At its core, mediation is a reconciliation tool that attempts to co-opt rather than coerce parties into a resolution, much unlike traditional methods of dispute resolution. As such, it focuses on skilled individuals with an understanding of conflict management, working within a specified structure to enable parties into entering voluntary and mutually agreeable terms. Its success is therefore grounded in a number of factors. 

Time and Cost Effective:

While disputes at mediation can often involve very serious issues, parties remain well aware of the costs of pursuing court proceedings as well as other forms of relief.  One of the key drivers behind the success of mediation is the knowledge that the interests of both parties can be reconciled without expensive, time consuming and stressful court proceedings. The mediation process is structured towards constantly emphasizing the risks involved in litigation, and therefore gently encouraging parties towards abandoning rigid positions and achieving a mutually beneficial compromise.

Voluntary and Confidential:

A basic willingness from both parties to come together in an attempt to resolve their disputes at a mutually agreed forum is sometimes the most important component of dispute resolution. Parties find comfort in the fact that they are in control of their dispute and not subject to the binding judgment of a third party. The fact that parties are also able to abandon the process and refuse the terms any time before agreement, paradoxically works in favor of the process, lending it more credibility. Participants are therefore able to let down their guards and engage in an open discussion.
Mediations are also strictly confidential. This allows parties to engage candidly, secure in the knowledge that matters discussed within mediation will not be divulged elsewhere without their express permission. The trust and confidence developed as a result of this naturally brings parties closer to a resolution.

A Structured Process:

Mediations take place under a structured process geared towards gradually moving parties away from entrenched positions and arriving at a solution. This process involves setting out the objectives and framework of the mediation from the very outset. This allows parties to understand what is required of them, set a correct environment, and manage expectations.
Parties are then engaged with on a private basis, allowing the mediator to get an understanding of the dispute and gently nudge them towards realizing the importance of resolution and therefore flexibility in their positions in order to achieve the same. 
Eventually, parties reach a point where they begin to understand that perhaps they are not “most right” in the issues in dispute, and that they will be required to give a little more and take a little less for the dispute to be fairly resolved. This realization, achieved through the structured process of a mediation, forms the basis of a resolution.
In pursuit of the resolution, mediation then encourages a creative and open-minded approach, seeking out of box solutions and encouraging parties to brainstorm and build ideas that could work favorably for either side. 

A Focus on Interests:

In the seminal text for mediation experts, Getting to Yes, Roger Fisher and William Ury underline the importance of interests. According to Fisher and Ury, the parties' interests define their dispute. This is a break from the conventional wisdom that stipulates parties’ “positions” as defining the dispute. An "interest" is a want. A "position" is one way to satisfy a want. By focusing on the parties’ interests, mediation makes the resolution of disputes possible by allowing both parties to achieve beneficial terms, as opposed to focusing on positions which usually means that only one or perhaps neither party may get what it needs. 

Skilled Mediator:

Mediators play a huge in the successful resolution of disputes. Mediators are trained with particular skills required to facilitate a reconciliation between two disputing parties. These skills include listening, enabling parties to talk openly about the situation with each other, and moving through the mediation process in a methodical manner, ensuring that parties remain focused and do not become side-tracked. Mediators also tend to have an instinctive awareness of the issues in dispute. This allows them to better facilitate discussions and understand the interests of both parties. 
Impartiality is also a factor in the success of a mediation, which allows them to win the trust and confidence of both parties, listen to either position and try to come to a common resolution.

Conclusion:

The factors listed above demonstrate just why mediation has become one of the most successful methods of Alternative Dispute Resolution and is being increasingly deployed by individuals, businesses and other organizations in order to achieve swift and cost-effective results. Currently in its infancy within the United Kingdom and other parts of the globe, mediation is poised to grow into one of the most commonly utilized forms of dispute resolution in the near future.