Which term describes a situation where a third party determines a binding settlement to a dispute?

The term that describes a situation where a third party determines a binding settlement to a dispute is arbitration. In arbitration, the involved parties present their case to an independent arbitrator or a panel, who then makes a decision that is typically final and enforceable by law. This process is often preferred as it offers a quicker and more efficient resolution than traditional court proceedings.

The role of the arbitrator is crucial, as they not only facilitate the discussion but also assess the evidence and arguments from both sides before issuing a decision. This binding nature distinguishes arbitration from other forms of dispute resolution.

Mediation involves a third party who helps facilitate a conversation between the disputing parties to reach a mutually satisfactory agreement, but the mediator does not make a binding decision. Facilitation is generally focused on guiding a group through a discussion process to improve communication and decision-making without binding authority. Negotiation refers to the direct dialogue between parties to reach an agreement without necessarily involving a third party or formal structure. Thus, the distinct process and binding nature of arbitration make it the correct term in this context.