Alternate Dispute Resolution in Canada
Resolving Conflicts Outside the Courtroom
Last Updated: July 14, 2025
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Key Takeaways:
- Negotiation, mediation, and arbitration are methods of alternative dispute resolution available to Canadians.
- ADR can reduce court costs and time while helping save meaningful relationships if a dispute occurs.
- Decisions made during ADR proceedings can be binding for both parties through a legally written agreement.
Table of Contents
- What is alternative dispute resolution (ADR) in Canada?
- What are the different types of alternative dispute resolution?
- How long does alternative dispute resolution take?
- Advantages to using alternate dispute resolution
- When is alternative dispute resolution used?
- How do I find alternative dispute resolution?
- Are alternate dispute resolution decisions binding?
- Prevent disputes with proper documentation
Conflicts are an inevitable part of life. Whether you’re navigating a business disagreement or going through a marital separation, disputes are bound to happen.
While heading to court might seem unavoidable, litigation can be time-consuming, stressful, expensive, and involve long wait times for matters to come to court. Fortunately, there are other effective ways to resolve disputes without setting foot in a courtroom.
This guide explores the alternative dispute resolution (ADR) options available in Canada, helping you understand how to settle conflicts efficiently, affordably, and often more amicably.
What is alternative dispute resolution (ADR) in Canada?
Alternate dispute resolution (ADR) is a broad term which includes various methods of finding an outcome or solution to end a conflict using resources other than litigation (i.e., formal court process).
In Canada, litigation may be brought to the federal court if the subject matter involves federal jurisdiction. Otherwise, litigation should be brought before one of the provincial courts.
No matter which jurisdiction is appropriate, the lawyers involved will all encourage one or more ADR processes to be attempted before proceeding with court action. In fact, many court services will want to see that some form of ADR has been tried before hearing an application.
The overall goal of ADR is to reach a mutually agreed-upon resolution to reduce court time and case backlogs. To start the process, both parties must voluntarily agree to use ADR for the conflict. Then, they can consider bringing in a neutral third party to facilitate discussions and a final agreement.
The overall goal of ADR is to reach a mutually agreed-upon resolution to reduce court time and case backlogs. To start the process, both parties must voluntarily agree to use ADR for the conflict. Then, they can consider bringing in a neutral third party to facilitate discussions and a final agreement.
Please note: ADR does not apply to cases involving abuse, domestic violence, or cases that need a formal ruling by a judge. If you’re in a conflict or looking for legal advice for any conflict regarding a criminal case, please contact a lawyer for advice and guidance.
What is the difference between litigation and alternative dispute resolution?
Litigation is the formal court process that typically involves representation by lawyers. Alternative dispute resolution takes several forms, from informal to more formal procedures, allowing both parties to raise their concerns and find a compromise.
What are the different types of alternative dispute resolution?
Three types of alternative dispute resolution are available in Canada to resolve a conflict without going to court:
1. Negotiation
Negotiation is when you and other parties come together to discuss and resolve a dispute. This choice of ADR is the most informal of the options, however, in many negotiations, both parties are represented by lawyers. There can be two possible rounds of negotiation, the first between the two parties at the beginning of the dispute and the next between lawyers acting on their behalf.
Negotiation is an opportunity to collaborate and create a solution that best fits everyone involved in a conflict. It is also a good option to try before involving the court and can help keep a business or family relationship together.
At the end of the discussions, you can create a written agreement to enforce your final decisions for future reference.
2. Mediation
Mediation is an ADR option that involves an impartial and unbiased third party called a mediator.
Mediators specialize in conflict resolution and are trained in special techniques to assist both parties. With the mediator's guidance, both parties must mutually agree on an outcome. The mediator is only there to help find a solution and guide the conversation.
The parties must execute an agreement for a decision to be binding. Mediators can help draft a contract but cannot create it or make a final decision for you.
In some jurisdictions, the court system may even require mediation as part of a pretrial procedure for litigation.
3. Arbitration
Arbitration is a more structured and formal type of ADR. You and the other disputing party choose an arbitrator or a dispute resolution panel to conduct the process.
Arbitrators are often experts in a specific area of law or a specific industry. For example, if you’re having a financial dispute with a client over a payment determined in a Service Agreement for computer services, you’ll likely select an arbitrator with experience either in IT or even a contract law background.
The arbitrator or panel will consider all arguments and evidence during the proceedings, though the process is still less formal than the court. Depending on your jurisdiction’s laws, both parties can agree in advance whether the arbitrator’s decision will be binding and require a Confidentiality Agreement.
For this process to work, you and the other party must agree on the ground rules laid out by the arbitrator.
Judicial dispute resolution (JDR), also known as court ADR, is another option. JDR takes place with lawyers and a judge without the lengthy court process of a trial. If you're unsure which ADR option is best for your situation, contact a lawyer for help.
How long does alternative dispute resolution take?
Alternate dispute resolution (ADR) can vary in length. The form of ADR and the case's complexity are factors that can impact the duration.
Some cases can be resolved in a few days, while other sessions could take weeks. However, booking with a mediator or arbitration tribunal can be quicker than waiting for a court date.
Advantages to using alternate dispute resolution
There are many advantages to using alternate dispute resolution. If a conflict can be resolved using ADR, it can:
- Preserve confidentiality as court proceedings can be public record (e.g., cases with the Supreme Court and provincial courts like those in Alberta and Ontario)
- Deliver quicker resolution for both parties
- Reduce stress that can come with longer court proceedings
- Save on legal fees
Overall, ADR can grant both parties an opportunity to have more control over the outcome. This can save a business relationship or family dynamic from ending on bad terms.
When is alternative dispute resolution used?
Alternate dispute resolution can resolve many forms of legal disputes. Many contracts, including LawDepot’s templates, include clauses stating that in the event of a dispute, the parties will first attempt mediation, and then arbitration before going to court.
The sooner you initiate the ADR process, the better. It’s important to note that in most cases, ADR processes are voluntary and do not apply to cases involving abuse, domestic violence, or cases that need a formal ruling by a judge. Areas that can benefit from using ADR include:
Employment
When an employer and employee need to resolve an issue regarding an agreement or conflict in the workplace, ADR can be a helpful tool for reducing time and costs for both parties.
For example, say your employee has breached their employment contract, but they feel they have been wrongly terminated. Steps like mediation or arbitration can help resolve the situation by having an adjudicator with the correct knowledge regarding employment laws, and knowledge of the industry, to help create a mutually beneficial resolution.
Family
Couples considering separation or divorce can use alternate dispute resolution to agree on dividing assets and parental responsibilities.
The Divorce Act requires couples to consider ADR if it suits their circumstances. This helps reduce court wait times. ADR can include determining spousal support and dividing property. Often the outcome of a negotiation or mediation between the spouses is written up by the lawyers and signed by the judge in the form of a consent order. Parenting orders made under the Divorce Act may direct the parties to attend some form of family dispute resolution process.
Please note, someone seeking separation or divorce where domestic violence is involved should contact a lawyer.
Financial
If there is a concern over smaller loans, mortgages, or commercial interactions, ADR is a possible solution to avoid going to court. Financial contracts may also include a clause determining the use of mediation and arbitration prior to court proceedings to help determine the first steps of dispute resolution, which can benefit both parties.
For example, if payments are missing, the lender and borrower may wish to reach an agreement without going to court or their original agreement may outline the first dispute resolution steps to take through mediation. Any final decisions made in ADR, for example, a payment plan or reimbursement deadline, can be made in writing.
Tenancies
It’s common for landlords and tenants to have disputes. A landlord may raise a dispute about missing rent payments or a tenant breaching their Residential Lease Agreement.
Alternatively, a tenant may seek compensation for major repairs they’ve made on the property with their own funds.
Some jurisdictions offer residential dispute resolution services for tenancy concerns. These services help reduce the court backlog.
Other uses for alternative dispute resolution
ADR is not limited to the above scenarios. Anyone facing concerns in the following areas may also benefit from using ADR:
- Service disputes: Businesses or freelancers may use mediation first and then proceed to arbitration if they need assistance in conflict resolution regarding contracts or client concerns. Commercial ADR also offers companies a way to resolve issues outside the court on a larger scale.
- Estate disputes: If a disagreement arises while completing estate planning, families can attend ADR to help resolve any issues. Mediators and arbitrators can also help interpret estate planning documents (e.g., Last Wills, Powers of Attorney, and guardianship matters).
- Intellectual property (IP) disputes: IP concerns, like copyright infringement, arise when the improper use of IP occurs or someone breaches an agreement. If a Cease-and-Desist Letter doesn’t solve the problem, ADR can be a path to resolution. The Canadian government outlines that mediation or arbitration can help resolve issues involving multiple types of IP.
If you’re unsure what form of ADR to use or if your concerns about a dispute can be handled using ADR, seek the advice of a lawyer to find a solution.
How do I find alternative dispute resolution?
Each level of the court system will have resources or guides on beginning the ADR process. Depending on the facts of the case and subject to any contract between the parties, there may be a choice of jurisdiction when it comes to initiating legal proceedings.
The various entities that can offer ADR are sometimes referred to as an Office of Dispute Resolution.Court websites and law societies can help guide you to a mediator or how to apply for arbitration. Additionally, each jurisdiction will have laws regarding ADR. Examples include:
| Jurisdiction | Regulations and Resources |
| Federal | |
| Alberta |
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| British Columbia |
|
| Manitoba | |
| New Brunswick | |
| Newfoundland and Labrador |
|
| Northwest Territories | |
| Nova Scotia | |
| Nunavut |
|
| Ontario | |
| Prince Edward Island | |
| Quebec |
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| Saskatchewan | |
| Yukon |
Alternatively, you can talk to a lawyer for a referral to a mediator or arbitrator or search your jurisdiction for more ADR options.
Are alternate dispute resolution decisions binding?
Decisions made during dispute resolution can be binding. You and the other party can work together during negotiation and mediation to create an agreement. Though verbal agreements can be legally binding, having one in writing is stronger and can be used as evidence of a decision.
For example, in family law, negotiated agreements between the parties are often written up as consent orders to be signed by a judge. The resulting order will then be binding on both parties.
By agreeing to binding arbitration, the parties agree in advance that they will accept and abide by the decision of the arbitrator, whatever the outcome. Following arbitration, the decision made by the arbitrator or the panel is legally binding.
If a party breaches an agreement entered through ADR, the other party can seek legal action to enforce the terms and conditions. This can include pursuing a lawsuit for damages or a court order to enforce or fulfill a contract’s terms.
Prevent disputes with proper documentation
Using thorough contracts in employment, tenancies, and other essential relationship matters can help outline the responsibilities of all parties involved.
Examples of documents you can consider to help protect you and another party are:
- Residential Lease Agreements for tenancies
- Bills of Sale for selling personal property
- Confidentiality Agreements when sharing delicate information (i.e., intellectual property)
- Service Agreements when providing a service to a client
- Loan Agreements when lending money for a more comprehensive agreement than a Promissory Note
Having contracts in place can help reduce the chances of a conflict and can also be used as evidence if ADR is necessary.
LawDepot offers over a hundred easy-to-use templates for Canadians to create contracts and legal documents for their needs. Have a look to find the legal documents you need here.
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