Arbitration vs Mediation: Cost, Timeline and Which to Pick

Last updated: 12 November 2026. Fees and timelines come from the institutions’ own published documents: the AAA-ICDR 2026 Commercial Fee Schedule and 2025 Annual Report, the JAMS arbitration fee schedule, the LCIA 2023 Schedules of Costs and its 2024 Costs and Duration report, and CEDR’s 2025 Mediation Audit. Treaty status is taken from UNCITRAL.

Short answer: Mediation is a non-binding negotiation run by a neutral mediator, usually finished in a day and costing a few thousand dollars or pounds. Arbitration is a private trial that ends in a binding award, typically takes a year or more and can cost six figures before legal fees. Most business clients should try mediation first and keep arbitration for disputes that need a decision.

Key takeaways

• An arbitration award is binding and can only be challenged on narrow grounds. A mediated settlement binds only if the parties sign one.
• The AAA’s 2026 filing fees run from $1,450 to $13,500 plus a share of large claims, before arbitrator pay. Mediation at the AAA starts with a $350 filing fee per party plus the mediator’s rate.
• The median LCIA arbitration lasted 20 months and cost $117,653 in tribunal and institution fees. CEDR’s mediators report an 87% settlement rate, 70% on the day.
• Arbitration awards travel well under the New York Convention (172 parties). The Singapore Convention for mediated settlements has 25 parties, and neither the US nor the UK has ratified it.

What is the difference between arbitration and mediation?

Both are forms of alternative dispute resolution, but they do different jobs.

• Arbitration is adjudication. One arbitrator or a panel of three hears evidence and argument, then issues an award that decides who wins. The parties usually agree to arbitrate in a contract clause before any dispute arises. Our explainer on what arbitration is and how it works covers the process step by step.
• Mediation is assisted negotiation. The mediator has no power to decide anything. They meet the parties together and separately, test each side’s position and help them find terms they can both accept. If no deal is reached, the parties are free to go to court or arbitration.

The practical question for a client is whether they need a decision or a deal. Mediation can produce outcomes a tribunal cannot order, such as a revised supply contract, a payment plan or an apology. Arbitration produces a winner and a loser, and a document that can be enforced like a court judgment.

How much does arbitration cost compared with mediation?

Arbitration has three cost layers: the institution’s administrative fees, the arbitrators’ fees and the parties’ own legal and expert costs. Mediation has the same structure but on a much smaller scale, because it usually lasts one day. The table below uses each institution’s current published schedule.

Sources: AAA-ICDR Commercial Fee Schedule (arbitration fees effective 1 September 2025, mediation fees effective 1 June 2026), the JAMS arbitration schedule of fees, the LCIA Schedule of Arbitration Costs (2023) and its mediation equivalent, both effective 1 December 2023, and the CEDR Mediation Audit 2025.

Institutional fees are only part of the bill. The LCIA’s Costs and Duration report, which covers 616 cases that reached a final award between January 2017 and May 2024, found a median of $117,653 for tribunal fees and LCIA charges combined. The LCIA points out that counsel and expert costs, which it does not track, are generally much larger. A one-day mediation, by contrast, often costs each side less than a single week of arbitration hearings.

Who pays also differs. In arbitration the tribunal usually allocates fees in the award, and in England and Wales costs commonly follow the event. In mediation each party normally pays its own lawyers and splits the mediator’s fee.

How long does arbitration take, and how long does mediation take?

Mediation is fast. Most commercial mediations are a single day, preceded by a few weeks of preparation and exchange of position papers. CEDR’s 2025 audit, based on 461 UK mediators, reports that 70% of cases settle on the day and another 17% shortly afterwards, an aggregate settlement rate of 87%.

Arbitration is faster than most commercial litigation but still measured in months or years:

• LCIA: median total duration of 20 months from request to final award, rising from a median of 12 months for claims under $1 million to almost three years for claims above $100 million. Tribunals took a median of four months to write the award after final submissions.
• ICDR: the AAA-ICDR 2025 Annual Report gives a median time to award of 20.5 months for international cases worth $1 million or more.
• Settlement before award: the same report says 40% of energy cases and 39% of technology cases closed in 2025 settled before an award, so a large share of arbitrations end in negotiation anyway.

Party behaviour drives most of the delay. The LCIA found that longer cases were mainly the result of extended party submissions rather than slow tribunals.

Is the result binding and enforceable?

This is the biggest legal difference.

Arbitration awards are final. In the United States, a court can vacate an award under the Federal Arbitration Act only on narrow grounds set out in 9 U.S.C. 10, such as corruption, fraud, evident partiality or arbitrators exceeding their powers. A mistake of law or fact is not enough. In England and Wales the Arbitration Act 1996, amended by the Arbitration Act 2025 from 1 August 2025, allows challenges for lack of jurisdiction or serious irregularity, and appeals on a point of law only if the parties have not excluded them. Abroad, awards are enforced under the New York Convention, which has 172 parties according to UNCITRAL.

Mediation produces nothing binding unless the parties sign a settlement agreement. Once signed, that agreement is a contract and is enforced like any other contract, which may mean suing on it. If the dispute is already in arbitration, the parties can ask the tribunal to record the deal as a consent award, which then enforces like any other award. For cross-border deals, the Singapore Convention on Mediation allows direct enforcement of international mediated settlements, but it has only 25 parties. The United States signed on 7 August 2019 and the United Kingdom on 3 May 2023, and neither appears as a party on UNCITRAL’s status table.

Clients who want certainty should check the dispute clause carefully. Our guide to arbitration agreements explains when they are enforceable and how to opt out.

Which is more confidential?

Both are private, but neither is automatically secret.

• Under Rule R-45 of the AAA Commercial Rules, the AAA and the arbitrator must keep the arbitration confidential, but the parties themselves are not bound unless they agree or the tribunal makes an order. Lawyers drafting US clauses should add an express confidentiality term.
• Article 30.1 of the LCIA Rules 2020 goes further: the parties undertake, as a general principle, to keep the award and the documents created for the arbitration confidential.
• Mediation is usually the most confidential option. AAA mediators must keep what they hear confidential, and settlement discussions are generally protected from later use in court, by Federal Rule of Evidence 408 in US federal courts and the “without prejudice” rule in England and Wales.

A court application to confirm, vacate or enforce an arbitration award can make parts of the dispute public.

When should a client choose arbitration or mediation?

Most lawyers frame the choice around a handful of questions.

Choose mediation first when:

• the parties have a commercial relationship worth keeping;
• the dispute is mainly about money and both sides can see a range of outcomes;
• the client needs speed or cannot fund a long case;
• a creative remedy, such as new terms or a staged payment, would help both sides.

Choose arbitration when:

• the other side will not negotiate in good faith, or a binding answer on a point of principle is needed;
• the counterparty’s assets are abroad and the award will need enforcing under the New York Convention;
• the subject matter is technical and the parties want a decision maker with industry expertise;
• a public court case would expose sensitive information.

The two are often combined. The AAA Commercial Rules provide that, subject to either party opting out, cases where a claim or counterclaim exceeds $100,000 go to mediation during the arbitration. In England and Wales, the Court of Appeal held in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 that courts can order parties to try non-court dispute resolution, and the Civil Procedure Rules were changed from October 2024 to reflect this. Refusing to mediate is therefore a real costs risk in English litigation. Mediation can also be useful once an arbitration or lawsuit is under way, for example after disclosure or a ruling on summary judgment has narrowed the issues.

What are med-arb and arb-med?

Hybrid processes try to get the benefits of both.

• Med-arb: the parties mediate first. Any issues left unresolved go to arbitration, sometimes before the same neutral. Using the same person saves time but raises a fairness problem, because a mediator hears private information in separate sessions that an arbitrator should not rely on. Many lawyers insist on a different neutral for the arbitration stage, or written consent to the same person continuing.
• Arb-med: the arbitrator hears the case and writes an award, seals it, and then tries to mediate. If the parties settle, the award is never opened. If they do not, the sealed award binds them.
• Arb-med-arb: an arbitration is started, paused for mediation, and resumes only if mediation fails, with any settlement recorded as a consent award. Singapore’s Arb-Med-Arb Protocol is the best-known example. Specialist bodies such as the WIPO Arbitration and Mediation Center also handle both processes for cross-border disputes, as our explainer on WIPO arbitration sets out.

The simplest approach for most contracts is a tiered or “step” clause: negotiation between senior managers, then mediation within a fixed period, then arbitration or court. The clause should set clear time limits so that the mediation step cannot be used to delay a claim. Our piece on how settlement negotiations work covers the first stage.

Frequently asked questions

Is arbitration cheaper than mediation?

No. Mediation is almost always cheaper because it usually lasts one day. Arbitration involves filing fees, arbitrator fees for hearings and award writing, and months of legal work. The LCIA’s median tribunal and institutional cost alone was $117,653.

Is a mediation agreement legally binding?

Only once the parties sign a written settlement agreement. Before that, either side can walk away. A signed settlement is enforceable as a contract, or as a consent award if the dispute is already in arbitration.

Can you appeal an arbitration award?

Rarely. US courts can vacate awards only for reasons such as fraud, corruption, evident partiality or arbitrators exceeding their powers. In England and Wales, appeals on a point of law are possible only if the parties have not excluded them.

How long does arbitration take?

The LCIA’s median is 20 months from request to award, and the ICDR’s median for international cases of $1 million or more was 20.5 months in 2025. Smaller cases are quicker: LCIA claims under $1 million had a median of 12 months.

What percentage of mediations settle?

CEDR’s 2025 audit of UK commercial mediators reports an 87% overall settlement rate, with 70% settling on the day and 17% shortly afterwards.

Can you mediate during an arbitration?

Yes. The AAA Commercial Rules build in mediation for larger claims unless a party opts out, and parties at any institution can agree to pause for mediation. A deal reached can be recorded as a consent award.

This guide is general information about arbitration and mediation in the United States and England and Wales as of 12 November 2026. It is not legal advice. Fees change and every dispute clause is different, so check the current schedule of the institution named in your contract and take advice from a dispute resolution lawyer before choosing a process.