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 delays, costs, 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
☑️ International trade deals
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
“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
☑️ No third-party neutral
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 costly and 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: It is 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.