Paralegal Advanced Competency Exam (PACE) Practice Exam 2025 - Free PACE Practice Questions and Study Guide

The type of dispute resolution that involves an impartial third party is arbitration. In arbitration, a neutral arbitrator is selected by the parties or appointed through an agreement. The arbitrator listens to the evidence presented by both sides and makes a binding decision to resolve the dispute. This process is often quicker and less formal than litigation, and it provides a definite resolution that the parties must adhere to.

Mediation also involves an impartial third party, but the mediator's role is to facilitate communication and negotiation between the parties to help them reach a mutually acceptable agreement. Unlike arbitration, the mediator does not make a binding decision, which distinguishes these two types of dispute resolution.

Litigation involves formal court procedures and is adjudicated by a judge or jury, rather than a third-party facilitator. Negotiation is a direct discussion between parties to resolve a dispute without the involvement of third parties.