Alternative dispute resolution (ADR) refers to ways of resolving conflicts, other than traditional Court processes or litigation. Three methods of ADR include:
Negotiation is a process where two parties in a conflict or disagreement try to reach a resolution together. During a negotiation, the parties or their representatives (lawyers) discuss the issues to come to a resolution.
Before a negotiation, each party should consult a lawyer. Consulting a lawyer allows each party to be well aware of their rights and duties for the matter they want to resolve.
Mediation is a process where a neutral person assists the parties in discussing the matter and reaching a resolution.
A neutral person is a person who does not support either party in the conflict. This person is called the mediator, and they help the parties communicate. A mediator ensures that communication between the parties is fair and honest. The mediator is not a judge or an arbitrator and cannot take the side of either party, give legal advice, or provide counselling. Mediators can assist by clarifying issues, identifying concerns, and helping parties understand each other’s interests. The mediator can assist the parties in reaching an agreement between them but will not force the parties into a solution during mediation.
Mediation takes place in private and the decisions made are private. Mediation can take place in person where parties meet face-to-face for discussions. Or, the parties may be placed at separate locations where the mediator communicates information between parties.
After mediation, the parties can sign a Memorandum of Agreement (MOA). A MOA is a cooperative agreement written between the parties to obey the agreed terms and conditions. The mediator writes the MOA which outlines details of the solutions reached by the parties. The purpose of the MOA is to have a written understanding of the agreement between the parties. Each party should have their lawyer review the MOA.
Arbitration is a process where a neutral third party makes a decision. The decision-makers in arbitration are called arbitrators. There can be one arbitrator or multiple.
The arbitrator will arrange a meeting between the parties to determine what issues need to be resolved during the arbitration. Each arbitrator hears the parties present their case and their supporting evidence. The arbitrators may also request each party to provide their case and supporting evidence in writing (called, written submissions).
After hearing both parties’ sides of the story, the arbitrator will make a decision (in the same way as a Judge would in court). Arbitral decisions are sometimes called Awards. Arbitral awards are generally final and compulsory. An award may be filed in court and enforced as if it were a court judgment. It can often take a long time to receive an arbitration award.
Arbitration is commonly in commercial disputes, consumer and employment matters, family disputes, or insurance claim disputes.
Arbitration has many advantages over court hearings and litigation. For example, arbitration can be faster, more flexible, and less argumentative, intimidating, and expensive.
Negotiation and mediation are less expensive and less time consuming than a traditional Court proceeding. Arbitration can also be cheaper than Court proceedings; however, it depends on the cost of the arbitrators.