Which of the following is a characteristic of arbitration?

Arbitration is a form of alternative dispute resolution where disputes are settled by an independent third party, often referred to as an arbitrator, who acts similarly to a judge. The arbitrator listens to both parties, reviews the evidence presented, and then makes a decision that is typically binding. This characteristic distinguishes arbitration from processes like mediation, where a neutral party helps facilitate negotiation but does not make a binding decision.

The binding nature of arbitration often leads parties to agree to it in advance, typically through a clause in a contract. While this process is structured and can resemble a legal proceeding, with rules of evidence and procedure being applied, it is important to note that the arbitrator’s decision can usually be enforced in the courts, giving it significant weight.

The other choices do not accurately capture the essence of arbitration. For example, while negotiations may occur in various dispute resolution processes, arbitration itself is more formal and structured than simple informal discussions. Additionally, while arbitration can be non-binding in some contexts, the typical definition refers to the binding nature of decisions made by arbitrators. Thus, option C correctly highlights the defining feature of arbitration as involving the resolution of disputes by an independent third party who functions in a judicial capacity.