There is some confusion as to the difference between arbitration and medication. Mediation involves an impartial third party who assists the parties to voluntarily settle their differences. For several reasons, mediation is usually preferred over litigation or arbitration as the dispute resolution method of choice. In mediation the parties decide themselves how to resolve their dispute by talking out their differences, with the mediator helping get them past their positions so that the parties real interests can be addressed. Legal rules are relevant, but not dispositive and are but one of many factors to consider along with feelings and the importance of a continued relationship between the parties.
Mediation is a consensual process that bears no relationship to litigation or arbitration.
The mediator has no real power to resolve a dispute, which can only be resolved through a consensual process. Mediation can be used to help avoid costly litigation and is an option that should be explored early in the dispute. It is particularly useful in commercial disputes involving complex business issues. Mediation enables parties to exert control to resolve their differences in an informal, confidential collaborative problem-solving atmosphere with the opportunity to focus and resolve the real causes of the conflict. Arbitration involves a determination by a neutral arbitrator to ascertain who is right and who is wrong.