MEDIATION is negotiation assisted by a third party who facilitates the disputants' agreement on a solution to their conflict. The success of this approach depends more on the neutral's ability to communicate and influence than to decide, but on-the-spot analysis of rapidly evolving situations and deciding on appropriate ways to proceed are critical. Research into labor mediation has identified two strategies. In "deal-making," the mediator figures out what settlement is mutually acceptable to the parties and then manipulates them into adopting it. In "orchestration," the mediator enables the parties themselves to discover a settlement that meets their mutual needs (1). The latter approach is more likely to result in settlements that are in the best interests of both parties and is thought to make them less dependent on future third-party intervention than the former. Mediation is commonly used in labor, environmental, community, school, family and divorce, and international disputes, often to keep them from escalating to the more costly rights or power procedures.
FACTFINDING is a quasi-judicial process in which the neutral conducts an evidentiary hearing and issues a report. Factfinders have the authority to decide the facts of a dispute and may also have the authority to make recommendations for resolution, in which case, the procedure may be termed "advisory arbitration." Typically, if the parties do not accept the factfinder's recommendation, the report is made public. Resolution is theoretically facilitated by the rationalization of the dispute in the first place (determination of the facts and rejection of meritless argument), and by the pressure of public opinion in the second place.
ARBITRATION is also a quasi-judicial process. It differs from factfinding in that arbitrators issue decisions which, by prior mutual agreement of the parties, are final and binding. It differs from court proceedings in its simplicity and informality which produces results faster and at less cost. The arbitrator's authority flows from and is therefore constrained by the arbitration agreement, which may be a simple ad hoc verbal agreement to let a third party make the decision or a more complex one contained in a written contract that also sets forth the rights that are in dispute. Arbitration is widely used in labor and commercial disputes in the United States, but also in less formal settings, such as the family when children take a quarrel to a parent for resolution.
I have written about these as if they were discrete mechanisms. In the labor arena, one tends to be either a mediator (usually employed by the government) or an arbitrator (in private practice) because the interpersonal skills required and short-term goals (agreement vs. equity) are different. Many factfinders and arbitrators do attempt mediation at times, although this is a matter of some disagreement in the profession. Neutrals who consider themselves advocates of the long-term relationship between the parties favor bargained agreements. If they are also comfortable with the mediation process, they will look for opportunities to mediate even though they enter the dispute with greater decision-making authority. This is particularly true for factfinders.
QUALIFICATIONS: The essential qualification, especially for mediators who depend on personal power rather than authority, is acceptability to all parties of the dispute. Once one party loses confidence in the mediator, the neutral's usefulness is over. Arbitrators and factfinders, who are normally mutually selected by the parties, also need acceptance. Otherwise they would not be chosen. Even when they are appointed, acceptability is a critical factor for the parties' commitment to decision. Hence, third-party neutrals tend to guard carefully the reality and image of impartiality, the reputation for which takes a long time build since it is created by the parties' own experiences with the neutral.
(1)Kolb, D. M. (1983). _The mediators_. Cambridge, MA: MIT Press.