What is Alternative Dispute Resolution (ADR), and how can it be used to resolve disputes efficiently and effectively?
Have you ever been introduced to the alternative avenue to resolving disputes without resorting to formal litigation? Alternative Dispute Resolution (ADR) refers to ways of resolving disputes between parties that does not involve going to court. This blog provides a comprehensive understanding of ADR, its various methods and how it can be used to resolve disputes efficiently and effectively. Emmy Lovegrove, a Paralegal in the Commercial Disputes and Employment team, explains…
What is ADR?
ADR encompasses a range of processes designed to resolve disputes outside of the traditional court process. It offers a more flexible and collaborative alternative.
There are a variety of ADR processes broadly divided into two main categories:
- A facilitated process where a neutral third party, like a mediator, assists in finding common ground through negotiation.
- An imposed decision where a legally binding decision will be made.
The ADR Process
For ADR to be successful, all parties involved in the dispute must consent to engage in the ADR process.
To initiate the process, an initial meeting with all parties can take place along with the neutral party to outline the ADR process and what to expect. This can also be an appropriate time to establish ground rules, confidentiality agreements and the timetable for the proceedings.
All parties must disclose relevant documentation to the neutral party.
Depending on the nature of the dispute, the parties must agree to the most appropriate method mentioned below.
This is a facilitated process that engages a consensual, informal conversation between the parties which aims to maintain relationships by reaching a compromise. This process can be made more formal by seeking advice from the CAB or a solicitor. It offers the advantage of confidentiality and efficiency, however, the outcome will not be legally binding.
This involves the consensual appointment of a mediator who assists the parties in reaching a compromise in a neutral environment. Mediators act as a ‘go-between’ who facilitate the parties to communicate clearly and amicably. They consult separately with both parties to explore their positions, looking at their needs, seeing the common ground between them to then carry offers to reach an agreed settlement.
Conciliation is similar to mediation in that a neutral third party helps the parties to resolve their dispute. However, the conciliator plays a more active role by suggesting grounds for compromise and a possible basis for settlement. This is a facilitated process that can be made imposed where a legally binding decision is made.
This approach yields a legally binding imposed written decision affording both parties considerable discretion throughout the process, fostering meaningful participation and preserving the relationship. The agreement for arbitration can be established at any point either before or after a dispute arises. Parties have autonomy to select the arbitrator, venue and format. While the award is enforceable by the court, it can also be challenged based on the ground of serious irregularity during proceedings. Despite potential high costs, privacy is upheld.
A new bill has recently been proposed for several amendments to the Arbitration Act 1996. It suggests introducing a duty for arbitrators to disclose circumstances affecting their impartiality and specifying which law underpins arbitration agreements. The bill also seeks to enhance the court’s authority to support emergency arbitrators and make orders related to arbitral proceedings against third parties. Additionally, it extends immunity for arbitrators in specific situations and aims to simplify court procedures associated with arbitration, promoting clarity and reducing delays and costs.
In contrast, adjudication, particularly relevant to the construction industry, offers a rapid resolution within 28 to 42 days. An adjudicator, usually an expert, issues a temporarily binding decision enforceable until the dispute is fully resolved allowing further pursuit if parties remain dissatisfied.
Expert determination, another method, involves an independent expert in a relevant field determining disputes according to predefined terms. The decision imposed, deemed final and binding, hinges on the agreements general meaning within its commercial context.
The parties must reach their own settlement, this can be made legally binding and include anything the parties wish, e.g., a new contract. A final agreement can be submitted to the court for approval and enforcement not restricted to damages, interest, and costs as in a judgment or award.
How long does ADR take?
If you are worried about how long the process will take, mediation usually takes 4 to 6 weeks from the first approach but can be much quicker if so desired.
Why should you use ADR?
The pre-action protocols in civil cases require the parties and their lawyers to actively consider the possibility of settling before coming to court as they may impose an adverse order for payment of costs on a party who unreasonably refuses to use ADR.
The various ADR methods play a central role in providing the parties with an avenue for redress outside of formal litigation as they represent necessary and credible options.
If you want to find out more about how Coodes can help you with an ADR process, visit www.coodes.co.uk or call 0800 328 3282.