ADR

Why is ADR needed?

• ADR reduces the workload of courts, reduces costs and is usually in the interest of the parties

• This is because court cases can be traumatic, costly and take time. This results in unsatisfactory outcomes for parties.

• These can cause consequences such as anger, intimidation and inability for parties to move on or work together in future.

• Court cases can be reported in the press. People may want privacy.

What rules encourage the use of ADR?

The Civil Procedure Rules

What do courts have the power to do where ADR would be more practical?

The power to ‘stay’ proceedings and funding may be denied or restricted

What are the three main types of ADR?

• Mediation

• Conciliation

• Arbitration

Negotiation:

• Resolving the dispute directly with the other party

• Often occurs in the lead up to the court case

• People may get solicitors to do it on their behalf

• It is informal and is quick and cheap for both parties if they are willing to compromise

• If there is no compromise and a need for lawyers it can get expensive

Mediation:

• A neutral third party who facilitates discussion and agreements.

• They consult individually to establish any common ground

• Take offers back and forth and report back

• Mediator does not give own opinion, unless they are asked

• They can run a settlement conference to make a decision more likely.

Special Mediation Services:

• The Centre for Dispute Resolution

• Local Services - Such as the South West Mediation Service

• Online Mediation Services

Conciliation:

• Similar to mediation but the neutral third party plays a more active role.

• They suggest areas for compromise and a basis for settlement.

What organisation provides trained and experienced conciliators for industrial disputes?

ACAS - The Advisory Conciliation and Arbitration Service

Advantages of mediation and conciliation:

• It is usually cheaper than courts

• Less formal as doesn’t follow the strict letter of law

• Encourages co-operation and avoids adversary behaviour

• They have a high success rate - 80% are resolved

• Agreements are more likely to last as a compromise can mean ‘everyone wins’

• Both parties are in control and can choose the method of mediation

• They help maintain working relationships

Disadvantages of mediation and conciliation:

• There is no guarantee that the dispute will be resolved

• It can be a waste of time and money if parties are not willing to co-operate

• Settlements are often considerably lower than those awarded by court

• Agreements cannot be enforced, no pressure to stick to them

• Mediation can turn into a bullying exercise as the weaker party may not stand up for its own rights

What is arbitration?

• The parties agree (usually in writing) to settle their claims by a private person, not a judge.

• This is governed by the Arbitration Act 1996

• Many contracts have a Scott v Avery clause which stipulate that, if there is a dispute it should be dealt with by Arbitration

How does arbitration work?

• Arbitrator is chosen by nominated parties or from the Institute of Arbitrators

• There can be a panel of up to 3 but defaults to 1 if the number is not specified

• Parties choose between Paper Arbitration where all evidence is sent to the arbitrator and there is no hearing or a hearing with oral submissions and witnesses.

• The decision by the arbitrator is called the award and binds the parties and can be enforced by law.

Advantages of arbitration:

• Parties have control over the arbitrator, procedure, time and place

• Ideal if the parties cannot compromise

• Can use legal or technical experts

• It is flexible and private so can be cheaper than courts

• The award can be enforced by courts

Disadvantages of arbitration:

• The parties can be unequal.

• Technical Experts cannot deal with unexpected legal questions.

• Formal hearings are expensive

• Rights of appeal are limited and the award is binding