BUSA LECTURE 11 (copy)

Alternative Dispute Resolution (ADR)

• ADR encompasses procedures or devices used to resolve disputes without litigation.

  • Aimed at reducing the time and costs typically associated with traditional court processes.

Goals of ADR

• Cost-Effectiveness

  • ADR is typically cheaper as it requires less time, thereby incurring lower legal fees.

  • Example: Arbitration often resolves disputes within six months, while litigation can take over two years.

• Privacy

  • ADR processes are private, meaning sensitive information remains confidential unlike public court proceedings.

  • Court processes are open to the public, which can lead to exposure of sensitive issues.

• Efficiency for Courts

  • Reduces the number of cases courts must handle, allowing the judicial system to allocate resources more effectively.

Forms of ADR

1. Negotiation

   • Involves parties discussing the dispute directly, seeking mutual agreement or settlement without litigation.

   • Example: Accepting financial compensation to resolve a car accident claim.

   • Successful negotiation typically results in mutual dissatisfaction where each party gives up something.

   • Emphasizes the importance of leverage in negotiations: using incentives ('carrot') versus threats ('stick').

2. Mediation

   • A neutral third party (mediator) assists the disputing parties in reaching a settlement.

   • The effectiveness of mediation largely depends on the mediator's skill and the subject matter expertise.

   • Mediation is voluntary, and parties can walk away if they feel progress is not being made.

   • Important rules:

     • Anything shared in confidence with the mediator remains confidential and cannot be used later in litigation.

     • The focus is on reaching a resolution that minimizes hostility between parties, especially in ongoing relationships.

3. Arbitration

   • Similar to a private trial where an arbitrator makes a binding decision.

   • There are two ways to enter arbitration: voluntarily (before or after a dispute) or involuntarily (court-ordered).

     • Voluntary Arbitration: Binding; parties cannot appeal the outcome after the decision is made.

     • Involuntary Arbitration: If assigned by a court, the losing party may retain the option to appeal the decision.

   • Arbitration's advantages include quicker resolutions and private processes but may lack the ability to appeal decisions, especially in voluntary arbitration.

Ethical Considerations and Power Dynamics

• The imbalance of power can skew outcomes in ADR processes, particularly in employment cases. Employees may lack leverage and the means to gather necessary evidence compared to employers.

• Recent legislation has addressed certain situations like sexual harassment, allowing for litigation irrespective of prior arbitration agreement.

Final Notes on ADR Processes

• ADR plays a significant role in resolving different types of disputes efficiently and effectively, fostering better relationships post-dispute, especially in business contexts.

• Understanding the nature of each ADR form can help parties select the appropriate method for conflict resolution based on their unique circumstances.