Although both of these processes are alternatives to litigation, they are very different in method. In arbitration, the parties agree to be bound by the decision of the arbitrator and the arbitrator is required to make a decision. In mediation, the parties make the decision by reaching a legally enforceable agreement with each other, which is facilitated by the mediator. Arbitration is also generally a much more formal process than mediation, which offers maximum flexibility to enable the parties to reach an agreement.