Alternative dispute resolution, commonly referred to as ADR, is growing in popularity as a means of resolving disputes between parties. It involves training, which many lawyers now have, in techniques for disagreeing parties to come to an agreement that avoids litigation. It is, therefore, an alternative to the traditional route of resorting to the courts.
This form of redress can be used from simple disputes to more complex commercial cases. The procedure is there so it is clearly an alternative worthy of consideration for commercial disputes.
ADR is an umbrella term that encompasses a number of different forms of non-litigious dispute resolution. Two of the most common forms of ADR are arbitration and mediation.
In arbitration a neutral third party, known as an ‘arbitrator’, imposes a legally binding resolution on the parties involved. Although parties may appeal arbitration outcomes to the court, such appeals face an exacting standard of review.
In mediation the neutral third party, known as a ‘mediator’, facilitates the resolution process (and may even suggest a resolution, typically known as a ‘mediator’s proposal’) but does not impose a resolution on the parties. The terms of the agreement are decided upon by the parties involved. Generally, decisions made in mediation are not legally binding, unless both parties agree to it.
Arbitration, especially, has always been available but I think there was a preference even among lawyers to take the litigation route rather than arbitration or mediation. But that thinking has changed radically in recent years and you only have to look at law firms’ websites to see ADR is often offered as part of their services. An increasing number of lawyers, and indeed other professionals too, are trained in ADR. ADR has gained widespread acceptance among both the general public and the legal profession so a lawyer will not be annoyed if you suggest taking this route as a possibility.
The ADR procedure is more ‘friendly’ too than the austere surroundings of a courtroom. Litigation lawyers are comfortable in the latter as it is where they work, but litigants can often find the courts intimidating and unnerving. This obviously can have an impact on how they give evidence and could affect the outcome of a case. Think about it. You have spent months, even years, in painstakingly putting your case together and then your day in court arrives. You are out of your comfort zone in the courtroom, in surroundings unfamiliar to you. The dress code and the language are foreign to you. You have a long wait for your case to come up: that wait could be days. The lawyers follow the practice and procedure of the system – a puzzle to the layman. There are last minute changes. Unless you are from another planet this has to unsettle you in some way.
The ADR process is miles away from the litigation process. The third-party arbitrator or mediator is chosen by the parties. The hearing days are agreed and are not confined by any rules or vacation periods. Sitting times are like office hours. It’s all very business-like, which allows the parties to relax in a way that is not possible in courtroom litigation.
Litigation through the courts system is slow and one of the contributing reasons for that is the number of cases listed before the courts. ADR can reduce the pressure on the court system while benefiting both litigant and defendant through reduced costs, giving them control over who is the adjudicating party, an informal setting and greater privacy due to the confidentiality of the process.
There is a move that in some proceedings the courts now require parties to try mediation, and only if that fails do they allow the parties’ case to be heard in court.
In taking a case to a solicitor litigation may be in your mind but there are other options than just the litigation route. Most litigation cases are settled so it is worth exploring arbitration or mediation before issuing proceedings. Clients have more control over, or input into, the final resolution in mediation than through litigation. Arbitration is similar to litigation except it is done in private and in a more informal atmosphere. It is also faster than litigation as when your case is heard is not dictated by law terms or where your case is ‘in the list’.
In arbitration you can still have your solicitor representing you so the process is quite similar to court litigation but there are procedural differences. You can agree with the other side who the arbitrator will be, whereas there is no such control in the courts system. Papers are exchanged between the parties as in the litigation proceeding but the procedure is agreed by the parties. The parties can send in written submissions and the arbitrator makes their ruling without meeting the parties. Or, there can be a hearing with evidence taken.
The ruling of the arbitrator is binding on both parties and consequently enforceable; there are some narrow exceptions to this but generally once you embrace the arbitration route the decision will have the same impact as that of a judge. In mediation the parties themselves come to an agreed resolution. The decision is not legally enforceable unless the parties agree to make it so.
In relation to costs, in typical litigation when a party loses the other side claims that costs follow the event and there is a specific rule of the courts that provides that the party who has failed to succeed with their case is liable for the legal costs of the other side. In arbitration, a typical order with regard to costs would follow what happens in the courts. However, an arbitrator has considerable discretion with regard to how they might award costs.
Your solicitor can advise whether they think an alternative to court litigation is best for your case and this should be raised at the initial meeting as an option.
Arbitration and mediation are growing in popularity and most law firms are engaging in these processes. They are certainly worth exploring to see if they benefit your problem.
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