Arbitration and mediation are alternative dispute resolution (ADR) methods used to resolve conflicts outside of the courtroom.

Arbitration is a more formal process where an arbitrator—an independent third-party expert—reviews the case, listens to both parties, and makes a binding decision. This method is often faster and less costly than litigation, and the decision made by the arbitrator is enforceable in the same way as a court judgment.

Mediation, on the other hand, is a less formal and non-binding process in which a mediator facilitates negotiations between the parties in dispute. The mediator helps the parties explore possible solutions and reach a mutually acceptable agreement, but does not impose a decision.

Mediation is typically preferred when the goal is to preserve business relationships, as it encourages collaboration rather than confrontation.

Both arbitration and mediation offer quicker, more flexible, and less costly solutions to disputes than traditional court proceedings, making them highly effective for managing conflicts in construction projects, especially where ongoing business relationships are involved.