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A voluntary method of dispute resolution. The primary distinction between arbitration and mediation is that mediation is not binding on the parties. If a satisfactory resolution cannot be reached, the parties can pursue a lawsuit. Mediation is a non-adversarial process where a neutral person (a mediator) meets with disputing persons to help them settle the dispute. The mediator, however, does not have the power to impose a solution on the parties.

In a mediation conference, an impartial third party presides over the conference and attempts to help the parties reach an agreement. This may be done in a variety of ways; but the objective is to identify areas of common ground and to present viable options to resolve those areas of genuine dispute. A mediation conference is much less structured than an arbitration proceeding. Labor union negotiators traditionally have turned to mediation when they were unable to reach a compromise.

Mediation is often used to help a divorcing or divorced couple work out their differences concerning alimony, child support, custody, visitation and division of property. A mediator sometimes makes recommendations but never makes decisions. Therefore, unsuccessful mediation participants are free to proceed through the judicial processes if they choose to do so.