It is to be distinguished from interest arbitration. Interest arbitration refers to a process for resolving what the terms of a contract will be. Interest arbitration is therefore a means of breaking a deadlock in contract negotiations. For a checklist of considerations in drafting an arbitration clause, click HERE . For a comparison between litigation and arbitration, click HERE .
Mediation is a process for resolving disputes with the aid of a neutral.
The neutral's role involves assisting parties, privately and collectively, to identify the issues in dispute and to develop proposals to resolve the disputes. Mediation may be compulsory, under the terms of laws or court rules, or may be voluntary, by agreement of the parties. Some jurisdiction have rules requiring mediation of disputes at some point in the litigation process. Voluntary arbitration may be undertaken under terms of a mediation clause by which parties to an agreement agree in advance to submit any disputes to mediation. Such mediation clauses are common in agreements in which the parties seek to resolve their disputes in a manner which avoids hostility and preserves an ongoing relationship.