Alternative Dispute Resolution (ADR)

Question 1

What are the two main alternatives to litigation?

Answer 1

Arbitration and Alternative Dispute Resolution

Question 2

What is arbitration?

Answer 2

Arbitration is an adjudication operating outside of the normal court process. A third party reaches a decision that is binding on the parties in dispute.

Question 3

What are the main advantages of arbitration?

Answer 3

Arbitration may be quicker than litigation, the procedures are less formal and occur in private, the solutions reached are often more practical than those ordered by the courts and the decision is binding on the parties.

Question 4

How can the solutions in arbitration be enforced?

Answer 4

The winning party in arbitration can apply to the High Court to enforce the arbitration award as if it were a court award.

Question 5

What are the disadvantages of arbitration?

Answer 5

Certain remedies e.g. injunctions are not available, the dispute may not be investigated as deeply/thoroughly as it would have done in court and it is not always cheaper than litigation.

Question 6

What is alternative dispute resolution (ADR)?

Answer 6

ADR is a means of resolving disputes by using an independent third party to help the parties reach a solution. ADR is voluntary and the parties can withdraw at any point before a settlement is reached

Question 7

Is ADR binding?

Answer 7

No, the third party can suggest a solution to the parties, but cannot impose this

Question 8

What are some of the types of ADR?

Answer 8

Mediation, expert appraisal or expert determination are all forms of ADR. This is not exhaustive.

Question 9

Can a court order that the parties use ADR?

Answer 9

No, the courts should actively encourage parties to use ADR however

Question 10

Why should the third party in ADR be independent?

Answer 10

If the third party is independent, the parties are more likely to trust him and be open with him, and less likely to be aggressive in front of him. Therefore, he is more likely to be able to reach a solution.

Question 11

What are the five key advantages of ADR?

Answer 11

Confidentiality, cheapness and speed, flexibility, preserving a business relationship and commercial reality

Question 12

What are the four key disadvantages of ADR?

Answer 12

ADR is non-binding, the awards are not easily enforceable, the facts may not be fully disclosed and ADR is not appropriate for all cases

Question 13

What are the nine types of ADR?

Answer 13

Mediation/Conciliation, Med-arb, mini-trial, expert appraisal, judicial appraisal, expert determination, final offer arbitration, early neutral evaluation and ombudsman

Question 14

What is mediation/conciliation?

Answer 14

A third party will be appointed as mediator and will receive statements from both parties before discussing the case with them.

Question 15

What is Med-Arb?

Answer 15

The parties agree to submit their dispute to mediation and if this fails, they agree to go to arbitration

Question 16

What is mini-trial?

Answer 16

The parties appoint a neutral to sit as chairman of a tribunal with another representative, and will hear the cases of the parties and negotiate with one another alongside an independent arbiter.

Question 17

What is expert appraisal?

Answer 17

The parties will refer all or part of the dispute to an expert in the field for his opinion

Question 18

What is judicial appraisal?

Answer 18

Former judges and senior counsel give a quick preliminary view on the legal position

Question 19

What is expert determination?

Answer 19

This is halfway between ADR and arbitration, where an expert decides the case for them and they agree to accept his decision. If not, then the winning party can sue for breach of contract

Question 20

What is final offer arbitration?

Answer 20

The parties instruct their neutral as to the offer of terms which they will settle on, and he will choose one of the offers.

Question 21

What is early neutral evaluation?

Answer 21

The parties instruct their neutral to make a preliminary assessment of the facts at an early stage in the dispute

Question 22

What is ombudsman?

Answer 22

An ombudsman scheme seeks to resolve complaints without litigation

Question 23

What is the most proactive way of using ADR?

Answer 23

To agree in the original contract that where a dispute arises, they will solve it with the use of ADR

Question 24

When should ADR be discussed?

Answer 24

A solicitor should discuss possible uses of ADR whenever a dispute arises in a commercial matter, as soon as possible