not reached, either party may pursue arbitration or take the matter to court.


Arbitration functions similarly to a trial in court. It requires both parties to submit evidence and argue their case. It is less time-consuming and formal than going to court; it also costs less.

In contrast to the courts, where a judge or jury judges a case, arbitrators often hear and determine cases in panels of one to three. When disputes can’t be resolved via mediation, parties may resort to arbitration for a legally binding judgment.

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Are Arbitration Agreements Legally Binding in Texas?

In Texas, arbitration agreements can be binding or non-binding. When arbitration is binding, it can be enforced in court. However, if the arbitration is not binding, you may forward the matter to court. The Buzbee Law Firm lawyers can help you better understand the binding nature of your arbitration proceedings.

All additional contracts you enter during the arbitration process are considered legitimate and enforceable. Suppose one of the parties to a binding arbitration agreement later decides to file a lawsuit. The court will likely give the agreement minimal weight since a binding deal is already in place. In fact, the litigating party may face counterclaims for violating the arbitration agreement.

Is Mediation Legally Binding in Texas?

Mediation is a viable option for many civil cases. When a peaceful resolution is possible via mediation, the legal system strongly advises going that route first. Mediation in Texas can be legally binding if both parties agree.

Suppose you and the opposing party can settle the dispute via mediation; you save the expense and time commitment of going to court. If the parties can reach an agreement through mediation, the resulting agreement can have the same legal power as a court ruling.

Should You Mediate First?

Without a doubt, mediation should be the first attempt at settling a conflict. Unlike arbitration, which may take weeks or months and cost more, mediation can be completed quicker and for a fraction of the cost.

The most fundamental benefit of mediation is that it helps parties resolve their disagreement on collectively decided terms. However, if the matter goes through arbitration or ends up in court, the arbitration panel or court will decide the outcome.

Do You Need an Attorney for Arbitration or Mediation in Texas?

The informal atmosphere of mediation and arbitration hearing makes it more likely that you may choose to represent yourself instead of hiring legal counsel. However, not hiring an attorney can harm your case in more ways than one. Here’s why you should consult an attorney to represent your case:

  • Inexperience with the legal system might lead to a party missing key pieces of evidence, ultimately hurting their case.
  • How the evidence is represented impacts the arbitrator’s final decision. They will collect and analyze all evidence, but the presentation method also matters.
  • You may be disadvantaged if the opposing side is represented by a lawyer or a business representative with experience in negotiation and arbitration.
  • The procedure is often intricate and rule-bound due to the legal nature of the contracts involved. You must have in-depth knowledge to make a winning argument.

If you are considering arbitration or are facing mandatory arbitration of a dispute, consulting with an attorney in advance will better equip you to make good decisions about how to proceed, including whether you may need legal representation at the arbitration hearing.