Which statement about mediation in dispute resolution is true?

Mediation is a process used in dispute resolution where a neutral third party, known as a mediator, assists the involved parties in reaching a mutually satisfactory agreement. One of the key characteristics of mediation is its flexibility and informal nature, which allows for participation and input from all parties involved.

The statement that mediation occurs before arbitration reflects the typical sequence in alternative dispute resolution (ADR) processes. Often, parties will attempt mediation as a first step to resolve their disputes before resorting to arbitration, which is a more formal method of conflict resolution that may result in a binding decision. By engaging in mediation first, parties have the opportunity to collaboratively address their issues, which can potentially lead to a resolution without the need for arbitration.

Mediation can indeed involve multiple parties and does not necessarily require the creation of binding agreements before the process begins, highlighting its adaptable structure. However, it is important to understand that mediation itself is not legally binding unless the parties voluntarily decide to formalize their resolution afterward. This allows mediation to serve as an essential preliminary step in the dispute resolution continuum, providing a space for discussion that can ideally prevent further legal escalation.