Going to court should always be viewed as a last resort to solve any disputes. Whilst there are times that it can be necessary, there are usually other options to consider before pursuing litigation.
Alternative Dispute Resolution, often referred to as ‘ADR’, is a way of trying to resolve a dispute without having to go to court. The general idea behind ADR is that the parties can agree a settlement at an earlier stage in the legal proceedings, or sometimes without even starting legal proceedings. Courts strongly encourage parties to utilise methods of ADR and parties will often have to justify to the court why they are refusing to use ADR, with the possibility of facing sanctions for their refusal.
There are different types of ADR (listed below). They all work in different ways, and each type of ADR is suited to differing types of dispute – there is no one size fits all when it comes to ADR!
Whilst each type of ADR has its own complexities, and could be explained in detail, they can each be briefly described in the following way:
- Mediation is where a neutral person will assist the parties to discuss the differences in their legal position to help them to come to an agreement.
- Arbitration is where an arbitrator (usually an expert in field of the dispute) will make a decision based on information given to them by the parties to the dispute. The decision made by the arbitrator is legally binding on the parties.
- Early Neutral Evaluation can be completed either by a judge, or be done privately. Whilst it is not binding on the parties, it gives an opportunity for the case to be provisionally considered which indicates which side would be likely to win if the matter were to go to trial.
- Independent negotiation is where an independent negotiator will help the parties to negotiate and reach an agreement.
Key benefits of ADR:
- It is less expensive than pursuing litigation.
- It can help maintain a positive relationship between the parties.
- It can obtain a faster result compared to litigation.
- Many forms of ADR are confidential processes, which maintains privacy for clients.
- The neutral third party assisting is often an expert in their field.
Disadvantages of ADR:
- If ADR is unsuccessful, it can delay the court proceedings.
- Except for arbitration, ADR is not usually legally binding.
- All parties to the dispute must agree to using ADR.
- ADR does not guarantee a resolution to the dispute.
- An ineffective third party can potentially hinder a resolution.
ADR can be suitable for claims of any size (large or small), and in July 2022 the government announced that it is looking at expanding a requirement to mediate beyond the current Small Claims Mediation Service (which is currently for small claims valued at under £10,000). This therefore makes understanding, and utilising, ADR ever more important as a tool for resolving disputes quickly.
Our dispute resolution solicitors at TV Edwards LLP are always happy to provide independent legal advice for disputes that arise. This includes advising on appropriate ADR options that can be explored.
Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.
FAQs
– It's another great way to resolve disputes in such a way that allows the parties to continue with a working relationship. Cons: – In a negotiation, the party with the most leverage has power. – Negotiations can fall through if the proposals are not fair.
Is ADR good or bad? ›
ADR can be a cheaper way to resolve litigation because you may be able to avoid going through an expensive trial. Mediation is a form of ADR that can help the parties bridge their differences. While a mediator is not able to issue binding decisions, they can make recommendations to help the parties find common ground.
What are the disadvantages of negotiation as an alternative dispute resolution? ›
The negotiation process cannot guarantee the good faith or trustworthiness of any of the parties. Negotiation may be used as a stalling tactic to prevent another party from asserting its rights (e.g., through litigation or arbitration).
Which of the following is a disadvantage of ADR? ›
However, it also has its drawbacks, such as the lack of legal precedent, limited discovery, potential enforcement challenges, power imbalances, informal procedures, and variable quality among ADR practitioners.
What are the advantages and disadvantages of conflict resolution? ›
Advantages of different conflict resolution models in Employee Relations include improved communication and better team morale. However, disadvantages can include time-consuming processes and the potential for unresolved underlying issues.
How effective is ADR? ›
It often saves costs and time and increases user satisfaction. For cases that go back to court, however, the total cost and time may increase. Alternative dispute resolution can also have indirect benefits. It can increase the effectiveness of courts by reducing bottlenecks.
What are the problems with alternative dispute resolution? ›
As there is no arrangement of training for mediators to develop their knowledge and skill lack of experienced mediator is one of the major challenges of ADR in the way of settlement of law conflict.
Which of the following is an advantage of alternative dispute resolution? ›
ADR is usually less formal, less expensive, and less time-consuming than a trial. ADR can also give people more opportunity to determine when and how their dispute will be resolved.
What is the criticism of alternative dispute resolution? ›
Problems with ADR. No appeal: Unless you write an appeal process into your agreement or, for very limited circ*mstances, a binding ADR procedure lacks the ability to appeal the decision. For example, if you have a single arbitrator and they “go rogue,” your ability to fix it is limited.
What are the advantages and disadvantages of ADR Quizlet? ›
- Negotiation Advantage 1) SPEED, CONVENIENCE & COST. ...
- Negotiation Advantage 2) LACK OF FORMALITY & FLEXIBILITY. ...
- Negotiation Advantage 3) PRIVACY OF CONDUCTING NEGOTIATIONS. ...
- Negotiation Disadvantage 1) POTENTIAL IMBALANCE OF POWERS. ...
- Negotiation Disadvantage 2) LACK OF LEGAL EXPERTISE. ...
- Negotiation Disadvantage 3)
ADR risk factors and expenses
- Exchange rate risk—the risk that the currency in the issuing company's country will drop relative to the US dollar.
- Political risk—the risk that politics or regime changes in the issuing company's country will undermine exchange rates or destabilize the company and its earnings.
When ADR Might Not Work. Abuse and imbalance of power. Certain cases – such as those involving divorce and sexual harassment – invoke issues of abuse and power imbalance. For example, if there are allegations of domestic violence in a family law matter, ADR may not be feasible.
What are the advantages and disadvantages of mediation dispute resolution? ›
Advantages of Mediation
- Mediation is Cost Effective. ...
- Mediation Saves Time. ...
- Mediation Is Confidential. ...
- Mediation Gives the Parties Control and Flexibility. ...
- Mediation Focuses on Preserving Relationships. ...
- Mediation is Non-Binding. ...
- Mediation Can Fail When the Balance of Power Between the Parties Is Too Great.
Arbitration offers several advantages that can be highly beneficial in resolving disputes. It provides privacy, efficiency, and the ability to choose a specialized decision-maker. However, it also comes with its drawbacks, such as limited discovery and the finality of decisions.
What is an advantage to alternative dispute resolution quizlet? ›
The advantages of an ADR are as follows: It is flexible and can be scheduled anytime or at the convenience of the participants. Since the process is flexible, it delivers faster results. The entire process and resolutions are relatively less costly.
