Both litigation and arbitration guarantee an outcome. Mediation doesn’t. Isn’t mediation just a tool to help resolve disputes? Albeit a good tool.
Perhaps because mediation doesn’t have to be mandatory, nor does arbitration. They also have, or can have, different rules than litigation, so in those respects they’re alternatives.
Mediation is perhaps the best example of dispute resolution. Where parties have a dispute, they are hopefully able to resolve that dispute by mutual agreement. Not only is that an alternative to the imposed resolution of a judge or arbitrator, but a more satisfactory and likely longer lived resolution. Admittedly, mediation does not guarantee a resolution, but it is an alternative method of resolving disputes.
Mediation has the great strength of offering an opportunity for the stakeholders to make their own decision with respect to the outcome. Arbitration and litigation guarantee a decision imposed by a third party which may well be unsatisfactory to both parties in the end at great expense of both money and time.
The time factor may be crucial as in the case of a child with special needs who is limbo while the adults hammer out positions they consider to be righteous in hearings and/or court. Or, important business goals are held hostage and opportunities lost while litigation drags on and on.
Mediation is a form of alternative dispute resolution, but it is in a class by itself because the stakeholders have a unique opportunity to decide for themselves.
Mediation is ideally initiated prior to attempting resolution through an adversarial process. However, sometimes disputes only become “ripe” for a mediated approach through an initial adversarial process.
Mediation is considered a form of ADR because it is a form of ADR. A powerful one. While no process can guarantee resolution, parties often choose mediation because it is more likely than most processes to lead to a satisfactory outcome.