Alternative Dispute Resolution (ADR)
What it is and why use it?
- ...and you can still go to court if it fails
Since Lord Woolf’s reforms of the civil justice system ADR will play an increasingly large role in disputes. This is because the new Civil Procedure Rules say that it is the court’s duty in managing cases to encourage parties to use ADR. If a party fails without good reason to try ADR before using court proceedings he may be asked to pay EXTRA costs to the court.
Why might courts not be the best way to settle things?
- Some disputes hinge on technical points rather than legal points
- An ordinary judge may not be the best person to deal with it, using expert witnesses raises costs and takes time
- If you use ADR, these experts can take the place of the judge
- Fixed rules in a courtroom may not be suitable for your particular dispute
- ADR allows the concerned parties to take control of the process
- The majority of court hearings are in public - a business may not want this
- Important trade secrets may arise in the hearing and this could cause problems if the public hears them - you can keep your details private with ADR
As most disputes are settled before trial anyway, often at the courtroom door after spending a lot of time and money trying to resolve it; why not settle sooner rather than later. If you try ADR you can still keep the right to use the formal court system if you are not happy with any outcome.
There are two types of ADR: Negotiation and Mediation
Negotiation is where you and the other party negotiate directly with each other. It's private, quick and cheap because no lawyers are involved, although you can involve them if necessary.
Mediation is where a neutral mediator agreed upon by both parties helps them to reach a compromise situation. The mediator will explore the positions of both parties and carry offers from one party to the other whilst maintaining confidentiality. The mediator will not reveal their own views, but may be asked for an opinion.
There are two distinct strands of mediation:
Mediation is not a substitute for legal advice but it reduces conflict and helps people to make their own decisions. It also helps people test how realistic their proposals are.
Civil and Commercial mediation
There is an increasing number of commercial mediation services. The foremost of these is the Centre for Dispute Resolution (CDR), this is based in London and is aimed at large disputes. Lots of big London law firms are members of the CDR and it helps to save thousands of pounds in court costs - a mediator costs £1,000-£1,500 whilst litigation may cost over £100,000. The CDR claims to solve 80% of its cases - even if not solved, the issues are cleared up so that when the parties do go to court it will not take as long.
Resolving Smaller Disputes (e.g. neighbor disputes)
West Kent Independant Mediation Service - free to use. Used for noise, car parking, dogs and boundary fence disputes. It's run by trained volunteers who don't take sides and don't make judgements on the rights or wrongs of an issue. The volunteers will visit the party who made the complaint to hear their side of the story and then visit the other party to hear their side. If both parties are willing, the volunteer then arranges a meeting between them in a neutral place. The parties are in control and can withdraw from the mediation process at any time.
Formalised Settlement Conference (mini trial)
This is a more formal method of mediation, like a mini trial. It is based on commercial common sense and compromise and avoids the adversarial conflict of a courtroom. It makes it easier for companies to continue doing business with each other in the future. Both sides present their case to a panel composed of a decision making executive from each party plus a third neutral party. If these executives cannot agree then the neutral advisor will act as a mediator between them.
Research into mediation shows that:
- Even if mediation did not solve the dispute, parties were more likely to settle without going to court
- It can promote an early settlement
- No allocation of blame so they can still trade with each other - the relationship is still in tact.
- Amounts paid in mediated settlements were lower than those awarded by the courts
- Mediation is often controlled by the mediators instead of the parties (it is important to have an experienced and competent mediator)
NB: This writeup applies to English law.
Albert Herring adds: Vast amounts of this stuff going on in various bits of the EU; have translated much turgid material on the subject. Eurochambres are big on it. The writeup is anglocentric at the beginning.
Source: My knowledge as an English law student