Alternative Dispute Resolution

• ADR:

  • Good way of avoiding going to court to resolve civil law matters
  • Are 4 methods of ADR which we will look at
  • Vary in levels of formality, cost, and strength of outcomes.
  • Usually completely optional and parties can always decide to drop out and take their case to court instead.
• Why not courts:

  • Too expensive - court fees plus legal fees plus potential costs from the other side if you lose.
  • Too slow - cases can take months to get to court
  • Too rigid - the courts are bound to follow the rule of precedent when making their decisions. Are also lost of formalities in the courtroom to follow.
  • Too intrusive - questioning can be invasive
  • Too public - many businesses will want to keep these matters private.
• Binding decision - is when an agreement between the parties is set in stone. Failure to follow the terms of a legally binding agreement can result in court action.
• Third Party - someone who is not involved in the dispute/ disagreement. Usually completely unknown by the parties and independent from them.
• Dispute - disagreement between two parties
• Parties - people or businesses involved in a dispute
• Methods of ADR:

  • Arbitration
  • Mediation
  • Conciliation
  • Negotiation
• Arbitration:

  • Arbitration Act 1996, s.1
  • Decision is made by a Third Party Arbitrator (or panel)
  • Acts like a judge
  • Has legal and Specialist knowledge
  • Independent of the parties
  • Sometimes chosen by name by the parties
  • Charges a fee 9usually very expensive)
• Arbitration - process:

  • parties choose to go to arbitration, sometimes as contract between them requires it.
  • Arbitrator is appointed (either named in contract or process to appoint one is explained in contract)
  • Both parties present their case to arbitrator separately
  • Can be by way of a report in a 'paper hearing' but can be in person like a hearing or on Teams
  • The arbitrator then considers each side and makes a decision
  • This decision is binding and there aren't automatic rights to appeal it.
• Arbitration:

  • Types of cases:
  • Used most frequently with commercial contracts between business.
  • Where a contract includes a Scott v Avery clause (which is common in business agreements), the court will refuse to look at a case until it has been through arbitration first.
  • Private
  • Means it is often used by businesses who want to keep disputes out of the media
• Arbitration:

  • Legally Binding decisions are made:
  • Can only be appealed for irregularity (e.g. bribery) OR if the arbitrator is shown to have interpreted the law incorrectly.
  • The hearing is set at a time and place to suit the parties:
  • Or can be all done through paper/ electronic reports with no need for a fixed meeting.
• Advantages of Arbitration:

  • Parties can chose their arbitrator
  • Procedure up to the parties
  • Privacy
  • Award is binding
  • Arbitrator is an expert
• Negatives of Arbitration:

  • Appeals restricted
  • No legal professional
  • Can be expensive
  • Precedent does not apply
• Mediation:

  • Uses a third party mediator:
  • Qualified professional mediators
  • Main role is to help communication
  • Helps the parties to define their issues
  • Acts as a messenger if parties cannot be in the same room together
  • Is NOT allowed to give advice to either party.
• Mediation - process:

  • The parties agree to meet with a mediator at a specific appointment time
  • The parties and the mediator sit together and discuss their issues
  • The aim is for the parties to agree on a compromise
  • If they do agree, they can sign a legally binding agreement
  • However, if they do not agree, no decision is made
• Mediation:

  • Types of cases:
  • mostly commonly used for divorce and child custody issues
  • Family Law Act 1996 requires this before court hearings
  • neighbour disputes may also use mediators or disputes between colleagues at work.
  • Private/ neutral setting
  • Mediator fee payable:
  • up to £425 for 4 hour session
  • Legally binding IF an agreement is reached
  • parties can decline to sign an agreement which leaves them without a remedy
• Advantages of Mediations:

  • Cheap
  • Reflects interests of parties
  • Preserves relationships
  • Legal agreement binding if reached
• Disadvantages of Mediation:

  • Not legally binding if no agreement reached
  • Not useful where parties are entrenched
  • Too informal
  • Imbalance of power.
• Conciliation:

  • Uses a Third Party Conciliator:
  • very similar to mediator
  • only difference = a conciliator CAN and WILL give advice to the parties and suggest what terms they should agree to
• Conciliation - process:

  • The parties agree to meet with a conciliator at a specific appointment time (Sometimes via conference call or in person)
  • The parties and the conciliator sit together and discuss their issues
  • The conciliator will suggest the terms that the parties should agree to
  • If the parties agree to those terms, they can sign a legally binding agreement.
  • However, if they do not agree, no decision is made.
• Conciliation:

  • Types of cases:
  • Industrial Disputes/ Employment Issues (employer & employee)
  • ACAS = Advisory, Conciliation and Arbitration Service
  • Private/ neutral setting
  • Conciliator fee may be payable
  • Usually an hourly rate (but not for ACAS)
  • Legally binding if parties agree to conciliator's suggestions
• Advantages of Conciliation:

  • Conciliator usually an expert
  • Private
  • Flexibility
  • Conciliator can give advice
• Disadvantages of Conciliation:

  • Not legally binding if no agreement reached
  • Too informal
  • Imbalance of power
  • No appeals or legal aid
• Negotiation:

  • Involves no required Third Parties
  • Negotiation can be completely informal
  • Where the two parties discuss their issues and reach a compromise
  • Can be done by telephone, email, or face to face
  • Or can be through any method of communication electronic or in person
• Negotiation:

  • Some Negotiations can be more formal
  • Sometimes parties will hire lawyers to negotiate for them
  • This is mostly used by businesses
  • Types of cases:
  • Any
  • Probably every civil law issue beings with negotiation - although not all manage to get resolved this way.
• Negotiation:

  • Is common for negotiation in civil court cases to continue even up to the door of the court room.
  • If an agreement on paying compensation is made between the parties (instead of being ordered by the court). It is called a settlement
  • There is no fixed procedure for negotiation
  • There can be no costs at all - unless parties hire lawyers to represent them
  • In which case an hourly fee applies (and can get very expensive)
• Advantages of Negotiation:

  • Completely private
  • Quick resolution
  • Maintain relationships
  • Informal
• Disadvantages of Negotiation:

  • Can be costly is lawyers are used
  • Often agreements made right before court
  • Inequality of bargaining power
  • Seen as half way house