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What is ADR?
Alternative Dispute Resolution is a mechanism used in order to resolve a dispute without a court hearing.
Why is there a need for ADR?
- Court hearings are not always the most appropriate or best method of dealing with a civil dispute.
- Court cases are expensive, time consuming and can be very traumatic due to the adversarial nature of the hearing.
- Having a winner and loser often leads to the breakdown of the relationship between the parties be it business or family.
- The different forms of ADR offer the chance of avoiding some of the problems associated with court hearing.
Advantages of ADR
- Costs: ADR is usually cheaper to solve disputes as there are no court costs incurred
- Speed: ADR will allow matters to be resolved more quickly than going through a court hearing.
- Control: the parties have more control over ADR rather than handing control to the courts
- Flexibility: the time and place can be arrange to suit both parties resulting in a more informal and relaxed hearing. The strict letter of the law does not need to be followed.
- Expertise: The parties can choose their own mediator/conciliator/arbitrator e.g. technical expect
- Privacy: the matter will be dealt with in private and therefore no publicity
- ADR is less adversarial than court hearings and encourages cooperation. This allows relationships e.g. business relationships, to continue (avoiding bad feeling). They are often destroyed by the adversarial nature of a court hearing.
Disadvantages of ADR
- Unequal bargaining power: in some matters one party is able to dominate the other, for example, in employment cases or divorce. In such circumstances, a tribunal or court may be the better option.
- Lack of legal expertise: during the process a legal issue may arise and the mediator/conciliator/arbitrator may lack the legal expertise to deal with it.
- Court action may still be required: following the mediation/conciliation process, the matter may still remain unresolved and therefore will need to go to court. This takes time and money.
- Lack of enforceability: in terms of mediation and conciliation, the agreement is usually unenforceable. If one party fails to fulfill the terms of agreement, the matter may still have to go before the court.
- is a voluntary process where an impartial/neutral third part (mediator) will assist the parties in coming to a compromise solution.
- The parties control the process, with the mediator playing a passive role and acting as a facilitator, allowing the parties to reach their own agreement.
- The mediator will be in charge of the process but will not influence the outcome.
- This agreement/outcome is not binding unless formally recorded in a signed agreement.
- The process can be terminated by either party at any stage.
- A more formal method of mediation is the Formalised Settlement Conference. This involves a mini-trial, with a panel of three mediators.
- The panel is made up of one decision-making executive from each party and a neutral mediator to assist if necessary.
- A more formal approach to mediation is a 'formalised settlement conference'.
Formalised settlement conference
- Involves a mini trial where each side presents its case to a panel composed of a decision making executive from each part and a neutral party.
- Once all the submission have been made the executives with the help of the neutral party will try come to an agreement.
- If they cannot come to an agreement the neutral adviser will act as a mediator between them
Examples of mediation services:
- There is a growing number of local and national mediation services, for example:
- The Centre of Effective Dispute Resolution (CEDR), CEDR offers dispute resolution solutions to a wide range people from large businesses to small private clients
- Family Mediators Assocition - offers comprehensive family and hybrid mediation.
- is very similar to mediation in that it is voluntary and both parties must agree to submit their matter to the conciliation process.
- As in mediation, the conciliator has no power to impose their own solutions but they will play far more active role than a mediator by suggesting grounds for compromise and possible ways of resolving the issue. The final agreement is not legally binding on either part unless made so by a signed agreement.
Example of conciliation service
The Advisory, Conciliation and Arbitration service (ACAS) deals with employment matters.
Advantages of Mediation and Conciliation
- Voluntary process, encourages co-operation and avoids the adversarial system.
- Both can be cheap and quick.
- Less formal than court proceedings and does not have to follow the strict letter of the law.
- Maintains working relationships and can include decisions about future dealings.
- Both parties maintain a sense of control and can choose the method of mediation
- Agreements are more likely to last as they are a compromise and in a sense 'everyone wins'
- highly successful
- private and no media exposure
- mediation and arbitration organisations have experts to assist
Disadvantages of mediation and conciliation
- No guarantee that the dispute will be resolved.
- Will not work unless both parties are willing to cooperate and reach a compromise
- Settlements are often considerably lower than those awarded by the courts
- Agreements cannot be enforced so there is no pressures to stick to it
- Could go on for the a long time without a settlement
- Unless the mediator has the necessary qualities mediation can turn in to a bullying exercise and weaker parties may not stand up for their own rights.
- It is governed by the Arbitration Act 1996
- Its the most formal method of ADR whereby both parties will voluntarily agree to:
- allow their dispute be left to the judgement of an independent/neutral arbitrator or panel of arbitrators
- the time and place of the hearing
- the procedure for the hearings - this can range from a 'paper' arbitration to a formal court-like-hearing
- be legally bound by the arbitrator's decision - the 'Award'
- Binding on both parties
- enforced by the courts if necessary
- Can be challenged in the courts on the grounds of serious irregularity in the proceedings or on the point of law - s68 Arbitration Act 1996
Examples of arbitration service
- The Advisory, Conciliation and Arbitration Service (ACAS) - deals with employment matters.
- The Association of British Travel Agents (ABTA) Arbitration scheme deals with alleged breaches of contract and/or negligence between consumers and Members of ABTA in respects of holidays.
Advantages of arbitration
- The parties can chosen their arbitrator and appoint a technical expert if appropriate
- Use of an expert to decide avoids having to use expert witnessess
- Flexibility - the time and place of the hearing can be decided by the parties to suit their needs and is held in private
- Likely to be dealt with quicker and cheaper than the courts
- Award is final and can be enforced by the courts
- Avoidance of bad feeling between the parties
- Unexpected legal points may crop up which the arbitrator may not be able to fully take into account
- When dealing with technical points, arbitration may become highly complex
- Commercial arbitrator can take as long as the courts to complete.
- Professional arbitrators may be very expensive
- The lack of availability of legal funding may disadvantage an individual - if a person on low income they would qualified for legal aid
- Rights of appeal are more limited than the courts