Parties to almost any contractual arrangement can agree to attempt mediation of their disputes. The mediator is selected by the parties and has no powers of settlement. Rather, the mediator brings process skills, industry knowledge, and the know how to keep people focused on the issues, and not the personalities. Mediation provides a great deal of process flexibility, and, indeed, requires the direct participation of the parties involved in a dispute in formulating and designing their own settlement, and for them to ultimately agree on a solution. Parties are not as restricted as to terms of settlement, and there is opportunity for some bargaining that would be denied in many other settlement formats.
Arbitration is another method that is often used in settling such claims disputes.
In binding arbitration, the arbitrator does have the power to make a ruling upon the parties, and to control the process from beginning to end, including the collection and presentation of evidence and proofs. Again, the power of arbitration derives from the agreement of the parties involved in the dispute to participate in the arbitration process, and to turn the decision-making over to an outside party. Despite the fact that arbitration is a much more restrictive process on the parties than is mediation, it still is less restrictive than civil litigation, where even the location of the hearings may be controlled by, or at least limited by the courts. Courts are crowded and time delays can add up quickly. In addition, American Arbitration Association is a non-profit organization, with offices in most major U. S. cities.