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Alternative Dispute Resolution (ADR) is an umbrella term referring to different methods of resolving legal disputes without having the matter determined in Court. ADR has become much more prominent in Western legal disputes in recent decades for a number of reasons, including that, if effectively utilised, ADR methods can drastically reduce legal costs.
As ADR can effectively be used to resolve disputes without having to engage in a lengthy legal battle, this may also free up other legal resources and allow additional Court time for more complex, entrenched, and serious disputes.
ADR processes broadly involve the parties involved in a dispute engaging in discussions and negotiations with the aim of coming to an agreement about how to resolve the dispute. Some ADR processes are better suited to resolving disputes than others. Mediation and arbitration are among the most common ADR methods.
Many contracts include specific provisions that outline a preferred or required ADR process that the parties will need to engage in before any party is able to bring a matter to Court. Additionally, Courts will usually require the parties to attempt some form of ADR before the matter will be allowed to go to trial.
Resolving a dispute through ADR rather than going to Court has a number of advantages in addition to reducing costs. ADR is a much more flexible process than Court procedures and is not limited by the strict rules of evidence. ADR is also likely to be confidential, meaning that negotiations that take place for ADR purposes cannot be used later to benefit one of the parties to the dispute.
Mediation is one of the more informal types of ADR methods available. The parties to the dispute meet together to discuss their dispute and attempt to arrive at a comprise or agreement in order to settle the issue with the help of an independent person commonly referred to as the mediator. The mediator will generally make comments or observations about the strength and weaknesses of each party’s case during the mediation; however, the mediator is not able to make a decision about the outcome of the dispute. They are only there to facilitate the mediation.
Mediations are commonly used in:
However, this list is far from exhaustive. Mediation can be a good option for parties involved in any form of dispute in order to minimise legal fees and increase the chances of reaching an early settlement.
There are several different variations of the procedures used in mediations depending on the type of dispute that is being mediated. However, the usual concept of mediation is a structured process in which the mediator helps the parties to negotiate their own solution to their dispute by assisting them to:
How the mediation proceeds will be determined by the mediator and may vary depending on the type of dispute being mediated. For example, in a dispute involving interpersonal elements, the mediator might request that the parties should not be in the same room during the mediation. The mediator will then go back and forth between the parties in separate rooms and communicate between them. This is known as ‘shuttle mediation’.
If the parties are able to come to an agreement, the mediator will make a record of the agreement and distribute a copy of the record to each party and, if necessary, to the Court. It is important to note that an agreement reached in mediation is not legally binding. However, the parties will normally redraft the agreement into a binding contract upon receiving advice from their respective lawyers and/or other professional advisors.
Arbitration is one of the more formal types of alternative dispute resolution methods available. Arbitration involves one or more third parties (the arbitrator(s)) acting as the judicial party in the hearing of the dispute. The arbitrator will invite the parties to divulge the differences that have arisen between them in order to assess each party’s legal rights in the circumstances. The arbitrator will then make a decision that will be legally binding on the parties to the dispute.
Arbitration is much more akin to the actual Court process than mediation; however, arbitration still affords a degree of flexibility and accessibility compared to bringing a claim in Court.
Arbitration is more often used in disputes involving large:
You will often hear of arbitration being used to resolve disputes internally within large organisations, such as sports codes. It is particularly useful in circumstances where the subject matter is highly technical or where the parties seek greater confidentiality than would be available to them in open Court.
Arbitration shares a number of similarities to Court processes. The parties will appear before the arbitrator and present their case. The arbitrator will then make a binding decision which will affect the parties. The enforceability of an arbitrator’s decision comes from the fact that the parties will often agree to resolve a dispute at arbitration (often through a clause in a contract that is the subject of the dispute), and following the arbitration, the parties will then abide by the decision of the arbitrator.
Some of the difference between arbitration and mediation include:
If you believe that alternative dispute resolution may be of assistance to help you resolve your dispute with another party, or you require representation in an alternative dispute resolution process, we are here to assist you. Contact one of our experienced solicitors at Gibbs Wright Litigation Lawyers today.
Whether or not mediation, arbitration or another form of ADR may be a suitable alternative to resolve a dispute you have with another party will depend on a variety of factors, including the nature and complexity of the dispute, the parties’ willingness to cooperate to resolve the dispute, the impact of contractual clauses and a myriad of other factors that could vary significantly depending on the circumstances of your particular case.
Even though ADR processes are generally considered an easier and more accessible alternative to Court proceedings, it is vital that you obtain proper legal advice before engaging in any ADR process in order to ensure you are protecting your rights at all times, as well as maximising your chances of achieving the best possible outcome for you in the circumstances.
If you are involved in a dispute and want advice, assistance or representation in relation to an alternative dispute resolution process, Gibbs Wright Litigation Lawyers have the skills and experience required to assist you at any stage of the process. Contact one of our solicitors at Gibbs Wright Lawyers today for a free and confidential consultation to explore your legal rights and options.