Dispute Resolution Reference Guide

Consider the Options: An Introduction to Dispute Resolution

“Attitudes must change and counsel must realize that suggesting ADR mediation or arbitration is not a sign of weakness but often a sign of strength.”

Chief Justice Roy McMurtry, Ontario Court, General Division quoted in “Law Times”, April 1 1 17,1994

“...modern legal education often produces lawyers trained in a confrontational spirit which undermines and ultimately ignores innovations aimed at the early settlement of disputes. The primary goal of winning the case often blinds lawyers to the financial and emotional cost to the client.”

John Sopinka, What Can We do to Make the Current System of Dispute Resolution Work Better? Canada-United States Law Journal, Volume 17,1991, pages 519-532.

“Introducing ADR "will not be a simple exercise, not least because it involves that hardest of tasks: bringing about attitudinal change. Success will depend on a firm awareness of the strengths and weaknesses of ADR, as well as a sophisticated grasp of how it should interact with our judicial system as a whole. We must make sure that cases that belong in courtrooms do not get pushed out into ADR simply because courts are over-burdened. Moreover, even in those instances when one is dealing with cases that do belong in ADR, great care will have to be taken to ensure that the manner in which ADR is fleshed out is consistent with the principles of fundamental justice that underlie our judicial system. But if ADR is handled carefully, then it holds the potential for substantial improvements to the manner in which justice is delivered in Canada.”

Chief Justice Brian Dickson (retired), Supreme Court of Canada, conclusion to a speech delivered at the Cornell Lectures, Cornell University, July, 1994.

“The volume of business in our courts and tribunals, the prohibitive cost of extended litigation and the delay in its disposition is shaking the public's confidence in our very system of justice. We cannot allow that to continue!”

The Honourable Allan Rock, Minister of Justice, speaking to the Canadian Bar Association Symposium Alternative Dispute Resolution in Action March 12, 1994, Vancouver, British Columbia

Consider the options: An Overview

There is a wide range of mechanisms available to settle disputes. We use the term “DR” to describe all possible ways of resolving conflict, from consensual to adjudicative, from negotiation to litigation. On the pages that follow you will find some basic information about the ones that are most likely to be used in Canada. The text begins with the mechanisms that give the parties in a dispute the most control over decision-making and solutions and ends with the mechanisms that put decision-making in the hands of a third party and leave the parties with little control over the solutions to their dispute.

We hope that the information that follows encourages you and your clients to seek out consensus-based approaches to dispute resolution when they are appropriate. We hope it encourages you to consider the options.

Dispute Prevention and Resolution Services encourages you to use us as an information resource. We would be pleased to talk to you about DR, put you in touch with colleagues with DR experience, recommend experts, refer you to the latest research and provide you with resource materials. You can get any of the materials listed here from us. You can reach the Dispute Prevention and Resolution Services at (613) 957-4643, or at dpr-prd@justice.gc.ca.

Introduction

Consensus-based dispute resolution can be a win-win solution

People can resolve a dispute in three main ways.

  • They can settle it themselves, talking together about their ideas on how to end the conflict between them.
  • They can ask a third party to help them find the best solution.
  • They can ask a third party to make a decision that is imposed on them.

The first two dispute resolution strategies give the people in a dispute the opportunity to work out their own solutions. The parties control the decision-making process and their agreement tends to reflect their needs and interests and to meet the specifics of their situations. This is consensus-based dispute resolution. It can be a “win-win” situation.

When parties ask a third party to make a decision for them for instance in binding arbitration and court adjudication they argue that they are “right” and that the other side is “wrong”.

This type of dispute resolution tends to entrench parties in their positions, increasing the conflict and the likelihood of continued animosity after a decision has been made. One party usually becomes the winner and the other party the loser. In the final analysis, this result may not serve any parties' interests effectively.

The best solutions are usually worked out by the parties.

There are many benefits to consensus-based DR options. They include:

  • speed - a case can be more quickly resolved if the parties do not have to wait for a trial date
  • choice - parties can select the people who will assist them in their negotiations (as in mediation), who will provide expert evaluations (in neutral fact-finding) or who will make decisions (in arbitration)
  • flexibility - many dispute resolution options allow the parties to define the procedures to follow and the parameters of issues to be discussed
  • informality - rules of procedure can be adapted to meet the needs of the parties in a particular situation
  • cost savings - many of the dispute resolution mechanisms offer the potential to save clients costs by reducing the time employees and lawyers work on the file and by eliminating the costs associated with a trial
  • durable outcomes - there may be better compliance and fewer new disputes between the parties after they have arrived at a consensus-based settlement
  • privacy - settlements reached outside the courtroom through several of the dispute resolution mechanisms can be kept confidential and are usually private, although the Access to Information Act and the Privacy Act may bring some government negotiations and settlements under public scrutiny
  • improved relations - parties often need to work together after a dispute is over - there is a better chance of a productive on-going relationship when all parties feel that the resolution of a dispute reflects their interests
  • greater satisfaction with the process - parties tend to feel more satisfied with the resolution of a conflict over which they have had some control

Some disputes are best left to the courts to decide.

However, there are some disputes which, if they cannot be settled through negotiations, are best taken to court. Here are some situations where court adjudication may be the most appropriate option.

  • the Government wants the case to set a precedent
  • a key element of a statute's interpretation is in dispute
  • an important question of Government policy is at issue
  • the Government requires a full public record of proceedings
  • the dispute involves a public law matter, such as the Charter or Constitution.

Dispute resolution mechanisms are not exclusive options.

Every conflict is unique. Lawyers can assist their clients by evaluating the strengths and weaknesses of a case to assess which DR mechanism can best serve their client's interests. Often, different DR mechanisms are appropriate at different stages of a dispute. For instance, if interest-based negotiations (see the definition ) are not successful, mediation may be the next option to consider. If mediation fails, arranging for a neutral fact-finder to assess the situation may work.

Here are some dispute resolution options for you to consider

  • I. Positional-based negotiations

    This is the traditional approach to negotiations. The focus is on power. This usually favours the more aggressive party and results in a solution that may not serve either party's interests in the long term.

    During negotiations, the parties, or their lawyers, try to find a way to resolve the dispute. The parties present their cases in positional terms based on rights, power and fault. Negotiations end when the parties cannot agree to a settlement or when all parties agree to accept a settlement, even though one party may not feel entirely satisfied with the results.

    When the process can occur

    At any time during the dispute.

    Client's role

    Generally, clients determine the extent to which they are involved in the negotiations. However, clients will often communicate through their lawyers. Clients supply technical information to support their position and decide if an offer made by the other side is an acceptable settlement of the dispute.

    Lawyer's role

    The lawyer advises the client on the legal issues in the dispute and the strengths and weaknesses of the client's position. The lawyer may negotiate on behalf of the client, bringing settlement offers to the client for review.

    potential advantages

    • Flexible process
    • Informal
    • Private
    • Both parties have to agree to the settlement
    • Parties control the process

    potential disadvantages

    • Requires a strategy to get parties who may be unwilling to talk to begin the negotiation process
    • Lack of structure may hamper process
    • Weaker party may feel pressured to settle
    • One side may not want to negotiate
    • Focuses on parties' positions and power
  • II. Interest-based negotiations

    This dispute resolution mechanism focuses on the parties' interests. It gives the parties the most control over the process and its outcome and is likely to result in party-specific, workable solutions.

    Negotiations focus on the needs and interests of the parties. The parties look for solutions that will satisfy everyone.

    When the process can occur

    Preferably at the earliest stage of a dispute, but may be used at any time during the dispute.

    Client's role

    The client is actively involved in the negotiations and works with the lawyer to ensure that the lawyer fully understands the client's interests in the dispute.

    Lawyer's role

    The lawyer may handle the negotiations. The lawyer advises the client on legal issues and on the strengths and weaknesses of the case.

    potential advantages

    • Focuses on interests, not on rights or power
    • Informal
    • Private
    • Solution has to be satisfactory to both sides
    • Parties control the process
    • Flexible process

    potential disadvantages

    • Requires parties to look beyond their own needs and entrenched positions
    • Lack of structure may hamper process
    • Parties may refuse to be open to creative solutions
    • One side may not want to negotiate
  • III. Mediation

    Mediation is most often associated with labour/ management conflicts and situations of family crisis. However, mediation can also be used to settle disputes between claimants and government. When both parties agree to ask a specific mediator to assist them, they are usually demonstrating a real interest in settling the dispute and recognizing that there is another way to resolve their conflict.

    Finding a mediator - With the exception of mediators who are certified through various organizations, mediators do not yet have a professional association that issues licences to members who adhere to a code of conduct and meet specific professional standards. To evaluate a mediator's skills, look at his or her education and training and speak to references about the mediator's past performance.

    Mediation

    A mediator is a neutral third party who assists parties in their negotiations. Mediators help parties to clarify the issues in dispute and to define the terms of an acceptable settlement.

    Before mediation begins, the parties define the role they want the mediator to have. The mediator can play a passive role - keeping discussions civil and on track - or can play an active role - helping parties to brainstorm to find solutions. The mediator cannot force the parties to accept a settlement.

    When the process can occur

    At any time during the dispute.

    Client's role

    In mediation, a client may communicate directly with the mediator and the other party or parties or may communicate with them through a lawyer.

    Lawyer's role

    The lawyer gives advice to the client about the legal issues involved in the dispute, can take an active role in negotiations and reviews any agreement reached with the other party.

    potential advantages

    • A mediator can get the sides talking when negotiations are stalled
    • Parties can talk together about solutions which can preserve their business relationship
    • Promotes creative solutions
    • Focuses on parties' interests
    • Parties control the process
    • Private

    potential disadvantages

    • A mediator cannot force a settlement so the parties should be open to reaching an agreement themselves
    • Even with a mediator to level the playing field, the more powerful and articulate party may be more successful
    • Requires parties to have an open mind about solutions
  • IV. Advisory opinions

    Advisory opinions can direct the parties towards a settlement. They can be useful when negotiation are stalled and a quick review by a neutral third party could get the parties talking again.

    Call Dispute Prevention and Resolution Services, at (613)957-4643, for a list of adjudicators available to meet the parties and provide an advisory opinion.

    Advisory opinions

    The parties choose a neutral third party with adjudication skills. The third party reviews the issues in dispute and gives the parties an opinion on the likely outcome of the dispute should it go to trial.

    The conclusions of the neutral third party are not binding on the parties.

    When the process can occur

    Early in the dispute.

    Client's role

    The client can present the case to the third party and respond to the case presented by the other party (or parties) or can assist a lawyer who presents the case.

    Lawyer's role

    With the agreement of the client, the lawyer can present the client's case to the third party. The lawyer advises the client about legal issues concerning a proposed settlement.

    potential advantages

    • A neutral third party's assessment may help a party to recognize the limitations of its case and prompt a settlement
    • The process has many of the advantages of a trial without the formality and delays
    • Private
    • Non-binding

    potential disadvantages

    • Parties may not take the advisory opinion seriously because it is not binding on them
    • Lack of structure may hamper the process
  • V. Early neutral evaluation

    The word “early“ in ”Early Neutral Evaluation” may be misleading. Sometimes, parties choose this option after having completed examinations for discovery and just before the trial date.

    The use of Early Neutral Evaluation in the United States

    Early Neutral Evaluation (ENE) programs are well established in several United States court systems. However, the purpose of ENE and the kinds of cases selected for it, vary from jurisdiction to jurisdiction.

    For instance, in the Northern District of California, the courts use ENE to promote early discussions between opposing parties (with their lawyers) to force them to recognize the strengths and weaknesses of their cases.

    In the Eastern District of California, certain categories of cases - for example, all property rights cases, all labour cases, all civil rights cases and certain contract and torts cases - are deemed suitable for ENE, but the actual cases assigned to ENE are chosen at random. The hope is that the cases assigned to ENE can be settled before trial.

    In Denver, Colorado, the court uses ENE for cases which involve multiple parties with cross-claims, complex legal issues or large sums of money and when pre-trial motions suggest that relations between the parties are strained.

    In Canada

    ENE is being used on a limited basis through private arrangements between the parties. It is not a court-ordered process.

    If you need to find a neutral evaluator, call the Dispute Prevention and Resolution Services, at (613) 957-4643, for a list of contacts.

    Early neutral evaluation

    The parties agree to meet with an expert in the subject matter of the dispute. During the meeting(s), the evaluator identifies the exact areas of disagreement, discusses the strengths and weaknesses of the parties' arguments and gives them an opinion on the likely outcome of the case in court. The meeting(s) and the evaluator's assessment are confidential.

    This is a non-binding process.

    When the process can occur

    Preferably as early in the dispute as possible, but may occur at any time.

    Client's role

    The client attends the meeting(s) and provides information that may be relevant to the evaluation. The client will review the neutral evaluator's assessment with its lawyer and consider possible terms of a settlement.

    Lawyer's role

    The lawyer summarizes the facts and legal arguments supporting the client's case. The lawyer can use the evaluator's assessment as a basis for working out a settlement.

    potential advantages

    • The evaluator's assessment may help a party to recognize the limitations of the case and prompt a settlement
    • Parties have nothing to lose and may save time and money
    • Provides an opportunity for the early resolution of the dispute
    • Private
    • Parties can benefit from expert opinion

    potential disadvantages

    • Parties may fail to take the evaluator's opinion seriously because it is not a binding one
    • Can be perceived as adding another step before getting to court
  • VI. Expert fact-finding

    In disputes involving complex, technical matters, an expert fact-finder may resolve some (or all) of the issues in dispute more easily and efficiently because of his or her training and expertise.

    The Dispute Prevention and Resolution Services at (613) 957-4643, has a list of experts who can act as fact-finders to help to resolve a dispute.

    Expert fact-finding

    A third party neutral with substantive or technical expertise examines and evaluates disputed facts central to the controversy. The fact-finder's report, binding or non-binding, may reduce uncertainty and thus promote settlement.

    When the process can occur

    At any time during the dispute.

    Client's role

    The client prepares information and background material for the fact-finder's review.

    Lawyer's role

    The lawyer can assist the client to ensure that the material submitted to the fact-finder clearly separates factual issues from legal issues.

    potential advantages

    • The fact-finder has technical expertise that a judge is unlikely to have
    • Saves the costs of having each side present expert evidence at the trial
    • Private

    potential disadvantages

    • This leaves crucial decisions to a technical expert rather than a judge
    • Gives decision-making powers to one technical expert
  • VII. Mini-trials

    A mini-trial can highlight the strengths and weaknesses of each side's case improving the possibilities of reaching settlement before trial.

    If you are looking for neutrals to sit on a mini-trial panel, you can call Dispute Prevention and Resolution Services at (613)957-4643, for a list of contacts.

    Mini-trial

    This informal and flexible process, typically used in commercial disputes, combines mediation, negotiation and non-binding arbitration. The parties determine the exact structure of the mini-trial.

    Each party's lawyer presents the case to a panel, which usually consists of one representative from each side and a neutral third party. The neutral third party may give an advisory opinion at the conclusion of the “information exchange”. The other two panel members then attempt to negotiate a settlement with the assistance of the neutral third party who acts as a mediator.

    When the process can occur

    Any time before trial.

    Client's role

    The client provides background information to the lawyer, may participate in negotiations towards a settlement and may identify a senior person to represent its interests.

    Lawyer's role

    The lawyer prepares the case as if for trial and presents it to the panel.

    potential advantages

    • Less formal than a trial
    • A short process with the potential to resolve the dispute without the need to go to trial
    • Less costly - may save time and money

    potential disadvantages

    • Lacks the structure of trial procedures
    • Trial-like nature may polarize sides
  • VIII. Mediation-arbitration (med-arb)

    The mediation-arbitration process offers the promise that the dispute will be resolved, even if the parties are unable to reach a settlement themselves.

    In the past, the same person often acted as mediator and then, on issues that were not settled, as arbitrator. Recently, parties have expressed concern that the mediation process could be compromised because they might be reluctant to negotiate freely if the mediator were also to act as the arbitrator. Increasingly, the parties work with a mediator and, if the parties cannot resolve all the issues, a different person acts as the arbitrator.

    Please refer to the notes on arbitration for more information.

    If you are looking for a mediator, you can call the Dispute Prevention and Resolution Services, at (613) 957-4643, for a list of contacts.

    Mediation-arbitration (Med-Arb)

    This process begins as the mediation of a dispute by a neutral third party. But, if the mediator does not successfully, resolve the dispute, an arbitrator, who may or may not be the person who acted as a mediator in the dispute, makes a decision. In most cases, the decision is binding on the parties.

    When the process can occur

    Any time before trial.

    Client's role

    The client usually provides information to and communicates directly with the mediator and the other party during mediation. If some issues are not resolved and go on to arbitration, the client usually assists the lawyer to prepare for arbitration.

    Lawyer's role

    During the mediation phase, the lawyer gives the client advice about the legal issues involved in the dispute and reviews any agreement that the client reaches with the other party. The lawyer usually presents the evidence on any unresolved issues to the arbitrator.

    potential advantages

    • There is added incentive to resolve issues in mediation since the unresolved issues are automatically decided in arbitration, where the parties have less control of the outcome.

    potential disadvantages

    • If one party has a lesser interest in mediation, the dispute will end up in arbitration by default, leaving the decision in the dispute to the mediator-arbitrator.
  • IX. Arbitration

    Arbitrations are generally handled either by a single arbitrator or by an arbitration panel, in which case each side usually picks an arbitrator and then the two arbitrators choose a third. Arbitrations are less formal and may be more abridged than court proceedings, although they follow similar rules of evidence and procedure.

    Lawyers could consider the arbitration option if they are prepared for trial and their court date is not imminent. An arbitrator may be able to hear the case within a short time frame.

    Finding an arbitrator

    Arbitrators should have training in arbitration techniques and be certified by an accredited arbitration organization. The Department of Justice Canada has contributed funds to the development of two arbitration centres which provide training to arbitrators - the British Columbia International Commercial Arbitration Centre in Vancouver and Le Centre d'arbitrage commercial national et international du Québec in Quebec city.

    Dispute Prevention and Resolution Services, at (613) 957-4643, can give you a list of arbitrators.

    Treasury Board Policy

    The Contracting Policy gives departments and agencies the authority to take disputes to arbitration without the formal concurrence of the Department of Justice Canada. Only cases involving questions of public law must be approved for arbitration by senior Department of Justice officials. Public law questions include those concerning the Canadian Charter of Rights and Freedoms, the Constitution Act, and the Canadian Human Rights Act. Department of Justice legal counsel can assist client departments and agencies with the arbitration.

    Arbitration

    Parties usually agree, in contracts or collective agreements, that if a dispute arises it will be settled through arbitration. Although arbitration is a formal process covered by federal and provincial laws, the parties can design many of its structural elements, including the rules of procedure, time limits and number of arbitrators.

    Arbitration can be binding or non-binding. In non-binding arbitration, the parties use the process to see if they can come to a settlement.

    In binding arbitration, an arbitrator's or panel's decision is final and will only be reviewed in court on very limited grounds.

    When the process can occur

    According to the terms of the arbitration clause or, in the absence of such a clause, by agreement of the parties after negotiations fail to result in a settlement.

    Client's role

    The client assists the lawyer in preparing for the arbitration by providing technical and background information.

    Lawyer's role

    The lawyer prepares for arbitration the same way he or she would prepare for trial. As is the case in other DR processes, the lawyer should be alert to settlement possibilities and should discuss these with the client.

    potential advantages

    • Although the rules of procedure provide guidelines, the process can still be somewhat flexible
    • Arbitrations may result in a savings of time and money
    • The process allows an arbitrator to consider a wide range of issues
    • potential disadvantages
    • Arbitrators can make decisions on questions of fact and law but may lack the legal experience of some judges
    • In the absence of a specified time frame, arbitrations may continue over a long period of time
  • X. Court adjudication

    Court adjudication is the most structured and formal dispute resolution mechanism. It is also the one with which lawyers and clients are most familiar. However, there is much truth in the adage that any settlement is better than a bad judgment.

    Pre-trial settlement conferences

    Pre-trial settlement conferences are now a well established step in the court adjudication process and are mandatory in some jurisdictions.

    At a pre-trial meeting, lawyers for each party present their cases to the judge. The judge tries to reduce the number of issues to be resolved at trial and may suggest possible settlement options. Sometimes, the disclosure of information before the trial can precipitate a settlement.

    When lawyers come to the pre-trial meeting with an open mind, they can increase settlement possibilities. Lawyers can encourage their clients to consider all reasonable offers to avoid the time and costs of going to trial.

    Court adjudication

    The parties present their cases to a judge who makes a binding decision on the outcome of the dispute.

    When the process can occur

    Preferably as a last resort, when issues cannot be resolved using any other means and all other attempts to settle the dispute have failed. However, some cases may be most appropriately resolved through court adjudication (see the list of the types of cases that are best dealt with in court ).

    Client's role

    The client provides information and technical assistance to the lawyer who is preparing the case for trial. In the federal government, the client may work with both the department's legal service unit and the litigation lawyers.

    Lawyer's role

    The lawyer prepares and presents the evidence to the court. During the trial, the lawyer should be alert to settlement possibilities and should discuss these with the client.

    potential advantages

    • Judges have the legal experience that enables them to decide questions of law
    • The result is a decision in favour of one of the parties
    • The court process, although sometimes slow, is predictable and provides procedural safeguards

    potential disadvantages

    • Formality and rules of procedure may not be conducive to settlement
    • Judges may lack technical expertise and require time to obtain the necessary knowledge at an increased cost to clients
    • The focus of litigation is often vindication, perhaps increasing tension between the parties in the future
    • The parties have to accept a third party's decision about their affairs

Conclusion

“Let the forum fit the fuss”

Columbia law professor Maurice Rosenberg coined the phrase “let the forum fit the fuss”. It describes the process of identifying the nature of the dispute, the needs and interests of the parties and the best dispute resolution option in the circumstances. The goal is to avoid a long, drawn-out process. Getting the right people to sit down together in the right environment may result in a “win-win” situation with a minimum amount of paperwork and a quick solution so that the parties may get on with business.

You can contribute to the use of the full range of dispute resolution options.

We hope that the information in this booklet will encourage you to consider DR options the next time you are involved in a dispute.

Here are some things you can do:

  • review all the disputes you are handling and consider which of the DR options described in this booklet might be useful as a way of resolving the dispute
  • document cases you settle using a DR mechanism so that your colleagues can learn from your experience
  • communicate with the Dispute Resolution Project about your experiences, positive and negative, with DR
  • consider including a clause requiring the parties to use DR if a dispute arises, when you are drafting the terms of a new contract
  • attend training sessions on DR techniques
  • learn about DR mechanisms - there are lots of materials available.

For more information, please call Dispute Prevention and Resolution Services. We are here to answer your questions and support your efforts to use the full range of DR options. You can reach us at (613) 957-4643, or at dpr-prd@justice.gc.ca.

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