A method of nonbinding dispute resolution involving a neutral third party who tries to help the disputing parties reach a mutually agreeable solution.

In Plain English:

Sometimes a case will be settled without going to trial or arbitration. Often, it is difficult for the attorneys for the plaintiff and defendant to reach a settlement agreement on their own. In those cases, they may hire a mediator to help resolve the case. The mediator is neutral, and during the mediation, works with both parties to find a solution and settlement amount that is acceptable to both sides.