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'
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