What Are the 4 Types of ADR? Compare Methods, Pros and Cons

Posted by Kompass Professional Development on Jan 18, 2021 10:40:56 AM
Kompass Professional Development

The primary goal of alternative dispute resolution (ADR)  is to settle disputes without litigation.

Going to court often involves a long and arduous process—and doesn’t always produce a beneficial result. 

This is precisely what ADR is designed to avoid: the time delayscosts, anxiety, and sometimes disappointing outcomes of litigation. 

ADR is used to settle disputes in a wide range of practice areas, including:

☑️ Family matters 

☑️ Commercial contracts 

☑️ Workplace disputes 

☑️ Labour relations 

☑️ Business and consumer disputes 

☑️ Intellectual property 

☑️ Sports 

☑️ Construction 

☑️ International trade deals 

☑️ Torts 

There are four main types of ADR. Many alternative dispute resolution professionals build skills across all four modalities, so they can choose or combine approaches to suit clients' needs.

In this post, we'll guide you through each ADR type, including common pros and cons of each model. 

ADR type #1: 

Negotiation involves only the parties. The outcome of a negotiation is reached by the parties together without recourse to a third-party neutral.” (Government of Canada Department of Justice) 

Lack of a neutral third party is a key feature of negotiation. In this type of ADR, parties seek to resolve a dispute on their own, by discussing possible solutions and mutually agreeing on a final outcome.  

The process is totally voluntary and there is no “judge” or designated person who settles the dispute. 

However, parties may select a representative to negotiate on their behalf. The representative could be a family member, friend, lawyer, or ADR professional. 

Negotiation is quite informal. There are no defined “rules”. Parties decide for themselves how talks will proceed. 

Key features of negotiation

☑️ Voluntary 

☑️ Informal 

☑️ No third-party neutral 

☑️ Confidential 

☑️ Flexible 


Negotiation pros & cons 

Pro: Negotiation may preserve and in some cases even enhance the relationship between the parties 

Pro: The flexibility and informality of negotiation means parties can choose the procedures, time, place, topics, and participants  

Pro: Negotiation is less costly and time consuming than litigation 

Con: Absence of a third-party neutral can make it difficult for opposing parties to keep talks on track and reach an acceptable agreement 

Con: Power imbalances can quickly derail negotiations and diminish their value 

Con: The outcomes of negotiations are not legally binding, and rely completely on the good faith and trustworthiness of the parties involved 


ADR type #2: Mediation 

Mediation is similar to negotiation accept for this key difference: there is a neutral third party who oversees the mediation (known as the mediator). 

The mediator is an impartial facilitator. Their role is to help disputing parties reach a mutually beneficial resolution to the conflict at hand. 

The mediator does not decide the outcome. But they do guide negotiations, set ground rules, and help parties stay focused on reaching a settlement. 

Certified mediator and educator, Hayley MacPhail, describes the role this way: 

“Generally speaking, mediators set the stage for clients to do the work. They act as facilitators. Mediators work hard to read the room and put forth questions and observations that move the healing forward. 

This is a really challenging process. As mediators, we create a safe and supportive environment for clients to do the really hard work of moving away from conflict and hurt, toward resolution and peace.”   


Key features of mediation 

☑️ Requires a neutral third party  

☑️ Voluntary (although some mediations are court-appointed) 

☑️ Informal and flexible 

☑️ Not legally binding  


Mediation pros & cons 

Pro: Mediation can help preserve or improve the relationship between parties 

Pro: The mediator puts conflicts in perspective and keeps negotiations moving forward 

Pro: Mediation is more private and often less costland time consuming than litigation 

Con: Mediation is not legally binding, so it’s up to the parties to follow through on the settlement 

Con: Mediation does not always lead to settlement and parties may still end up in court 

Con: An inexperienced or unskilled mediator may allow bias to influence the process (which will undermine its success)


ADR type #3: Facilitation 

The terms "facilitation" and "mediation" are often used interchangeably, but there are clear differences between them. 

Facilitation often involves organizing people around a common goal— which is usually the completion of a task, not the resolution of a conflict. 

Award-winning ADR professional, Lucy Moore, explains: 

“A facilitator helps a group engage around a common goal. The focus is a task – develop a land use plan, learn about hazardous waste disposal options, improve service delivery for an agency – not the resolution of a conflict.

A typical facilitation requires guidance of a group (or members of the public) through education, discussion, and perhaps recommendations.” 


Lucy points out that mediators often us facilitation techniques, and facilitators sometimes draw on mediation techniques, when assisting clients. These two types of ADR go hand-in-hand. 

Key features of facilitation 

☑️ Used for groups 

☑️ Purpose it to help parties complete a task or make a joint decision 

☑️ Facilitator provides processes, tools, and techniques that can get work accomplished efficiently 

☑️ Conflict resolution isn’t the main goal, although the facilitator may be called upon to help settle disputes


Facilitation pros & cons 

Pro: Facilitation helps groups reach consensus and achieve key objectives 

Pro: Skilled facilitators provide structure and encourage equal participation 

Pro: Facilitators are trained to handle disputes should they arise 

Con: Groups can become too reliant on facilitators for decision-making 

Con: If the facilitator appears unneutral, groups may feel manipulated and lose faith in the process 

Con: Mismanaged facilitations can waste time and money and fail to reach the group’s goals 


ADR type #4: Arbitration 

Compared to all the other types of ADR, arbitration is typically the most formal. 

Like litigation, arbitration can involve hearings, witnesses, and evidence reviews. Also, in arbitration, the third-party neutral functions much like a judge. 

The arbitrator (or adjudicator) hears testimony and reviews evidence from both parties and renders a decision that is legally binding. 

Parties do not work together to find a solution. They rely on the arbitrator to reach a legally sound and fair decision. 

Key features of arbitration 

☑️ Similar to a trial but not quite as formal

☑️ Parties can choose the arbitrator and have input on the rules of procedure 

☑️ Decisions are legally binding 

☑️ Arbitration is confidential 


Arbitration pros & cons 

Pro: Provides a legally binding decision 

Pro: Includes features of litigation with added flexibility and customization

Pro: Confidential and typically less costly and time-consuming than going to court 

Con: Arbitration may unfairly benefit parties with greater resources (such as a company versus an employee) 

Con: Iis difficult to appeal an arbitration decision that is believed to be unfair 

Con: Arbitration is a win-lose process, compared to other types of ADR that seek a negotiated settlement that benefits both parties 


Interested in alternative dispute resolution training? 

Kompass Professional Development offers accredited dispute resolution training. 

Courses are delivered online and designed for:

☑️ People seeking to become certified ADR professionals

☑️ Those who want to strengthen their conflict resolution skills for family or workplace disputes

☑️ Companies seeking corporate dispute resolution training for employees, managers, and HR professionals

Click below to explore training options and chat live with an Admissions Advisor. 

Explore Online Dispute Resolution Training at Kompass


Topics: arbitration, mediation

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