What is Alternate Dispute Resolution and when can you use it?
What is Alternate Dispute Resolution and when can you use it?
The vast majority of disputes never get to Court, so how are they resolved? Alternate Dispute Resolution, known as ADR, is a term used for the wide variety of processes available to resolve dispute other than by going to court.
A common misconception is that ADR is only used for minor disputes but in fact it may be used for a range of matters, from disputes between neighbours, to resolving large scale commercial matters. ADR was established as an alternative to litigation to allow wider access to justice. Since then, it has been developed and in many cases may be a more appropriate method of dispute resolution than going to court.
There are a wide variety of ADR processes available. Facilitative processes occur where a practitioner assists creating an environment in which to allow the parties to solve their dispute. While the practitioner can assist in identifying issues, developing options and considering alternatives, they do not play an active role in the resolution of the dispute.
Advisory processes occur where a practitioner not only facilitates dispute resolution but also plays an active role in evaluating the dispute and providing specific advice regarding the facts, the law and possibly solutions and advice regarding how a solution can be achieved.
Determinative processes occur where a dispute resolution practitioner assesses a dispute and makes a determination regarding the solution of the matter.
There are a number areas where ADR procedures are mandated and must be utilised before the Court will hear a matter. Alternatively if the procedure is not proscribed, there are a range of options available which may be more appropriate than traditional litigation.
Negotiation is one of the most common forms of ADR. Parties seek to come to an agreement or solution to a dispute between themselves by discussing the issue in contention. The parties seek to preserve their interests but adjust their views and positions in order to come to an agreement.
While negotiation can be between two parties on their own, given the diverse landscape in which negotiation is relevant, often legal advisors can assist parties in negotiation.
Mediation occurs where an independent third party assists parties to attempt to resolve a dispute. The mediator identifies issues, develops options, proposes alternatives and attempts to assist the parties to resolve the dispute.
The Mediator does not generally act as an advisor regarding the content of the dispute, however they may advise generally regarding the process of the mediation.
Mediation may be agreed upon between the parties when the dispute arises, or alternatively the parties may have agreed upon mediation as an appropriate method of dispute resolution when drafting an agreement and have included this as a term of the contract.
Conciliation occurs where a dispute resolution practitioner assists the parties to resolve a dispute. The Conciliator assists by identifying issues, developing options, proposing alternatives and attempting to assist the parties to resolve a dispute.
Unlike in Mediation, a Conciliator will often have a more advisory role in the resolution of the dispute and plays a more direct role in the dispute resolution.
As such, the conciliator may advise on numerous aspects of the dispute resolution including the subject matter and processes. The conciliator may also propose solutions and advise on appropriate terms for settlement options.
Conciliators are often experts in the subject area of the dispute and are better able to advise upon the strengths and weaknesses of a dispute.
While conciliators often advise upon and encourage settlement, ultimately the decision to settle rests upon the parties; the conciliator is not able to make a determination regarding the outcome of the dispute.
Parties submit their arguments and evidence to an arbitrator who makes a determination regarding the outcome of a dispute.
This form of ADR is one of the most similar methods to traditional litigation. Parties must generally be more prepared and submit evidence to assist the arbitrator. As in conciliation, the arbitrator is often a specialist or expert in the subject matter of the dispute.
The parties to arbitration may also agree that any decision made by the arbitrator is legally binding.
While this process is similar to litigation it is generally less formal, less timely and the terms of any determination may be kept private and confidential.
Parties submit their disputes to an appraiser who provides a likely outcome of the dispute if the matter were to proceed to Court based upon the information provided.
The decision made is generally not binding upon the parties but is used as an alternative to costly litigation to provide a likely outcome.
Adjudication is a formal dispute resolution process. The parties present their case to a third party who will makes a determination on the matter.
Benefits of ADR
There are a number of benefits to using ADR processes to resolve a dispute. These include:
- Cost: ADR processes are generally less costly than traditional litigation;
- Process: as these processes are not governed by the courts, parties have more freedom and flexibility to choose when the dispute resolution process will occur as well as the pace, location and formality of the proceedings;
- Time: ADR processes are often less lengthy than litigation as the parties are not bound by Court time limits;
- Versatility: in addition to the variety of ADR processes which may be implemented, ADR is often appropriate with a range of disputes throughout the dispute resolution process. For example, it may be used to resolve a dispute early on, or may be used to end a lengthy dispute;
- Stress: ADR processes are often less stressful than Litigation;
- Personal relationships: the less adversarial nature of ADR processes often means that parties are able to maintain amicable relationships with each other when resolving disputes. Furthermore, where appropriate, parties may even improve their relationships;
- Self-directed: ADR processes are not bound as strictly as traditional litigation. As such, the parties are able to focus on what is important to them. Parties are able to control the process and outcome and be able to retain control over their own disputes;
- Flexible Solutions: Parties are able to come up with personalised solutions which may not be available to the courts. As such, parties can customise solutions and attempt to come up with a win-win solution; and
- Privacy and Confidentiality: decisions made in ADR processes are generally not available to the public; therefore, parties can keep the terms of the dispute private.
While there are a large number of factors in favour of ADR, it is important to note that in some cases ADR processes may not be appropriate and traditional court resolution of the matter may be the best option.
What does the lawyer do?
Generally, we find that a large number of clients seek out help when a dispute has progressed to the litigation stage. However, we are able to help at all stages of a dispute and indeed recommend that ADR processes be attempted, where appropriate, as a viable alternative to going to court.
Before the process
We can help to:
- Discuss options;
- Provide advice relating to your legal position;
- Provide advice regarding potential outcomes;
- Provide advice relating to the processes available;
- Identify realistic expectations;
- Objectively analyse the dispute and evaluate strengths and weaknesses;
- Look into the substantive, procedural and psychological factors which may impact upon the dispute;
- Provide advice regarding additional information required;
- Provide advice regarding gaps in arguments; and
- Establish main areas of contention.
During the process
Depending on the particular ADR method and your preferences a lawyer’s role can be very hands-on, or more advisory.
As such, we can take a hands-on approach, simply advise you when required, or act anywhere in between.
While engaging in ADR processes, it is important to be aware of Court timeframes that you are not deprived of avenues to resolve the dispute. We can ensure that you options moving are not restricted for failing to commence proceedings within time.
After the process
After an ADR process has occurred it is important for the agreement between the parties to be drawn up into a written document which can be signed by both parties as an acknowledgment of resolution.
Here, we can draft an agreement acknowledging the terms of resolution reached. It is often important to have an appropriately drafted agreement in the event that the other side does not comply with the agreement reached.
How We Can Help
If you have any questions regarding this article or wish to discuss options for resolving your dispute, please do not hesitate to contact one of our solicitors on (07) 3667 8966.