This post talks aims to give you an insight into Alternative Dispute Resolution. Once you have read this post, you should be able to answer:
- What is Alternative Dispute Resolution (‘ADR’)
- Why is ADR popular?
- What types of ADR exist? (Negotiation, Mediation, Conciliation and Arbitration)
- What are the advantages and disadvantages of each type?
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What is Alternative Dispute Resolution?
Alternative Dispute Resolution is a way to try to resolve a civil dispute outside of court. Successful ADR resolves the dispute without the need for a court hearing. (Having said that, civil disputes which have reached court could still be resolved outside of court e.g. by negotiation).
Why is ADR popular?
People as well as companies often want to avoid disputes ending up in court, because:
- Court proceedings can be expensive
- Hearings are normally public, so can lead to bad publicity.
- Resolving disputes in court can also be expensive.
What types of ADR exist?
The main types of alternative dispute resolution are:
Each is discussed briefly below.
What is negotiation?
Negotiation has the meaning that most people would understand it as. It is simply trying to resolve a dispute by negotiation. There are no real formalities for negotiation. You can negotiate on the phone, by email, in a meeting, etc.
This is usually a cheap way of settling a dispute, as it does not necessarily require legal advice, etc.
Success depends on the willingness of the parties to come to an agreement.
It is private (as opposed to court proceedings which are public).
Even if a matter has reached the stage of court proceedings, the parties are free to try to negotiate a settlement outside of court.
What is Mediation?
Here an independent, impartial person known as a ‘mediator’ meets with the parties to try to help them to come to a settlement.
Mediation has the following characteristics:
- The mediator cannot say their opinion or advise the parties on the strengths and weaknesses in their arguments.
- Some mediators charge a lot of money for their services, but for some types of disputes there are mediators which are free in some circumstances. This however is uncommon.
- Discussions with the mediator are private, so there is less risk of publicity, etc.
- The mediator cannot force the parties to come to a settlement.
What is Conciliation?
Conciliation is where a person tries to help the parties to come to a settlement is called a ‘conciliator’. It has the following characteristics:
- The conciliator is more involved than a mediator in trying to resolve the dispute, in that he or she can give an impartial opinion on the legal position of the parties’ arguments.
- It is up to the parties whether they agree a settlement or not, as the conciliator cannot make the parties come to a binding settlement agreement.
- The conciliator usually charges for their services.
What is Arbitration?
Commercial contracts often provide that in the event of a dispute the matter is to be referred to an arbitrator rather than to a court to decide the outcome. The reason for this is to avoid publicity, expensive court costs, etc.
Arbitration typically has the following characteristics:
- The contract usually sets out how many arbitrators are appointed to settle the dispute. Normally this is one.
- Even if the contract is silent on the use of arbitrator (or even if there is no contract), parties with a dispute in civil law can often choose to avoid court and opt for an arbitrator.
- The arbitrator effectively acts like a judge in that he or she will hear the evidence and make a binding decision to resolve the dispute.
- The parties decide how the arbitrator hears evidence, etc. The could agree, for example, written statements only being allowed or by the parties, witnesses, etc. giving evidence in person to the arbitrator.
- The arbitrator makes a binding decision to decide the outcome of the dispute. Limited rights of appeal exist (in some circumstances).
- Arbitrators usually charge a lot for their services.
- Hearings with an arbitrator are usually private (rather than court hearings which are public).
To conclude, alternative dispute resolution has the aim of resolving civil disputes without the need for expensive and long court proceedings.
Only in the case of arbitration is there a guaranteed binding decision. In all the other types of alternative dispute resolution discussed above it is up to the parties to decide whether they wish to come to an agreement. Only the parties can decide whether they wish to resolve the dispute. Consequently court proceedings could still be necessary to resolve a dispute.
The above is a brief introduction into alternative dispute resolution. For more details on how I could help you with your Civil Litigation Law studies, feel free to contact me by clicking here on my Contact Me page.