Arbitration and Mediation are forms of alternative dispute resolution and are often relied upon in the legal process to resolve cases without the need and unnecessary expense for a formal trial.
Arbitration, is generally more formal than mediation, but most closely resembles that of trial; both parties are given an opportunity to explain their positions in front of the “judge” or Arbitrator, and attorneys can also question witnesses and present evidence. During arbitration, there are usually little if any out-of-court negotiations between parties. At the conclusion, the ruling by the Arbitrator is legally binding decision which both parties must honor.
Mediation, on the other hand, involves using a neutral third party to act as a guide or negotiator. A trained mediator agrees to hear both sides of a dispute objectively, but the main focus remains on the two parties as they work towards a mutually beneficial solution.