Alternative Dispute Resolution (abbreviated as ADR), is a form of legal system that works towards reducing the burden of the litigation process. ADR provides various modes of settlement including, arbitration, conciliation, mediation, and negotiation. Let us learn more on this, with the help of this article.
Alternative dispute resolution (ADR), or external dispute resolution (EDR), typically denotes a wide range of dispute resolution processes and techniques that parties can use to settle disputes, with the help of a third party.1 They are used for disagreeing parties who cannot come to an agreement short of litigation.2 However, ADR is also increasingly being adopted as a tool to help settle disputes alongside the court system itself.3
Advantages of Alternative Dispute Resolution4
- Less time consuming: people resolve their dispute in short period as compared to courts
- Cost effective method: it saves lot of money if one undergoes in litigation process.
- It is free from technicalities of courts; here informal ways are applied in resolving dispute.
- People are free to express themselves without any fear of court of law. They can reveal the true facts without disclosing it to any court.
- Efficient way: there are always chances of restoring relationship back as parties discuss their issues together on the same platform.
- It prevents further conflict and maintains good relationship between the parties.
- It preserves the best interest of the parties.
All ADR procedures share one and the same essential features – that is that, they allow parties to discover better solutions to their disputes outside of traditional court proceedings. The same is however, presided by divergent regulations. “For instance, in negotiation there is no third party who intervenes to help the parties reach an agreement, unlike in mediation and conciliation, where the purpose of the third party is to promote an amicable agreement between the parties. In arbitration, the third party (an arbitrator or several arbitrators) will play an important role as it will render an arbitration award that will be binding on the parties. In comparison, in conciliation and mediation, the third party does not impose any binding decision.”5
In addition to serving as a potential means of avoiding the expense, delay, and uncertainty associated with traditional litigation, ADR also is intended as a vehicle for improving communication between the parties.6 “It is also important to distinguish between mandatory processes and voluntary processes. Some judicial systems require litigants to negotiate, conciliate, mediate, or arbitrate prior to court action. ADR processes may also be required as part of a prior contractual agreement between parties. In voluntary processes, submission of a dispute to an ADR process depends entirely on the will of the parties.”7
One among other forms of ADR is “Mediation”. In this legal process, “a neutral person usually assists the parties in reaching a solution to a dispute amicably. “Since mediation is less rigid than both litigation and arbitration, it allows for creative techniques that would not be acceptable in other settings. For instance, a mediator can speak ex parte with each side to find mutually acceptable solutions that might not otherwise emerge.”8 In addition to this, “The mediator does not decide the case, but helps the parties communicate so they can try to settle the dispute themselves. Mediation may be particularly useful when family members, neighbors, or business partners have a dispute. Mediation may be inappropriate if a party has a significant advantage in power or control over the other.”9
Conciliation means the attempted resolution of issues raised by a complaint, or by the investigation of a complaint, through informal negotiations involving the aggrieved person, the respondent, and the Assistant Secretary.10 It is important to note that, “either party to the dispute may accept or refuse the assistance of a conciliation service. It, therefore, has no legal jurisdiction over any dispute, although it does have the strength of the understanding that public opinion would tend to be hostile toward groups not willing to accept the efforts of government to achieve settlement.”11
In this process of ADR, parties do their best to bargain the best deal in order to reach a common consensus. “Parties often negotiate the terms of a contract prior to entering into the contract. For example, in negotiating an agreement to enter into a corporate merger, parties will negotiate, among other things, price, representations and warranties, covenants, assumed liabilities, conditions to closing the deal, and indemnities. Parties may also negotiate to reach an out-of-court settlement.”12 Negotiation is a top-tier means of resolving disputes. “While the two most known forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution. Negotiation is much less formal than other types of ADRs and allows for a lot of flexibility.”13
In addition to this, you should know about one more category of ADR – i.e., the Structured negotiation, which is a type of collective and mutually decided dispute solving mechanism. This form of ADR is dissimilar to the traditional ADR, as it neither relies on a third-party negotiator nor is instituted by a legal complaint. The process is often implemented in cases in which a party or parties seek injunctive relief.14 Structured negotiation has been used to arrange agreements that typically arise from would-be Americans with Disabilities Act (ADA) legal complaints.15 The technique can be contrasted with certain types of lawsuits often referred to as “drive-by lawsuits” where a long strings of lawsuits about the ADA are filed publicly by a single lawyer and settled quickly and confidentially, a practice which can undermine the struggle to adopt more inclusive accessibility practices.16
The various kind of ADR methods is especially mapped out to ensure that a variety of goals are met accordingly. “Some of these goals are directly related to improving the administration of justice and the settlement of particular disputes. Some, however, are related to other development objectives, such as economic restructuring, or the management of tensions and conflicts in communities. For instance, developing an efficient, consensual way to resolve land disputes may be critical to an AID mission not because of its commitment to strengthening the rule of law, but because land disputes threaten the social and economic stability of the country. Likewise, efficient dispute resolution procedures may be critical to economic development objectives where court delays or corruption inhibit foreign investment and economic restructuring.”17
In the United States of America, Arbitration legalities are governed under the Alternative Dispute Resolution Act of 1998. Under Section 651, it defines ADR as, “For purposes of this chapter, an alternative dispute resolution process includes any process or procedure, other than an adjudication by a presiding judge, in which a neutral third party participates to assist in the resolution of issues in controversy, through processes such as early neutral evaluation, mediation, minitrial, and arbitration as provided in sections 654 through 658.”18
Following are some of impressive judgments delivered by on Arbitration aspects:
Salem Advocates Bar Association v Union of India, (AIR 2005 SC 3353) is a “leading case that redefined the contours of civil litigation in India in a quite meaningful way. This case also delved into the various facets of Arbitration. And some of the court’s observations on arbitration law in India included- That in view of the right to a speedy trial being implicit in A.21 of the Constitution, and in order to provide fair, speedy, and inexpensive justice to the litigating public, the Supreme Court has recommended that High Courts adopt, with or without modification, the model Civil Procedure Alternative Dispute Resolution and Mediation Rules framed by the Law Commission of India. And the rules so framed by the High Courts are to supplement the rules framed under the Family Court Act, 1984.”19
In the case of, BG Group PLC. V. Republic of Argentina, US. Supreme Court Decision, held on its decision rendered on March 5, 2014, the US Supreme Court “ruled on a 7-to-2 majority that an UNCITRAL arbitral tribunal did not exceed its powers by waiving a treaty requirement that recourse to arbitration would be possible only where disputes had been submitted for 18 months to the host State competent courts.”20
With respect to private ADR in widespread notion, “an often-expressed concern is that the availability of these services is creating a “two-tier” system of justice, where the wealthy use private ADR while the poor and middle class are shut out of the private ADR market and forced to stay within the court system. Further, it is thought that, as the wealthy, influential segments of society forsake the public courts, there will be less support for maintaining or improving the public justice system. While the subcommittee did not have sufficient empirical information to allay these concerns completely, there is information suggesting that the use of private ADR is not limited to the wealthy. In addition, with the advent of delay reduction and court-related civil ADR programs, the courts are providing swifter resolutions and more options to civil litigants. Finally, civil ADR services are also available to the public through community ADR programs. Clearly, however, community and court-related civil ADR programs, which are important mechanisms for providing access to civil ADR services, are not currently available in all counties.”21
“Beginning in the late 1960′ s, American society witnessed an extraordinary flowering of interest in alternative forms of dispute resolution. Part of the ADR movement responded to the civil rights strife. In the 1964 Civil Rights Act, Congress established the Community Relation Service of the Justice Department to assist courts in settling intractable racial and community disputes. The Ford Foundation established the National Center for Dispute Settlement and the Institute of Mediation and Conflict Resolution to study dispute settlement mechanisms.”22
The key essentials of ADR is fairness. This can only be achieved if parties mutually agree to opt for arbitration as well as maintain confidentiality. In addition to this, it is important that parties trust the chosen arbitrator enough to know that an agreed upon consensus will be reached. Further to this, it is even more important that the chosen arbitrator/mediator has no personal gain out of the said dispute. As well as, he/she is not bias.
A good arbitrator does not favor one particular side over the other, the same for which they do not actually state which side is right. They merely help parties in a dispute to work out their differences in an amicable way. ADR methods are cheaper, better and faster. Any introvert lawyers out there? They should definitely try their hand at arbitration. As it gives you opportunities in the international era too as well as to build contacts in the legal arena up close.
- Alternative dispute resolution – Wikipedia
- Supra 1.
- All you need to know about Alternative Dispute Resolution (ADR) – iPleaders
- Supra 5.
- Keyes, Melissa (3 May 2016). “Keyes: An alternative alternative dispute resolution process”. The Indiana Lawyer.
- Pearson, Katherine (3 May 2017). “A Response To Drive-By Lawsuits – Equal Rights Center”. Equal Rights Center.
- Supra 16.