Which aspect characterizes arbitration in the ADR framework?

• A. A mandatory court trial with a jury.
• B. A simple mediation with no binding outcome.
• C. A self-resolution by the HOA board.
• D. A third party renders a decision about liabilities; can be binding or non-binding.

Answer: (D)

Arbitation in the ADR framework centers on a neutral third party who hears the dispute and issues a decision about liabilities. The key point is that this decision can be binding or non-binding, depending on the agreement between the parties. This distinguishes arbitration from a court trial, which involves formal litigation, and from mediation, where the mediator facilitates a settlement without imposing a decision. It also differs from self-resolution by the HOA board, which lacks a neutral decision-maker. The crucial takeaway is the presence of a neutral arbitrator delivering a decision that may be binding.