Mediation of compensation for traffic accident damage mainly refers to the activity that the traffic administrative department of the public security organ, according to the application of the parties concerned, convenes relevant personnel after ascertaining the facts and causes of traffic accidents, distinguishing the responsibilities of the parties involved in traffic accidents and determining the losses caused by traffic accidents, and conducts fair consultation on traffic accident damage on a voluntary and legal basis to solve compensation disputes. After the mediation is reached, both parties sign a mediation agreement. So what is the legal effect of the conciliation statement? 1. The mediation agreement is binding on both parties. According to the law, the conciliation statement shall come into effect after being signed or sealed by both parties, and shall be binding on both parties, and the parties shall perform it. In nature, the mediation agreement is reached voluntarily by both parties, and it is the result of consensus reached by both parties, which has the effect of contract. At the same time, it is a mediation agreement reached under the auspices of the public security traffic control department. Therefore, the mediation agreement is legally binding on the parties, and unless the parties have legitimate reasons, they can't go back on their words or fail to perform the mediation agreement, thus strengthening the awareness of performance of both parties and maintaining the seriousness of the mediation agreement. 2. The mediation agreement has the effect of legal evidence. Mediation is an important evidence for the people's court to handle the disputed cases in traffic accident compensation. If there is no other evidence to prove that the mediation agreement is invalid or revocable, it shall serve as the basis for the judgment of the people's court.