Introduction to Alternative Dispute Resolution
by Paige Chapman, LLB student and Employability Ambassador at ULaw
Alternative Dispute Resolution (ADR), provides a confidential and alternative method of dealing with legal disputes which avoids going to court.
ADR involves two types of resolution: adjudicative and non-adjudicative options. Adjudicative means that a person will sit as an adjudicator, for example, a person independent to the parties will hear the dispute and reach a conclusion. Non-adjudicative options facilitate an agreement, by working with the parties to reach a compromise.
The most common types of ADR are conciliation and mediation, arbitration, and adjudication. Conciliation and mediation are a non-adjudicative option, it involves an independent trained mediator to facilitate communication between the two parties. Decisions arising from mediation and conciliation are not legally binding. Conciliation is generally used for employment situations rather than commercial disputes; it is a compulsory process before an individual wishes to bring a claim to the Employment Tribunal.
Arbitration and adjudication are adjudicative options. Arbitration involves a process where the dispute is resolved by an independent arbitrator. This can be useful in disputes where specific knowledge is required, or privacy is of high importance. Many contracts will contain a clause which requires arbitration to be used in the case of a dispute. Adjudication is a formal process where the adjudicator will reach a decision on the dispute which is final and binding.
ADR is typically cheaper and faster than litigating and using the courts. If communication has not irreversibly lost between the parties at dispute, it should be considered, as a more efficient method of achieving an outcome. It is also helpful in terms of maintaining privacy compared to the more public court proceedings. Arbitration is an increasingly attractive option for businesses as it enables any matters to be kept confidential which preserves the reputation of the individuals or businesses involved.
If communications have entirely been lost, then it may be necessary to go down the more traditional route of litigation. If there is an imbalance of power, for example, if this involves a dispute between a sole trader and a large company ADR may put the individual at a disadvantage, so this is an issue which should be taken into account.
The shift away from the adversarial system is undoubtedly considered a key advantage of ADR. Courts are beset by delays, whilst procedure rules seek to try and improve the situation, litigation can take a considerable length of time – particularly for complicated cases. On average a fast – or multi-track claims can take between 32.2 – 51.9 weeks. In many cases, waiting a year for a resolution to a dispute is not possible. ADR can be much quicker as it ensures that the parties agree, and the resolution is reached within a reasonable time. ADR is also much cheaper than litigation, the average contested divorce can cost £36,000 upwards in court, where as ADR can start from as little as £100 per hour.
Although ADR does have many advantages, with this comes disadvantages. One of the most prominent disadvantages of ADR is that there is no guarantee that the dispute will not end up in court anyway. It is possible that a non-adjudicative form of ADR could be used throughout, for it to fall through at the last minute. Following this, the parties would most likely go to court to resolve the dispute.
Another disadvantage is informality. Although this can be viewed as a disadvantage as some due to the move away from the adversarial system, the traditional system does have a well-established set of rules that neither party can influence. ADR sits outside of the legal system, meaning that it is not affected by precedent, this leaves a degree of uncertainty with ADR.
In many civil cases ADR can be an appropriate alternative to litigation, particularly for fast, or multi-track claims. The courts welcome ADR as they are so overwhelmed with processing the volume of cases that comes before them – ADR lightens the load of the courts and is preferable to many people, especially businesses.