Alternative Dispute Resolution

Negotiation

Parties reach agreement themselves with no third party. May use solicitors or unqualified representatives.

Possible forms of negotiation – face to face, using telephone, email or conference calls.

The process – continued talking / contact until resolution made or fails.

Successful outcome is agreement which is enforceable if the parties formally agree.

Mediation

Neutral person helps parties reach a compromise solution acting as a facilitator.

Mediator does not offer an opinion unless asked – third party plays a passive role.

Compulsory for small claims cases and often used in relationship situations, e.g. Relate

Both parties have control over the resolution process and may withdraw at any time.

A resolution to the dispute cannot be imposed on them as they must agree to it.

Formalised settlement conference is another method of approaching mediation – mini trial but no binding results.

Centre for Effective Dispute Resolution deals with companies and more local mediation services deal with disputes between neighbours. 80% of cases referred to CEDR are settled.

Conciliation

Neutral person helps parties reach a compromise solution

Conciliator goes beyond mediation (takes an active role) in that they have the power to suggest grounds for compromise or a settlement.

Used in industrial disputes, e.g. ACAS in employment law.

Both have control over the resolution process and may withdraw at any time.

A resolution to the dispute cannot be imposed on them as they must agree to it.

Arbitration

Both parties voluntarily agree to let an arbitrator (neutral 3rd party) or panel of arbitrators decide.

Agreements to arbitrate are governed by the Arbitration Act 1996 and are usually in writing.

Agreement to go to arbitration can be made before a dispute arises, usually by a “Scott v Avery clause” in a contract.

Agreement will either name an arbitrator or provide a method for choosing one. A court may also appoint an arbitrator.

Parties agree the procedure for hearings and this ranges from a “paper” arbitration to a formal court-like hearing.

Arbitration awards are binding on the parties and can be enforced in the courts if necessary. An award by an arbitrator can be challenged in the courts for serious irregularity in the proceedings or on a point of law.

Illustrations of situations where arbitration is used include building contracts, holiday contracts and as a result of various other business contracts.