Michigan Residential Builders License Practice Test

What are the three common methods used for alternative dispute resolution?

1. Litigation, mediation, arbitration

2. Mediation, arbitration, facilitation

3. Facilitation, negotiation, litigation

4. Conciliation, mediation, arbitration

The correct answer is: Mediation, arbitration, facilitation

The three common methods used for alternative dispute resolution include mediation, arbitration, and facilitation. Mediation is a process where a neutral third party, the mediator, helps disputing parties communicate and negotiate an agreement, aiming for a resolution that satisfies both sides. It is a collaborative approach that emphasizes finding common ground and facilitating dialogue. Arbitration involves a neutral third party, known as an arbitrator, who listens to both sides and makes a binding decision on the dispute. This method is more formal than mediation and often resembles a court proceeding, though it typically provides a quicker and less costly resolution. Facilitation is similar to mediation, where a facilitator helps parties in conflict communicate more effectively and work through their issues, but it may not always lead to a binding agreement. The facilitator does not impose solutions but rather assists in the discussion process. While litigation refers to taking disputes to court and is thus not considered an alternative, options like conciliation and negotiation also serve as methods for resolving disputes but may not be categorized as prevalently as mediation, arbitration, and facilitation in standard practices of alternative dispute resolution.