ADR is a term that refers to several different methods of resolving disputes outside traditional legal and administrative forums. The main ADR alternatives to civil litigation are arbitration, conciliation and mediation. Disputing parties use these ADR methods because they are expeditious, private and generally much less expensive than a trial. Mediation is a concept that is often mistakenly confused with conciliation. Although the two methods have similar aspects, they are fundamentally different. To appreciate the differences between arbitration, mediation, and conciliation, it is helpful to explain them separately.

Arbitration

Arbitration is an ADR method where the disputing parties present their disagreement to one arbitrator or a panel of private, independent and qualified third party “arbitrators”. The arbitrator(s) determine the outcome of the case. While it may be less expensive and more accessible than trial, the arbitration process has well-defined disadvantages. Some of disadvantages include the formal or semi-formal rules of procedure and evidence as well as the potential loss of control over the decision by the parties after transfer of decision-making authority to the arbitrator.

Mediation

Mediation is an ADR method where a neutral and impartial third party, the mediator, facilitates dialogue in a structured multi-stage process to help parties reach a conclusive and mutually satisfactory agreement. A mediator assists the parties in identifying and articulating their own interests, priorities, needs and wishes to each other. Mediation is a “peaceful” dispute resolution tool that is complementary to the existing court system and the practice of arbitration.

Conciliation

Conciliation is another dispute resolution process that involves building a positive relationship between the parties of dispute, however, it is fundamentally different from mediation and arbitration in several respects. Conciliation is a method employed in civil law countries like Italy and is a more common concept there than mediation. The “conciliator” is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement. It is unlike arbitration, in that conciliation is a much less adversarial proceeding. It seeks to identify a right that has been violated and searches to find the optimal solution.