What distinguishes mediation from arbitration?

Mediation is distinguished from arbitration primarily by the nature of the processes involved. In mediation, the parties engage in facilitated negotiation, where a neutral third party, the mediator, helps them communicate and work toward a mutually acceptable solution. The key aspect of mediation is that it does not result in a binding decision; instead, any agreement reached is voluntary and requires the consent of both parties.

In contrast, arbitration is a more formal process in which an arbitrator hears evidence and makes a binding decision for the parties involved. This process is often akin to a trial, but it takes place outside the court system. The binding nature of the outcome in arbitration means that parties are legally obligated to adhere to the arbitrator’s decision, making it a more definitive resolution of the dispute.

While other options may present certain characteristics of mediation and arbitration, they do not accurately capture this fundamental distinction regarding the binding nature of decisions in arbitration versus the voluntary agreements in mediation. This understanding is crucial in legal contexts when advising clients on dispute resolution options.