What characterizes arbitration as a method of dispute resolution?

Arbitration is characterized as a method of dispute resolution primarily due to the involvement of a neutral third party who renders a decision on the dispute. This neutral third party, known as an arbitrator, is typically chosen by the parties involved or appointed by an arbitration organization. This aspect differentiates arbitration from other dispute resolution methods, such as mediation, where the mediator facilitates discussions but does not make a binding decision.

In the arbitration process, both parties present their cases, including evidence and arguments, before the arbitrator. After considering all the information, the arbitrator makes a decision, which is usually final and enforceable in court. This process is generally designed to be efficient and less formal than litigation, typically leading to quicker resolutions compared to court proceedings.

Other aspects of arbitration, such as whether the decision is always legally binding or the length and public nature of the process, can vary. In many instances, arbitration results in a binding decision, but it is not an absolute rule for all arbitration cases. The characterization of arbitration is focused on the role of the neutral third party, making that aspect crucial to understanding how arbitration functions as a method of dispute resolution.