What is a key characteristic of arbitration?

Arbitration is a method of dispute resolution in which an impartial third party, known as an arbitrator, facilitates the resolution of a conflict between parties. This process is distinctly characterized by the arbitrator's role in evaluating the evidence presented and making a binding decision based on that evidence. The impartiality of the third party is crucial, as it ensures fairness and neutrality, providing both parties a sense of trust in the process.

In contrast, formal court hearings entail legal procedures that are much more structured and typically take place in a courtroom setting, which does not align with the nature of arbitration. Furthermore, mediation, while involving an impartial third party, differs fundamentally because the mediator does not make a binding decision; instead, they facilitate communication and negotiation between the parties. Informal discussions lack the structure and authority of arbitration and do not result in a formal resolution. Lastly, the idea of a unilateral decision is not characteristic of arbitration, as both parties present their cases and have a say in the proceedings prior to the arbitrator's ruling. Thus, the reliance on an impartial third party makes this choice a key characteristic of arbitration.