Alternative dispute resolution (ADR)

Introduction
Alternative Dispute Resolution (ADR) (also known as external dispute resolution in some countries, such as Australia) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. ADR basically is an alternative to a formal court hearing or litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party. ADR are ways and methods of resolving disputes outside the judicial process (formal litigation – court)

Alternative dispute resolution simply means settling a matter outside the courtroom through negotiation. If you have a dispute over the supply of goods or services that you have been unable to settle through negotiation, you may wish to consider using an alternative dispute resolution scheme rather than taking court action. These schemes use a third party such as an arbitrator or an ombudsman to help you and the supplier to reach a solution. You will usually have to complete the supplier’s internal complaints procedure beforehand and you may have to pay a fee for using the scheme. This is usually refunded if you are successful. Some schemes are legally binding, which means you cannot take court action if you aren’t satisfied with the decision, except to enforce an award.

Any method of resolving disputes other than by litigation. Public courts may be asked to review the validity of ADR methods, but they will rarely overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them.

Advantages of using ADR

The main advantages of using an ADR are:

  • You may resolve your problem

You can easily resolve your problem through negotiation. You don’t have to go through the lengthy procedures of courtroom.

  • You may be awarded compensation

If the matter is settled outside the court through negotiation, you might get rewarded a compensation from the court. But if the court decision goes against you, you will get nothing. So it is helpful to get a compensation in applicable cases.

  • The procedure is less formal than going to court

As it is told earlier, the ADR is less lengthy and time taking than going to a court. It is an informal way of doing the work.

  • In some schemes, the decision may be binding on the trader but not on you, leaving you free to pursue through court if you wish

In some cases, ADR leaves the option for the party to go to the court. It does not bind the parties so that they cannot go to the court if the party is not satisfied.

  • It may cost you less than going to court

Procedures in the courts are very lengthy and they are costly too. In ADR as the parties settle the matter outside the court, it might be less costly than going to the court depending on the matter.

  • The procedure is confidential

In court, the case is disclosed in front of the judge and other people. But in ADR the case is presented before two parties only. It is confidential than going to the court and settling the matter.

Things to Consider

There are a few things to consider before going to solve the matter through alternative dispute resolution (ADR). The things to consider are:

  • The costs involved. Compare the arbitrators’/mediators’ fee with the costs involved in going to court
  • Would you prefer to have a hearing, where you can put your point across in person, or have the matter dealt with on paper (documents only process)
  • If the arbitrators’ decision is legally binding, it will prevent you taking the matter through the courts

You may have to pay further costs to enforce the arbitrators’ decision through the courts.

Types of Alternative dispute resolution (ADR)

The main types of ADR that deal with consumer disputes are conciliation, arbitration or mediation and are usually provided by trade associations. If you wish to use one of these schemes, you should ask the suppliers whether they are members of a trade association and, if so, contact the trade association to find out whether it has a conciliation and/or arbitration service.

Conciliation

In consumer disputes, conciliation is the first stage in the arbitration process and the conciliator is usually a member of the trade association. Both you and the supplier will be asked to give written details of the complaint, including any evidence, and the conciliator will give an opinion on the best solution. Any decision is not binding and won’t prevent you from taking court action. If you disagree with the opinion offered, you can then proceed to the arbitration stage or consider suing in court. There is usually no charge for conciliation.

Arbitration

Arbitration is a procedure for settling disputes in which both you and the supplier usually agree to accept the decision of the arbitrator as legally binding. This means you cannot take court action, except to enforce the award if the supplier doesn’t pay. The arbitrator will usually be a member of the Chartered Institute of Arbitrators and often acts independently of the trade association. The arbitrator will make a decision based on the written evidence presented by you and the supplier. The decision is confidential and cannot be made public without the supplier’s agreement. You will have to pay a registration fee which may be refunded if you are successful.

Some contracts for services and delivery notes include an arbitration clause stating that you will refer any dispute to arbitration. Although this is binding once you have signed the agreement, if the total cost is below the small claims limit, you cannot be forced to arbitrate unless you gave your agreement after the dispute arose.

Mediation

If you use a mediation scheme, the mediator will help you and the supplier to negotiate an acceptable agreement and will act as a go between if you don’t want to meet. If the supplier agrees to mediation, you will both be asked to give details of the dispute, including copies of any evidence and will be asked to sign a mediation agreement giving a framework for the mediation. The mediator may arrange joint or separate meetings with you and the supplier and will help you to identify the strengths and weaknesses in your case. If an agreement is reached, you will both be asked to meet to draft the terms of the settlement. This will be legally binding unless you state otherwise and will prevent you from taking court action except to enforce the award. Mediation can be expensive, but you may be able to get legal aid to help with the costs.

ADR for insurance disputes

It is important to consider that mediation or other methods of disputes are not really new and certainly are not the panacea of all ills. Different types of ADR are used in different cases. In insurance cases mostly Mediation type of ADR is used.

In mediation, the mediator will help you and the supplier to negotiate an acceptable agreement and will act as a go between if you don’t want to meet. If the supplier agrees to mediation, you will both be asked to give details of the dispute, including copies of any evidence and will be asked to sign a mediation agreement giving a framework for the mediation. The mediator may arrange joint or separate meetings with you and the supplier and will help you to identify the strengths and weaknesses in your case. If an agreement is reached, you will both be asked to meet to draft the terms of the settlement. This will be legally binding unless you state otherwise and will prevent you from taking court action except to enforce the award. Mediation can be expensive, but you may be able to get legal aid to help with the costs.

Mediation is used because insurance cases might go up to millions of taka and it should not be settled without an option for the court action. If any party is not happy with the dispute, they might go to the court and appeal for a new solution by the court. Or if the insurance party refuses to pay the amount fixed in mediation, the other party can go to court and ask for the amount in court from the insurance and sue them.

Employing different ADR according to the nature of dispute

There are different types of alternative dispute resolutions such as Conciliation, Arbitration or mediation. We can use different ADR for different situations. What type of ADR we want to use actually depends on the matter. If the matter is worth a small amount and it can be solved through easy way, we might want to use the conciliation process.

The process of mediation can start only if a valid Arbitration Agreement exists between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in writing. The contract, regarding which the dispute exists, must either contain a mediation clause or must refer to a separate document signed by the parties containing the mediation agreement. An exchange of statement of claim and defense in which existence of an arbitration agreement is alleged by one party and not denied by other is also considered as valid written mediation agreement.

If there is a big amount involved in the matter, we might use Arbitration or mediation to solve the problem. Because in these schemes, both the parties have the option to go the court and ask for a new result if the mediation is not satisfactory for any party. And in these schemes, the victim also have the right to go to court and ask for the amount from the other party which amount was fixed to give as a demurrage to the victim. The victim may go to court and sue the other party for not giving the amount.

Conclusion

Alternative dispute resolution in Bangladesh is not new and it was in existence even under the previous Arbitration Act, 1940. The Arbitration Act, 2001 has been enacted to accommodate the harmonization mandates of UNCITRAL Model. To streamline the Bangladesh legal system the traditional civil law known as Code of Civil Procedure, (CPC) 1908 has also been amended and section 89A & 89B has been introduced which provides options for the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement. Due to extremely slow judicial process, there has been a big thrust on Alternate Dispute Resolution mechanisms in our country. In our country, many law firms practice Alternative dispute resolution (ADR). One of the firms is the lawyers and jurists. They handle all the ADR related cases and they also handle other cases too.<href=”#_ftn9″ title=””>[9]

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