Negotiation, Mediation, and Arbitration

The topics in the Dial-A-Law series provide general information on a wide variety of legal issues
in the Province of Alberta. This service is provided by Calgary Legal Guidance funded in part by
the Alberta Law Foundation.

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:

 Negotiation
 Mediation
 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.