When the parties decide, they have reached a negotiated settlement. When a third party decides, they have adjudicated. A third, hybrid approach is to have a third party advise the parties what to do. The primary difference between mediation and arbitration is that arbitration is generally binding, while mediation is non-binding. Any dispute can be mediated.
Mediation is a natural process used by people in everyday situations.
A mediator's professional reputation is extremely important to the process. After years of traditional adversarial litigation, more attorneys are realizing that the available legal remedies are often limiting and that the system is often unresponsive and too costly. Many attorneys are concerned that these flaws will effectively deny clients the benefits to which they are due. As a practical solution, counsel must use their knowledge and expertise more creatively. Today's trial attorney must be at the core a problem solver.