Alternative Dispute Resolution
The text describes each section of the ADR processes. The green text indicated an advantage to the aforementioned procedure and the red highlights the negative and various problems that could hinder progress. The next section shows the comparison and differences between using ADR and litigation.
The main methods of ADR are:
Negotiation
Negotiation involves direct communicating between two parties. Settlements out of court can be reached by negotiation and can be done without solicitors. If an agreement cannot be reached then they can introduce solicitors to speak on behalf of the parties involved. The solicitors then will try to negotiate a settlement and use their expert knowledge.
Advantages and Disadvantages
Negotiation can be completely private and involve nobody of the public.
Because of the privacy, some cases which parties want to keep private to save their reputation can go unheard - perhaps of public importance to know about?
Generally the negotiation procedure can prevent courts from being busy with trivial cases that could be dealt with elsewhere
There can be a cost element included when the introduction of solicitors appears
The ADR method is cheaper than court, which has standard costs for one day.
Mediation
This is the situation where a ‘middle man’ helps the two parties, so an external party helps to reach an agreement. Mediators need to check how much common ground there is for both parties. They explore the positions for parties. He acts as a facilitator and will not ever gives their opinion on the situation. The mediator can be asked for the merits of the situation which can move towards arising at a end to the dispute. It is only hopeful if the parties have hope that they can co-operate and agree.
Advantages and Disadvantages
The parties are in control and make the decisions at the end of the interactions
As it involves an external person not included in the party, there could be an extra cost
The party can choose which method they want and there is more than one method available which can be helpful
The person mediating can maybe be biased without signalling an interest - they may not be completely independent
This can allow companies to work together again in the future and can include content about contracting together in the future
This agreement is not binding
Conciliation
A neutral party helps to solve the dispute, similarly to mediation, however the conciliator plays a more active role. The conciliator suggests grounds for compromise and for areas to move this dispute, and the possible basis for a settlement. There are areas where ACAS can get involved, such as industrial disputes. however, like mediation, the agreement may not be able to be reached so therefore the parties may go to the court in the end anyway.
This agreement is not binding
More pragmatic - the conciliator has an active role and has expert experience in this area where they can offer their advice with expertise in their field.
They may not necessarily be successful as the parties both need to agree - if this does not happen then the parties will have to go to court
Much cheaper than going to court so that the parties do not lose too much financial backing
Time consuming - companies can lose money day by day by having to wait for a contract to go through
Arbitration
There are two different processes under this category - the courts use an informal setting. This is the proceedings of the Commercial Court of the Queen’s Bench Division. The second is where the two parties submit their claims to private arbitration. This is therefore submission of their claims and application for the decision to be made of arbitration by someone other than a judge. The way in which the arbitration is carried out is left almost entirely in the hands of the parties to decide.
The arbitrator makes the decision in this case. The parties can decide at any point to go to arbitration to deal with the situation.
In contracts where you cannot go to court, you have to go to ADR first before you can go to court. This is known as the Scott v Avery clause. This clause states that the case will be settled by arbitration and not by litigation. This is always agreed to beforehand so that no party can decide on the case afterwards to go to court.
The Arbitration Act 1996 means that courts will normally refuse to deal with a case before it has been attempted to be dealt with in arbitration. This is if there was an arbitration clause in the contract. In consumer situations, you can get small claims track or by the planned arbitration.
Arbitration can be made after the dispute arises. It is increasingly popular in commercial cases because it is much better than court disputes.
s.15 Arbitration Act 1996 states that the parties are free to agree on the number of arbitrators; there can be a panel or one arbitrator. If they cannot agree then the Act determines that only one arbitrator should be appointed.
Most agreements to go to arbitration will either name an arbitrator or provide a method of choosing one. In commercial contracts, it is often provided that the president of the appropriate trade organisation will appoint the arbitrator.
There is an Institute of Arbitrators, which provides trained arbitrators for major disputes. They can have expertise in their field which is why they are often chosen and if there is no agreement on who or how to appoint, then the court can be asked to appoint as a last resort.
The hearing is left to the agreement of the parties in each case, so that there are many forms of hearing. They can opt for a paper arbitration, where two sides put all the points they wish to raise into writing and submit this, together with any relevant documents, to the arbitrator. he will then read all the documents, and make this decision.
They can submit all their work and such and then make an oral submission to the arbitrator to support their case. Witnesses can be called to give evidence and if they give oral then they don’t need to be given on oath. If parties wish, then the witness can be asked to give evidence on oath and it can be formal. If called, then the Act 1996 allows the use of court proceedings to ensure attendance.
The time date etc. all matters depending on the consultation with the arbitrator. This gives a degree of flexibility to the proceedings; the parties can choose which is most convenient. The decision made is an award and is binding on the parties. The decision is usually final and it can be challenged in courts on a serious irregularity and on a point of law.
The parties may choose their own arbitrator, and decide on a strong technical expert in that field
An unexpected legal point can arise which is not suitable for a non-lawyer arbitrator
The hearing time and place can be arranged to suit the parties which can be helpful around their busy schedules, for example in commercial settings.
If a professional arbitrator is used, his expenses can be high and the costs can increase.
The actual procedure used is flexible and the parties can choose the suited situation.
The rights of appeal are limited to points of law; difficult to get further and challenge the decision
The award is final and can be enforceable, giving the judgement some meaning and emphasis.
If they opt for an open hearing, then the dispute can become expensive.
The dispute is quicker than a court hearing.
The sheer amount of bureaucracy in a case can cause big delays for commercial and international arbitration and can be just an complicated as a court if lawyers and professional arbitrators are used.
Comparing Courts and ADR
Tribunals
these operate alongside the court system and are very important part of the legal system. They were created to allow people a method of enforcing their social rights. The tribunal must be used instead of court proceedings, as opposed to the situation where ADR is chosen in favour over the court systems.
The tribunal’s role includes enforcing rights to individuals or parties in certain situations:
Supreme Court
Court of Appeal
Upper Tribunal
First Tier Tribunal - they deal with 300,000 cases a year, with nearly 200 judges and 3,600 lay members. There is also the Employment Tribunal in this area, which is expected to soon become part of the First Tier Tribunal.
The Upper Tribunal is divided into four chambers. There is a further appeal chance to the CoA and Supreme Court is necessary.
First Tier Tribunals are heard by a tribunal judge. In certain cases, two lay magistrates may sit with the judge to determine the outcome. In Employment tribunals there are two lay people, who are usually from the employee’s organisation and the employer’s organisation.
Both sides have a chance to put forward their side of the dispute. This can be done formally in a court setting, and only a few of these cases are offered funding.
Advantages of Tribunals
Disadvantages of Tribunals
The text describes each section of the ADR processes. The green text indicated an advantage to the aforementioned procedure and the red highlights the negative and various problems that could hinder progress. The next section shows the comparison and differences between using ADR and litigation.
The main methods of ADR are:
- negotiation
- mediation
- conciliation
- arbitration
Negotiation
Negotiation involves direct communicating between two parties. Settlements out of court can be reached by negotiation and can be done without solicitors. If an agreement cannot be reached then they can introduce solicitors to speak on behalf of the parties involved. The solicitors then will try to negotiate a settlement and use their expert knowledge.
Advantages and Disadvantages
Negotiation can be completely private and involve nobody of the public.
Because of the privacy, some cases which parties want to keep private to save their reputation can go unheard - perhaps of public importance to know about?
Generally the negotiation procedure can prevent courts from being busy with trivial cases that could be dealt with elsewhere
There can be a cost element included when the introduction of solicitors appears
The ADR method is cheaper than court, which has standard costs for one day.
Mediation
This is the situation where a ‘middle man’ helps the two parties, so an external party helps to reach an agreement. Mediators need to check how much common ground there is for both parties. They explore the positions for parties. He acts as a facilitator and will not ever gives their opinion on the situation. The mediator can be asked for the merits of the situation which can move towards arising at a end to the dispute. It is only hopeful if the parties have hope that they can co-operate and agree.
Advantages and Disadvantages
The parties are in control and make the decisions at the end of the interactions
As it involves an external person not included in the party, there could be an extra cost
The party can choose which method they want and there is more than one method available which can be helpful
The person mediating can maybe be biased without signalling an interest - they may not be completely independent
This can allow companies to work together again in the future and can include content about contracting together in the future
This agreement is not binding
Conciliation
A neutral party helps to solve the dispute, similarly to mediation, however the conciliator plays a more active role. The conciliator suggests grounds for compromise and for areas to move this dispute, and the possible basis for a settlement. There are areas where ACAS can get involved, such as industrial disputes. however, like mediation, the agreement may not be able to be reached so therefore the parties may go to the court in the end anyway.
This agreement is not binding
More pragmatic - the conciliator has an active role and has expert experience in this area where they can offer their advice with expertise in their field.
They may not necessarily be successful as the parties both need to agree - if this does not happen then the parties will have to go to court
Much cheaper than going to court so that the parties do not lose too much financial backing
Time consuming - companies can lose money day by day by having to wait for a contract to go through
Arbitration
There are two different processes under this category - the courts use an informal setting. This is the proceedings of the Commercial Court of the Queen’s Bench Division. The second is where the two parties submit their claims to private arbitration. This is therefore submission of their claims and application for the decision to be made of arbitration by someone other than a judge. The way in which the arbitration is carried out is left almost entirely in the hands of the parties to decide.
The arbitrator makes the decision in this case. The parties can decide at any point to go to arbitration to deal with the situation.
In contracts where you cannot go to court, you have to go to ADR first before you can go to court. This is known as the Scott v Avery clause. This clause states that the case will be settled by arbitration and not by litigation. This is always agreed to beforehand so that no party can decide on the case afterwards to go to court.
The Arbitration Act 1996 means that courts will normally refuse to deal with a case before it has been attempted to be dealt with in arbitration. This is if there was an arbitration clause in the contract. In consumer situations, you can get small claims track or by the planned arbitration.
Arbitration can be made after the dispute arises. It is increasingly popular in commercial cases because it is much better than court disputes.
s.15 Arbitration Act 1996 states that the parties are free to agree on the number of arbitrators; there can be a panel or one arbitrator. If they cannot agree then the Act determines that only one arbitrator should be appointed.
Most agreements to go to arbitration will either name an arbitrator or provide a method of choosing one. In commercial contracts, it is often provided that the president of the appropriate trade organisation will appoint the arbitrator.
There is an Institute of Arbitrators, which provides trained arbitrators for major disputes. They can have expertise in their field which is why they are often chosen and if there is no agreement on who or how to appoint, then the court can be asked to appoint as a last resort.
The hearing is left to the agreement of the parties in each case, so that there are many forms of hearing. They can opt for a paper arbitration, where two sides put all the points they wish to raise into writing and submit this, together with any relevant documents, to the arbitrator. he will then read all the documents, and make this decision.
They can submit all their work and such and then make an oral submission to the arbitrator to support their case. Witnesses can be called to give evidence and if they give oral then they don’t need to be given on oath. If parties wish, then the witness can be asked to give evidence on oath and it can be formal. If called, then the Act 1996 allows the use of court proceedings to ensure attendance.
The time date etc. all matters depending on the consultation with the arbitrator. This gives a degree of flexibility to the proceedings; the parties can choose which is most convenient. The decision made is an award and is binding on the parties. The decision is usually final and it can be challenged in courts on a serious irregularity and on a point of law.
The parties may choose their own arbitrator, and decide on a strong technical expert in that field
An unexpected legal point can arise which is not suitable for a non-lawyer arbitrator
The hearing time and place can be arranged to suit the parties which can be helpful around their busy schedules, for example in commercial settings.
If a professional arbitrator is used, his expenses can be high and the costs can increase.
The actual procedure used is flexible and the parties can choose the suited situation.
The rights of appeal are limited to points of law; difficult to get further and challenge the decision
The award is final and can be enforceable, giving the judgement some meaning and emphasis.
If they opt for an open hearing, then the dispute can become expensive.
The dispute is quicker than a court hearing.
The sheer amount of bureaucracy in a case can cause big delays for commercial and international arbitration and can be just an complicated as a court if lawyers and professional arbitrators are used.
Comparing Courts and ADR
- ADR is usually cheaper than courts because in civil areas which involve a judge involve paid salaried staff members
- Arbitration is the most expensive but is usually cheaper than litigation
- ADR is usually quicker than litigation because the meetings can be arranged where everyone can meet and the agreement can leave out lots of legal proceedings. If prepared for properly, the notes and documents can be gathered to deal with in one day.
- An agreement can only be reached if both parties agree to the outcome - a court setting does not have to have an agreement.
- In ADR, there is a degree of compromise, where a legal case can be where one party loses completely and the other wins their claims.
- Courts can leave parties very bitter because of the win/lose style of an adversarial case. ADR can avoid this bitter ending and can allow parties to keep on contracting with each other.
- The courts are public - they are open to everyone to see and given transparency to the legal procedure. They can prevent out of court settlements which would indicate a potential big fall down on the behalf of one party. Every man is entitled to his day in court.
Tribunals
these operate alongside the court system and are very important part of the legal system. They were created to allow people a method of enforcing their social rights. The tribunal must be used instead of court proceedings, as opposed to the situation where ADR is chosen in favour over the court systems.
The tribunal’s role includes enforcing rights to individuals or parties in certain situations:
- the right to mobility allowance for those too disabled to walk for a short distance;
- the right to payment if one is made redundant from work;
- the right to not be discriminated against in regards to sex, race, gender, age or disability;
- the right for immigrants to have a claim for political asylum heard.
Supreme Court
Court of Appeal
Upper Tribunal
First Tier Tribunal - they deal with 300,000 cases a year, with nearly 200 judges and 3,600 lay members. There is also the Employment Tribunal in this area, which is expected to soon become part of the First Tier Tribunal.
The Upper Tribunal is divided into four chambers. There is a further appeal chance to the CoA and Supreme Court is necessary.
First Tier Tribunals are heard by a tribunal judge. In certain cases, two lay magistrates may sit with the judge to determine the outcome. In Employment tribunals there are two lay people, who are usually from the employee’s organisation and the employer’s organisation.
Both sides have a chance to put forward their side of the dispute. This can be done formally in a court setting, and only a few of these cases are offered funding.
Advantages of Tribunals
- These are usually cheaper
- Quicker than going through court proceedings; usually can be dealt with in a day.
- more informal and relaxed atmosphere which gives less pressure
- more opportunity to represent oneself which means a solicitor can be left out of the proceeds
- experts of the area are used and allows for their knowledge to be used efficiently to give a fairer outcome then a court hearing.
Disadvantages of Tribunals
- There is a lack of funding for these cases - public funding is lacking in these areas and can put the applicant at a weaker position then a well financed company that they may be challenging.
- More formal than ADR - this can be more challenging for quieter characters.
- Delay - they are quicker proceeds but the fact that there is a huge amount of cases going through the system , there can be a delay for the case to be heard.