Litigation is no longer the default solution for legal disputes in South Africa. The cost, complexity, and delays associated with court proceedings have made alternative dispute resolution (ADR) an increasingly attractive option for both individuals and businesses.

Among the ADR methods available, mediation and arbitration are the most widely relied upon. Both provide pathways to resolve disputes outside the courtroom, but they differ in structure, cost, enforceability, and strategic purpose. Choosing the right process can determine how effectively, affordably, and sustainably your dispute is resolved — which makes understanding these options essential before taking your next step.

What Is Mediation – and When Is It Used?

Mediation is a voluntary, confidential process where the parties work with an independent mediator to negotiate a resolution. Unlike a judge or an arbitrator, the mediator does not impose a decision. Instead, they facilitate constructive dialogue, help clarify the real points of conflict, and guide the parties toward an outcome they can both accept.

Mediation excels in disputes where relationships are ongoing or valuable, and where an adversarial approach could create long-term damage. Common scenarios include:

• Family or divorce matters, where co-parenting, asset division, or inheritance requires ongoing cooperation
• Employment and workplace conflicts, where relationships, reputations, and productivity are at stake
• Commercial and contractual disputes, particularly where long-term partnerships or supply chains exist
• Neighbourhood and sectional title disputes, where avoiding lasting hostility is crucial

One of mediation’s greatest advantages is flexibility. Because the solution comes from the parties themselves, they are free to agree on outcomes that courts or arbitrators cannot order — such as tailored payment plans, renegotiated terms, or creative compromises that preserve the underlying relationship.

For example, in a business partnership dispute, mediation might result in a strategic restructuring of responsibilities instead of terminating the partnership entirely. In a sectional title disagreement, it may lead to a mutually agreed schedule for repairs or cost-sharing, avoiding formal litigation and community tension.

Mediation works best when both parties are willing to engage in good faith. If one party refuses to participate or is intent on obstruction, the process can stall. But when the willingness is there, mediation offers an efficient, low-cost, and relationship-focused alternative to litigation.

What Is Arbitration – and How Does It Differ?

Arbitration is a private, binding process where a neutral arbitrator is appointed to hear the dispute and deliver a final, enforceable award. It is often described as a hybrid of litigation and ADR — structured like a court process, but conducted privately and with greater flexibility in procedure.

Arbitration is particularly suited to:

• High-value commercial disputes, where enforceability and finality are crucial
• Complex technical matters, such as construction, engineering, or professional liability cases, which benefit from arbitrators with industry expertise
• International and cross-border disputes, where parties prefer a neutral, private forum instead of unfamiliar courts

The key distinction from mediation is control. In arbitration, the parties hand over the power to decide the outcome to the arbitrator. Once the award is issued, it is legally binding, and the grounds for appeal are extremely limited. This provides certainty — but eliminates the flexibility to negotiate terms or preserve relationships.

While arbitration is faster than traditional litigation, it is more structured than mediation and often involves:

• Legal representation and formal submissions
• Discovery or document exchange
• Hearings with witness testimony or expert input

This structure comes with higher costs, but the trade-off is a private, enforceable resolution without the delays of the public court system.

A typical example might be a dispute under a commercial supply contract with an arbitration clause. Here, arbitration ensures that the outcome is binding and enforceable, often critical to protecting large financial interests or sensitive business relationships that can’t tolerate prolonged uncertainty.

Mediation or Arbitration? The Questions That Clarify Your Choice

Choosing between mediation and arbitration requires more than a preference — it is a strategic decision that impacts time, cost, relationships, and enforceability. The following questions can help clarify the best path forward:

• Do you need a binding, enforceable outcome — or a flexible solution you can shape?
  • Arbitration delivers finality with enforceable awards.
  • Mediation allows parties to create a resolution that reflects shared interests.
• Is preserving the relationship a priority?
  • Mediation supports cooperation and repair.
  • Arbitration resolves the dispute but does not heal the relationship.
• Are both parties willing to engage in good faith?
  • Mediation succeeds only with mutual participation.
  • Arbitration can proceed even with a non-cooperative party.
• Is time or cost your biggest concern?
  • Mediation is faster, simpler, and generally less expensive.
  • Arbitration is structured and costlier, but still faster than litigation.
• Does your contract dictate the process?
  • Many commercial contracts contain mandatory arbitration clauses, which limit your ability to choose mediation unless both parties agree.

Real-world application:

• Two companies with a long-term supply agreement may choose mediation first to avoid disrupting business operations, escalating to arbitration only if talks fail.
• A high-stakes professional negligence claim may go directly to arbitration for a final, enforceable ruling.

Framing the choice in terms of your goals and risks ensures that the process aligns with your legal and commercial priorities.

Time, Cost, and Control 

When parties weigh the choice between mediation and arbitration, three factors usually dominate the discussion: time, cost, and control. These practical considerations often matter more to clients than the technical differences between ADR methods because they directly impact resources, strategy, and risk.

Mediation - Speed, Affordability, and Flexibility

Mediation is typically the faster and more cost-effective option. Sessions can often be arranged within a matter of days or weeks, and many disputes are resolved in a single session. The informal, streamlined nature of the process keeps overhead low. Costs usually consist of:

• The mediator’s fee (often split between the parties)
• Minimal preparation or advisory fees from legal representatives

Because the process is voluntary and collaborative, parties retain full control over the outcome. No agreement is binding unless both sides sign off. This flexibility allows parties to explore creative solutions that may go beyond what a court or arbitrator could impose — for example, adjusting payment schedules, altering service obligations, or even agreeing on joint future projects to offset losses.

Scenario:

A small business faces a service dispute with a long-standing supplier. Rather than escalating to court or arbitration, a mediation session is scheduled and successfully concludes in a day. Both parties agree on a partial refund, adjusted future terms, and a continuation of the business relationship — saving time, money, and goodwill.

Arbitration - Structure, Finality, and Enforceability

Arbitration involves greater time and cost commitments than mediation, but it offers benefits that mediation cannot. Even streamlined arbitrations require procedural steps, including:

• Exchange of submissions and supporting documents
• Procedural meetings and scheduling
• Potential hearings with witness testimony and expert input

While arbitration is faster than traditional litigation, it can still span weeks or months, depending on complexity. Costs are higher because they may include:

• Arbitrator fees (often hourly or daily)
• Attorneys’ fees for preparation and advocacy
• Expert witness fees, if technical evidence is required

The trade-off is certainty and enforceability. Once the arbitrator delivers an award, it is legally binding and enforceable, often with limited or no scope for appeal. This makes arbitration the preferred route for high-value, technically complex, or high-stakes disputes, where finality is non-negotiable.

Scenario:

A major construction dispute arises over project delays and damages worth millions of rands. The parties opt for arbitration because the decision needs to be binding and enforceable. Although the process takes several months and involves expert evidence, the final award provides clarity, closure, and the ability to enforce the decision without further litigation.

Balancing the Trade-Offs

The trade-offs are clear:

• Mediation prioritises speed, cost savings, and control.
• Arbitration prioritises certainty, structure, and enforceability.

Choosing the wrong approach can waste resources or lead to results that fail to protect your interests. Evaluating the nature of the dispute, the financial and relational stakes, and the need for finality upfront allows parties to manage expectations and commit to the process most likely to achieve a sustainable resolution.

Choosing the Right Process for Your Dispute

No two disputes are identical. The right alternative dispute resolution (ADR) method depends on the type of dispute, the stakes involved, the relationship between the parties, and the outcome you need. Making the correct choice early can save significant time, money, and stress, while the wrong choice can lead to delays or outcomes that fail to meet your objectives.

When Mediation Is the Strategic Choice

Mediation works best when the goal is to preserve or repair relationships or where a flexible, interest-based solution is preferable to a strict win-or-lose outcome.

• Commercial disputes with ongoing partnerships – For example, two businesses in a supply chain may opt for mediation to resolve payment or delivery issues without destroying their ability to work together.
• Family, community, or workplace matters – Mediation allows parties to address sensitive issues in a private, controlled environment, avoiding the hostility and exposure of public proceedings.
• Low- to mid-value disputes – Where legal costs could easily outweigh the amount in dispute, mediation’s efficiency makes it the smarter first step.

Mediation allows parties to craft tailored solutions that a court or arbitrator could not impose — such as phased payments, revised contract terms, or mutual commitments for future cooperation.

When Arbitration Is the Smarter Route

Arbitration is the preferred process when certainty, enforceability, and finality are paramount.

• High-value or complex commercial disputes – For example, engineering or construction projects where delays or defects could result in millions in claims.
• Disputes requiring technical expertise – Arbitrators with industry knowledge can understand complex evidence more efficiently than a general court.
• Matters where contracts require binding decisions – Many agreements contain arbitration clauses precisely to avoid the delays and unpredictability of court litigation.

Arbitration provides structured resolution that results in a binding award. While it may be more expensive and take longer than mediation, the enforceability of the decision often justifies the investment — especially when large financial or reputational stakes are involved.

Why Early Legal Guidance Matters

Selecting the wrong process can have significant consequences. Mediation may fail if the other party refuses to cooperate, wasting time before arbitration or litigation becomes inevitable. Arbitration, on the other hand, can become unnecessarily expensive if the matter could have been resolved more efficiently through mediation.

Early consultation with experienced legal counsel ensures that:

• The correct process is chosen based on the dispute’s facts and strategic needs
• Time and costs are managed proactively
• Your legal position, finances, and reputation are protected throughout

At its core, the right ADR process is one that balances efficiency, enforceability, and the relationships involved, aligning with both your short-term needs and long-term interests.

VDM Attorneys – Alternative Dispute Resolution Lawyers in Sandton

The outcome of a legal dispute often depends on choosing the right resolution process. At VDM Attorneys, we provide clear guidance on when to mediate, when to arbitrate, and how to secure an outcome that protects your interests.

For decisive, strategic ADR advice, contact VDM Attorneys.