What is the definition of 'arbitration' in dispute resolution?

Arbitration is defined as a process in which a neutral third party, known as an arbitrator, is appointed to make a binding decision on the dispute. This process is often chosen by parties as an alternative to going to court, and it provides a way for disputes to be resolved outside of the traditional litigation process. The key characteristic of arbitration is that the decision made by the arbitrator is generally final and enforceable, meaning that the parties involved must adhere to the ruling.

This differs significantly from other forms of dispute resolution. For example, voluntary negotiation between parties does not involve an external decision-maker and relies on the parties reaching an agreement themselves. Informal mediation between friends or family typically emphasizes reconciliation and understanding rather than a binding resolution. A public court hearing pertains to formal litigation processes governed by court rules, rather than the private nature of arbitration. Thus, the defining feature of arbitration as involving a neutral third party who makes a binding decision distinctly sets it apart from these other methods.