Conciliation is an alternative out-of-court dispute resolution instrument.

Like mediation, conciliation is a voluntary, flexible, confidential, and interest based process. The parties seek to reach an amicable dispute settlement with the assistance of the conciliator, who acts as a neutral third party.

The main difference between conciliation and mediation proceedings is that, at some point during the conciliation, the conciliator will be asked by the parties to provide them with a non-binding settlement proposal. A mediator, by contrast, will in most cases and as a matter of principle, refrain from making such a proposal.

Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings. These proceedings are rarely public. They are interest-based, as the conciliator will when proposing a settlement, not only take into account the parties’ legal positions, but also their; commercial, financial and / or personal interests.

Like in mediation proceedings, the ultimate decision to agree on the settlement remains with the parties.

Merits and demerits of conciliation—a comparative analysis

This Practice Note discusses that like any other method of dispute resolution, conciliation also has several pros and cons that an interested party should consider before embarking on the process. While it is unparalleled as an informal method of dispute resolution, the lack of formality and established rules may also discomfit parties who are not knowledgeable enough about the process.

Limitations of conciliation

This Practice Note covers the limitations posed by conciliation as a method of alternative dispute resolution. The process of conciliation is the most informal of all methods of alternative dispute resolution, but that does not prevent it from possessing certain drawbacks, some of which have serious implications, such as the scope of challenge against conciliation settlement agreements.

Main benefits

  • Conciliation ensures party autonomy: The parties can choose the timing, language, place, structure and content of the conciliation proceedings.
  • Conciliation ensures the expertise of the decision maker: The parties are free to select their conciliator. A conciliator does not have to have a specific professional background. The parties may base their selection on criteria such as; experience, professional and / or personal expertise, availability, language and cultural skills. A conciliator should be impartial and independent.
  • Conciliation is time and cost efficient: Due to the informal and flexible nature of conciliation proceedings, they can be conducted in a time and cost-efficient manner.
  • Conciliation ensures confidentiality: The parties usually agree on confidentiality. Thus, disputes can be settled discretely and business secrets will remain confidential.

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