ADR in Alberta: How negotiation, mediation, and arbitration work

There are many alternatives to going to court to resolve legal conflicts. Alternative dispute resolution (ADR) can be faster and cheaper than litigation for individuals and organizations.

There are four methods of resolving disputes:

• Negotiation
• Mediation
• Arbitration
• Court Litigation.

Parties can use individual methods or combine them as needed. For example, negotiation and mediation are often used to resolve disputes that are already in Court litigation.

Each method offers parties varying degrees of input and control over the process and outcome. With knowledge of the benefits and drawbacks of each method, parties in conflict can choose the appropriate method depending on the dispute, the parties involved, and the relationship between them.

Negotiation

Parties in a dispute can voluntarily meet and discuss their problem to resolve it together. Strategic preparation and techniques unique to effective negotiation are keys to success. Often, the parties can devise a solution that satisfies both their interests and needs.

Mediation

If the parties can’t negotiate a solution themselves, they often seek a third party to help them resolve their dispute. This third party is an impartial mediator who will use particular skills and techniques to assist the parties in arriving at a resolution. Mediators have different styles and approaches, and parties will often have input and control over the selection of the mediator and process to be followed.

Mediation can be used to resolve almost all types of conflict, including disagreements over contracts, insurance claims, between businesses, employment issues and some types of family disputes.

Mediators have the freedom to develop creative solutions that courts cannot apply to disputes, as their powers are not limited by law. Mediators can be imaginative and devise resolutions that will work as long as both parties agree to accept them.

Arbitration

Arbitration is an agreement between the parties to have a neutral person or panel of such decide the issues for them, much like a judge. Usually parties agree to arbitration in advance of a dispute by way of specific language in a contract. However, parties can also agree to arbitration after a dispute arises.

Arbitration allows a neutral person or panel to hear the facts of the dispute and decide how to resolve the dispute. Often, arbitrators are experts in the specific legal area, business, or industry in which the dispute is based.

The parties usually agree on an arbitrator together. If they cannot agree on the choice of arbitrator, they will usually have three choices:

• have a third party acceptable to both parties select the arbitrator
• apply to a court for a judge to select the arbitrator
• create a three-person arbitration panel, where each party picks one arbitrator and the two arbitrators then pick the third arbitrator

Some parties prefer that a panel of arbitrators hear their dispute, especially if the dispute is complicated or significant.

The parties generally agree in advance on the rules the arbitration follows. They can decide to present the dispute through written submissions and documents alone and dispense with witnesses. After both parties’ positions are presented, the arbitrator or panel decides based on the facts of the dispute and the applicable laws.

The decision must be in writing and explain the reasons for the decision. The arbitrators can:

• order specific actions be taken by the parties
• issue an injunction to prevent the parties from doing something
• make monetary awards

Arbitrators’ decisions are binding, and can be converted into formal court judgments if necessary.

Anyone seeking to resolve a dispute through ADR should contact lawyers who have ADR experience. They can assist interested parties to select the form of ADR that is most likely to help them resolve their dispute.

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