Understanding alternative dispute resolution
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Alternative dispute resolution (ADR) is growing massively in the legal sector due to its cost-effectiveness and success rates in comparison to going to court. ADR utilises dispute resolution processes, such as arbitration, mediation and negotiation, to help disputing parties come to an agreement. There are other forms of ADR (eg, conciliation, ombudsman and an in-house complaint procedures) but in this blog post I will give you a brief overview of the forms I have come across the most.
Arbitration disputes are resolved by an impartial arbitrator (or a panel of arbitrators) who is appointed by the parties to make a binding decision. Although the decision is binding, arbitration is voluntary so both parties must agree to it. Arbitration can be useful in disputes which require:
- an understanding of technical aspects of the law (by using a specialist arbitrator);
- a formal structure providing a clear, professional process for quarrelling parties; and
Unlike going to court, arbitration does not involve cross-examination or the swearing of oaths, and the arbitrator will take an inquisitorial approach by asking the parties questions. Many contracts will contain an arbitration clause due to its ability to be an effective dispute resolution process, particularly when it comes to costs.
Mediation is facilitated by an independent, impartial mediator who supports the disputing parties to reach a solution. The mediator will structure the meeting and facilitate communication by helping the parties to identify and communicate their goals, desires and feelings. The mediator will not give legal advice, make suggestions or provide a solution for the parties. The parties will have attended mediation voluntarily (unless court ordered) and will be supported to make a morally binding agreement. The agreement is not legally binding or enforceable; instead, the parties must voluntarily agree to follow the solution.
Mediation has seen great success in the family law and employment law sectors – particularly as it has a focus on maintaining some form of a relationship between the parties, which is crucial when it comes to family and employment matters.
Negotiation is a structured, voluntary and confidential discussion between the disputing parties where they can propose solutions or a settlement figure without prejudice. The negotiation can be more formal than other ADR methods and involve lawyers for one or both parties, alongside the negotiation facilitator. Negotiation involves putting forward suggestions and making concessions to reach an agreement that both parties can walk away from the table (happy?) with. How the negotiation plays out is influenced by the different negotiation styles (eg, competing, collaborating, compromising, avoiding and accommodating), which influence whether an agreement can be reached or how many requests each individual successfully gains over the other.
The subject of negotiation could have its own blog post because of its popularity in academia, the legal sector, the business sector and beyond. Most of us negotiate on a daily basis without realising it, from getting our children to eat their vegetables to negotiating a price for a used car. Negotiation is everywhere and will continue to play an important role in ADR.
Another non-face-to-face area of ADR that is growing is the use of an online ADR platform, such as the European Commission Online Dispute Resolution Platform.
In the retail context, EU consumers of online shopping, which may involve several jurisdictions, can use the European Commission Online Dispute Resolution Platform to seek redress when something has gone wrong with the purchased goods or services. This is subject to limitations, such as the platform using only ADR bodies approved by the national governments and the consumer and trader have to both be based in the European Union, Norway, Iceland or Liechtenstein. However, the ease of use and inbuilt time limits for resolving complaints far outweigh the limitations.
I could continue to type all day as I find ADR fascinating, but I hope this brief insight will help you to have a better understanding of ADR methods.