Alternative Dispute Revolution (ADR)

Question 1

What are Alternative Dispute Resolutions (ADR) and the 4 examples?

Answer 1

• Instead of going to court and avoiding the costs, there are alternatives methods to settling disputes
• They are negotiation, mediation, conciliation, and arbitration

Question 2

What is Negotiation (ADR)?

Answer 2

• The process of trying to come to an agreement directly with the other party

Question 3

What is Mediation(ADR)?

Answer 3

Using a neutral third party in a dispute to help the parties come to a compromise solution

Question 4

What is Conciliation (ADR)?

Answer 4

• A neutral third party involved but more active than mediation who actively suggests solutions

Question 5

What is Arbitration (ADR)?

Answer 5

Where an independent arbitrator decides the case/ makes a binding decision

Question 6

What are the advantages of arbitration?

Answer 6

• Parties may choose their own arbitrator under s.15 of the Arbitration Act
• Procedure 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

Question 7

What are the disadvantages of arbitration?

Answer 7

• An unexpected legal point may rise which cannot be dealt with by a non-lawyer arbitrator
• A professional arbitrator may be expensive
• 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

Question 8

What are the advantages of using negotiation?

Answer 8

• Can be conducted by the parties themselves. There is no need to use lawyers or other people in the process
• Can be used at any point in the dispute from the beginning right up to the start of a court hearing
• It is the cheapest method of resolving a dispute, particularly where the parties do the negotiation themselves
• Can include agreement about future business deals.

Question 9

What are the disadvantages of using negotiation?

Answer 9

• It may not be successful, so that other ADR or court proceedings have to be used
• It is not suitable where the parties are very antagonistic towards each other as they will not be prepared to ‘co-operate’ in finding a resolution
• If there are repeated unsuccessful attempts at negotiation, it may prolong the whole issue

Question 10

What are the advantages of using mediation and conciliation?

Answer 10

• The parties are in control and can withdraw from the process at any point. Also a compromise cannot be reached without the agreement of both parties
• The decision need not be a strict legal one sticking to the letter of the law: more based on commercial common sense and compromise
• Makes it easier for companies to continue to do business with each other in the future
• They avoid the adversarial conflict of the court room and the winner/loser result of court proceedings. It has been said that with mediation, everyone wins

Question 11

What are the disadvantages of using mediation and conciliation?

Answer 11

• No guarantee the matter will be resolved, and it will then be necessary to go to court after the failed attempt at mediation. In such situations there is additional cost and delay to resolution
• A successful outcome requires a skilled mediator or conciliator. If skilled qualities aren’t present, mediation can become a bullying exercise in which the weaker party may be forced into a settlement. This is even more likely to happen in conciliation where the conciliator plays an active role in suggesting grounds for compromise or settlement
• Amounts paid in mediated settlements are often lower than the amounts agreed in other settlements, and considerably lower than amounts awarded by the courts

Question 12

What is litigation?

Answer 12

Parties go to court and the judge decides the case