Alternative Dispute Resolution (ADR) Flashcards
First method of resolving a dispute:
Negotiation - Both parties will negotiate with each other.
Second way of resolving a dispute, after negotiations:
Mediation - Parties will negotiate with a third party involved, and offer advice.
After mediation, third way of resolving a dispute:
Conciliation - Parties with the help of a neutral third party who actively suggests solutions.
After conciliation, it’s the fourth way of resolving a dispute:
Arbitration - Parties agree to let a third party make a legally binding decision.
Fifth method of resolving a dispute, after arbitration:
Both parties agree to let a third party make a legally binding decision.
Tribunals - Parties go to a tribunal where a panel of independent people make decisions for them.
If going to tribunal fails the parties agree to go to the courts for:
Litigation.
Disadvantages of negotiation:
It may not be successful, other ADR or court proceedings may have to be used.
It is not suitable when both parties are hostile towards each other. ADR requires cooperation between each other.
Repeated failings of negotiation may prolong proceedings
Advantages of mediation and conciliation:
Both parties are in control and can withdraw whenever they want.
The decision is not a strictly legal one, it is more based on common sense and compromise.
It makes it easier for companies to do business between each other.
It avoids the conflict of the courtroom.
Disadvantages of mediation:
Mediation is only useful if there is some form of compromise.
There is no guarantee of a resolution.
Advantages of arbitration:
Parties may choose their own arbitrator under Section 15 of the Arbitration Act
A question of quality can be decided by a technical expert being called in
The hearing time and place can both be arranged to suit both parties ( flexible)
The entire procedure used is flexible and the parties can choose that which is most suited to the situation
Matter is dealt with in private
Dispute will be resolved more quickly
Usually much cheaper
Award is normally final and can be enforced by the courts
Disadvantages of arbitration:
An unexpected legal point may rise which cannot be dealt with by a non-lawyer arbitrator
A professional arbitrator may have expensive fees
It will also be expensive if the parties opt for a formal hearing, with witness giving evidence on both sides and lawyers representing
Rights of appeal are limited
Delays for commercial and
international arbitration are almost as long as court hearing delays
What is a Scott v Avery clause?
Most consumer products have this clause.
It forces consumers to go through ADR in order to resolve a dispute with a product.
Examples of these contracts include mobile phone contracts, satellite TV, package holiday contracts and anywhere a signature is demanded in terms and conditions.
Key points of the arbitrator and the hearing:
Depending on what is agreed, there may be a single arbitrator or up to 3.
The method of choosing the arbitrator is up to the two parties involved.
If the dispute involves a point of law, a lawyer might also be appointed.
Hearings can either be ‘paper arbitrations’ where all communication is conducted on paper, the arbitrator reads through everything and then makes their decision or they might be face-to-face.
Witnesses can also be called.
The arbitrator’s decision is final and legally binding and can be enforced by the courts.
Any award can be appealed to the courts if there are any grounds of irregularity or a point of law is in question.
Advantages of negotiation:
It can be conducted between the parties with no legal experts with them.
Negotiation can be used in any point of the dispute.
It is the cheapest way to resolve a dispute, especially when both parties do the negotiation themselves.
The negotiated resolution can include an agreement about future business deals, which can also be done in mediation and conciliation. They cannot do it when the court makes the decision.
