Tired of long endless court proceedings? Why not opt for a quicker, less stressful and cheaper alternative? Alternative dispute resolution (“ADR”) refers to a process in which an impartial third party assists those in a dispute to resolve the issue at hand. The most common types of ADR are negotiation, mediation, conciliation and arbitration. The outcomes of these procedures are binding on the parties involved.

Negotiation refers to a process in which the parties communicate with each other directly to resolve an issue and what action should be taken to either manage or ultimately resolve the dispute between them. Negotiations may be used to resolve existing problems or prevent future disputes from arising. Negotiations are voluntary and no party is forced to participate in the negotiation process. The parties involved in this process are free to either accept or reject the outcome of the negotiations. Parties may choose to participate themselves in negotiations or choose to get someone to represent them. There are no prescribed rules in negotiation, therefore the parties may make their own rules. This procedure is the most flexible and the outcome of a negotiation only binds those parties that were involved in this procedure.

If the issue cannot be resolved through negotiation parties may then turn to mediation. Mediation refers to a process in which an independent third party, known as the mediator, assists parties in dispute to resolve their problems by identifying the issues, developing options and considering alternative measures in order for them to reach an agreement. The role of the mediator is to ensure the parties know the rules and guidelines of the mediation process, ensures each party has a chance to view their concerns as well as clarifying issues and suggesting ways of discussing the dispute. The mediator however may not take sides, make decisions or suggest a solution to the parties. Parties involved in mediation proceedings may seek legal advice regarding their rights and responsibilities prior to the mediation proceedings. Should a party’s legal representative be present at the proceedings, they should not play an active role.

Conciliation on the other hand allows an independent third party, known as a conciliator, to assist the parties in identifying the issues, develop options as well as considering other options in trying to reach an agreement. The conciliator may have professional expertise in a specific field and may therefore provide advice and options to resolve the dispute. However the conciliator may not make a judgment or decision regarding the dispute. Parties may have legal representation present at the conciliation however some conciliation proceedings do not require lawyers to participate. Conciliation is often an option if parties could not come to an agreement during the mediation proceedings.

Arbitration refers to the process in which parties present arguments and evidence to an independent third party, known as the arbitrator. A matter will often be referred to arbitration if the parties could not come to an agreement during the conciliation proceedings. Arbitration is useful if the issue at hand is rather technical, or if the parties seek confidentiality which cannot be obtained in an open court. Arbitrations are much more formal and structured compared to mediation or conciliation. Arbitration is similar to that of a court proceeding as the final decision made by the arbitrator is binding on the parties. However, the parties involved in the arbitration proceeding need to agree before the proceeding that the arbitrator’s decision will be binding and enforceable on them. Should the parties not be satisfied with the decision made by the arbitrator they are allowed to appeal the matter to a court or a higher authority. Parties may have legal representation at the arbitration proceeding.

As discussed above it is clear that people do have other cheaper and quicker options in resolving their issues should they opt not to use the traditional methods.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.