Which ADR mechanism yields a binding decision by a neutral third party?

• A. Mediation
• B. Arbitration
• C. Pleadings
• D. Removal

Answer: (B)

Arbitation involves a neutral decision-maker who hears the dispute and issues a binding decision. In arbitration, an arbitrator or panel acts as a neutral third party and renders an award that the parties must follow, with limited options to challenge the decision in court. This makes arbitration a final, enforceable resolution outside ordinary court litigation. Mediation, by contrast, uses a neutral facilitator to help parties negotiate an agreement, but the mediator does not issue a binding ruling. Pleadings are the initial documents filed to start a lawsuit, not a dispute-resolution process, and removal is a procedural step to move a case to a different court. So, the mechanism that yields a binding decision by a neutral third party is arbitration.