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What is the difference between mediation and arbitration?

Mediation and arbitration are both forms of dispute resolution, but they differ in many ways, especially when it comes to the role of the third-party facilitator. Both bring together the parties involved in a dispute to discuss their viewpoints and potential resolutions in a more casual environment than the courtroom. In mediation, parties are free to walk away at any time and they do not need to abide by any particular resolution. On the other hand, in arbitration, the arbitrator does have the authority to make a ruling and in many cases, the disputing parties must abide by that resolution.