Negotiation, Mediation, and Arbitration


The topics in the Dial-A-Law series provide only general information on legal issues within the province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation. The purpose is to make you aware of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.

This topic will discuss three alternative dispute resolutions. Alternative dispute resolution refers to methods of resolving disputes or conflict other than traditional litigation or the Court process. The three methods are:

  1. Negotiation
  2. Mediation
  3. Arbitration

Negotiation is a process where two parties in a conflict or dispute (fight) reach a settlement between themselves that they can both agree on. Negotiations are reached through discussions made between the parties or their representatives without an involvement of the third party. Each party should consult or see a lawyer before settling down the matter, so that they are well aware of their rights and duties in respect to the matter or dispute they are willing to solve.

Mediation means the process in which a neutral (means not supporting any one side) third party assists the parties in conflict to reach a solution. The third party is called the mediator and the mediator facilitates communication between the parties. The mediator manages communication process between the parties fairly, honestly and impartially. The mediators do not take sides, give legal advice or provide counseling. They do not act as Judge or arbitrator. They assist by clarifying the issues in dispute and identifying the underlying concerns. They assist in each party to understand the other party’s interests. Mediators sometimes have the parties meet face to face. Other times, a mediator may shuttle back and forth between parties in separate locations. They also assist in the searching of a resolution (a formal expression of opinion or intention made) to the problem but will not impose a solution.

Mediation takes place in private and the decisions reached are private. A Memorandum of Agreement MOA is a cooperative agreement or a document written between the parties to cooperate on the agreed terms and conditions. The basic purpose of MOA is to have a written understanding of the agreement between the parties. is written up by the Mediator outlining the details of the solutions reached by the parties. The parties should have their respective legal counsel (legal counsel is the person representing the party to the dispute) review the Memorandum of Agreement. Each party is encouraged to consult with their lawyers before mediation so that they know their legal rights.

Negotiation and Mediation is less expensive and less time consuming than the Court action. An agreement is encouraged but the parties are free to pursue other processes if they cannot reach an agreement.

Arbitration refers to the process where the decision is made by a third party. The arbitrator hears the case as presented by the parties in conflict or dispute (fight) and makes a decision or award in the same way as a Judge would. Awards are generally final and binding on all parties. An award may be filed in Court and enforced as if it were a Court judgment. Arbitration is commonly used in labour disputes and commercial disputes. It is also used in oil and gas disputes, insurance claim disputes and family and divorce disputes.

The arbitrator arranges a meeting between the parties to determine what issues need to be resolved. The arbitrator then holds a hearing into the matter where both sides present information and evidence they believe supports their case. The arbitrator may also request written submissions before and/or after the hearing. Once the arbitrator has all the evidence, the arbitrator considers the matter and issues a decision that is binding upon the parties. It can often take a significant amount of time to receive an arbitration decision.