Mediation is a conversational process, designed to resolve disputes, during which a neutral and impartial third party (the mediator) facilitates communication between parties which may enable the parties to reach a settlement of the dispute.

Mediation is recommended when the parties' emotions or positional bargaining have restricted their ability to negotiate with each other, but they do not want to hand over the decision-making authority to a judge or arbitrator. It can be considered the best method to use when parties want to preserve their relationship or end an existing relationship in the least adversarial way.

In mediation, the mediator, a neutral and impartial third party, facilitates communication between the parties in a private and confidential meeting. The mediator has no decision-making authority and can give legal information, but not legal advice. An experienced mediator can often help parties generate solutions which are not available through litigation or developed by parties in direct negotiation.

Mediation may be inappropriate if the case presents constitutional or precedent-setting issues for which a judicial opinion is desired. Because the process is based on voluntary disclosure, parties may be at risk if they are not knowledgeable of the facts of the case. Mediation may not be successful if the mediator's qualifications, attitude or style, are inconsistent with the needs of the parties.

To address these issues, parties in mediation should be represented by attorneys who can educate them about the process and advise them of their legal rights as well as the probability of success should the case go to trial. Attorneys may attend the mediation sessions with their clients. The parties must understand that a mediator can help them create solutions, but it is the parties themselves who ultimately share responsibility for the outcome of the mediation process.

Mediation is confidential, which means that nothing that is said during the proceedings can be disclosed by the mediator to anyone, nor used in court should the dispute go to trial.

Mediation is an efficient and cost effective method for resolving both simple and complex cases. It is a precess which increases both the likelihood and the quality of the settlement.

Arbitration is a method of dispute resolution that utilizes a neutral party who hears testimony, views evidence, listens to arguments and renders a decision. Some people say it is much like a trial without a jury. While it is similar, arbitration is less formal and the rules that govern evidence can be less strict.

Arbitration can be binding or non-bonding. If it is binding, the parties must accept the decision of the arbitrator and the decision cannot be appealed except under very special circumstances.

Non-binding arbitration does not require the parties to accept the decision, and they can enter the court system for a final determination.

Panel arbitration involves a panel of three arbitrators who hear the evidence, listen to arguments, and render a decision. This panel is usually made up of one arbitrator chosen by each party. These two arbitrators then select the third arbitrator to complete the panel. A presiding arbitrator is selected and that person conducts the hearing. Panel arbitration is a feature of many contracts which require binding arbitration.

Kentucky has adopted the Uniform Arbitration Act. This statute states that an agreement to arbitrate in writing is generally valid and enforceable. The Kentucky law provides for the right to be represented by an attorney and for cross examination at the hearing.

There are different rules for arbitration. Some states, including Kentucky, have rules set by the legislature. There is also a Federal Arbitration Act. Rules are also created by other organizations, such as the American Arbitration Association, or by contracts of the parties involved. These rules provide for such things as requirements for disclosure of witnesses and evidence before the hearing, hearing procedure, the form of the decision, and the time limit within which the arbitrator must make a decision.

Another variation in the arbitration process is High Low arbitration. This type is most often used in personal injury cases. The parties agree on a high and low award. The arbitrator is not told these numbers. If the arbitrator finds for the claimant and decides on an amount between these values, the claimant gets that amount. If it is above the high amount, the claimant gets paid the high. If it is below the low amount, the claimant gets the low value.