Business dispute resolution options: Two paths to resolution in Canada

Business disputes are often a part of doing business. Not everyone will agree on every decision or business plan. It is important to carefully consider resolution options when these disputes arise. In Canada, there are generally two pathways to resolution.

Option #1: Alternative dispute resolution (ADR)

ADR provides a path to resolution that does not include going to court. Because you are not dealing with the requirements that come with going to court, these options are often more efficient, less costly, and provide the parties with more control over the final resolution when compared to traditional litigation.

There are three options for ADR:

    • Negotiation. This is the most casual of the options and involves the parties working together to develop a resolution to the problem.
    • Mediation. This form of ADR uses a neutral third party, a mediator, to help guide negotiations. This individual serves as a guide and cannot force the parties to accept a proposed resolution.
    • Arbitration. In this option, the parties present evidence and the facts of the case to a neutral person or panel. These arbitrators are often experts in the field which helps when the dispute involves a niche area of business. Although the more formal of the three forms of ADR, it is still often more efficient compared to traditional litigation.

In some cases, it is best to use a combination of these options. This allows those who are negotiating a resolution the flexibility to tailor the path to their specific situation. In addition to the benefits noted above, ADR is also more likely to result in a successful sustainable agreement both parties can follow compared to one determined by the courts and provides more confidentiality compared to traditional litigation.

Option #2: Traditional litigation

Traditional litigation within a courtroom setting remains the best option when there is an imbalance of power, when one party is intimidated by the other, or when ADR does not result in a workable resolution. The Superior Courts in Canada generally take on more complex business disputes.

Is there anything else business leaders should know when working to resolve a business dispute?

Parties to the dispute are allowed to have legal counsel to represent their interests in either pathway. Whether ADR or traditional litigation, a lawyer can help to advocate for your business’ interest and better ensure a solution-focused resolution option that falls in line with your future business plans.

Remedies available depend on the details of the dispute. A breach of contract dispute, for example, will generally come with damages to compensate for the cost of the breach. Specific performance is another possibility.

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