Explain the advantages and disadvantages of alternative dispute resolution’

 

Introduction

Other than court system there are other ways in which disputes can be solved. Disputes often happen every now and then so it is very important that it should be handled carefully. Judgment is very important in this world and proper judgment is very effective. One judgment can change the whole situation around. Similarly judgment can change the life of a person completely. It can take away someone’s respect and then again can give a person the deserved respect. The word “dispute” means “disagreement” and the word “resolution” means “the action of solving something.”  Alternative dispute resolution is a form of agreement. Alternative dispute resolution consists of a variety of ways to dispute resolution. In many of these approaches there is a neutral individual who assists disputing parties in resolving their disagreements. ADR increases the parties’ opportunities to resolve disputes prior to or during the use of formal administrative procedures and litigation. It is not intended to replace the traditional approaches and it can provide a long term solutions to employee-employer conflicts through stakeholder’s participation and buy-in. It is at times very helpful when it comes to making judgment. At times it is very helpful then again it does have some flaw backs

 Definition of ADR[1]

Alternative Dispute Resolution includes alternative methods of helping people resolve legal problems before going to court. There is an involvement in of an independent third person, called a “neutral” who tries to help resolve or narrow the areas of conflict in ADR.  Alternate Dispute Resolution means the wide variety of methods by which conflicts and disputes are resolved other than through litigation.

Alternative Dispute Resolution refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory.

Types of ADR:

There are four forms of ADR:

  • Mediation
  • Arbitration
  • Negotiation
  • Conciliation

Mediation

The most popular form of ADR is mediation. Mediation is a process of dispute resolution focuses on effective communication and negotiation skills. The mediator role is to help the parties in communicating and negotiating more effectively, thereby enhancing their ability to reach a decision. It is not the mediator’s role to adjudicate the issues in dispute and indeed the mediator has no right to do so. Mediation is not a process to force compromise, although compromise is an element of the process. Each party’s limitations are respected and a party is only expected to make a change in its approach to the problem if it becomes convinced that it is reasonable to do so. Today mediation is the most fast growing form of ADR. It is being used in almost every conceivable type of dispute resolution and comes in different forms. The process has also been effectively adapted for multiple party dispute resolution with tremendous success. On average the success rates of mediation processes range from 80% to 85%. In an attempt to capitalize on the success rates, legislation is slowly being amended to include provisions for mediation of disputes.

 The advantages of mediation are many. Some of the benefits mediation offers include:

  • Effective Process: Mediation generally enjoys an 80%-85% success rate.
  • Better Results: The resolution is created by the parties.
  • Speed: Mediation is focused in resolving the problem quickly.
  • Cost: Mediation is not expensive.

Act of mediation in divorce[2]

Mediation plays an important role in family matters. When it comes to solving divorce cases, mediation has been used to enable both parties to work out an agreed settlement rather than having one of them imposed outside by the court. The importance of mediation was supported in the Family Law Act 1996, but it is important to rectify that there are some potential problems regarding mediation. In marriage management, mediation is to be provided on a funded basis, by the Legal Aid Board. Mediation will not to be accepted until and unless it appears to be suitable for the case. There is a Code of Practice which must keep the chances of understanding under review throughout the mediation and let clients know about the availability of the independent legal advice. Mediation is to be offered at a primary stage in the new process. This will be done by inviting the party filing in the Statement to come and attend a meeting with a mediator to see whether advantage can be taken of the facility or not. The court will be able to postpone proceedings for the meeting with the mediator so that the court may be informed whether the appointment was held and whether mediation will be used. It remains to be seen whether the introduction of mediation will be a success story. While debate in the House of Commons rumbled on to the effect that ‘it is better to have mediation than to have lawyers arguing about costs’, in the House of Lords it was noticed that success depends very much on the qualities and background experiences and training of the mediator.

Arbitration

Arbitration is a process for the resolution of disputes on a private basis through the appointment of an arbitrator, an independent, neutral third person who hears and considers the qualities of the dispute and renders a final and binding decision called an award. The process is similar to the litigation process as it involves adjudication, however, the parties select their arbitrator and the manner in which the arbitration will proceed. For example, if the dispute is fairly straightforward and does not involve any factual questions, the parties may agree to waive a formal hearing and provide the arbitrator with written submissions and documentation only, called a documents only arbitration, whereas in other cases the parties may wish a full hearing. Therefore, the parties create their own adjudicatory forum which is tailor made to the particular needs of the parties and the nature of the dispute.

 The advantages of arbitration over court adjudication can include the following:

  • Expertise of the Decision-Maker: The parties can choose an arbitrator who has expert knowledge of the law, business or trade in which the dispute has arisen.
  • Low Cost: Arbitration is not expensive if the process is kept simple.
  • Speed: Arbitration can be arranged quickly and does not take time as long as litigation.

 Arbitration in Bangladesh[3]

In Bangladesh, the current law of arbitration is included mainly in the Arbitration Act, 1940, there being different Acts dealing with the enforcement of foreign awards.  There are also stray provisions as to arbitration, scattered in special Acts.  Three types of arbitration are that are looked carefully by the Arbitration Act of 1940, specially (i) Arbitration in the course of a suit, (ii) Arbitration with the intervention of the court, and (iii) Arbitration otherwise than in the course of a suit and without the intervention of the court. In reality, the last category attracts the maximum number of cases.

Under the Act of 1940, an arbitration agreement must be written in pen and paper, though it is not required to be registered. The agreement might make a reference about recent or future differences. The arbitrator’s name might be included in the agreement, or left to be designated later, either by the consent of the parties or in some other manner specified in the agreement. Very often, the rules of prestigious commercial bodies lay down that a person who becomes a member of the association must accept the machinery of arbitration created or recognized by the rules of the association.  This also amounts to an “arbitration agreement” for the purposes of the Arbitration Act, 1940.

Once an arbitration agreement has entered in for submitting future differences to arbitration, it is not, necessary important to obtain the fresh consent of all the parties for a reference to arbitration at the time when the dispute actually arises.

Negotiation

The simplest form of Alternative Dispute resolution. Where both parties have a dispute they can negotiate a solution themselves. There is no third party of middle man who facilitates the resolution process or imposes a resolution.

Conciliation

This is very much similar to mediation where a neutral third party helps the parties resolve their dispute. The conciliator plays a more active role in the process. Conciliation is not legally binding on the parties.

    Advantages of ADR                                             

Alternative dispute resolution (ADR) procedures have several advantages:

  • Reduced time in dispute- It takes less time to reach a final decision.
  • Reduced costs in relating to the dispute resolution- It requires less money i.e. it is cheap.
  • Flexibility-Parties have more flexibility in choosing what rules will be applied to the dispute. They have the freedom to do so.
  • Produce good results- settlement rates of up to 85 percent.
  • Improved satisfaction with the outcome or manner in which the dispute is resolved among disputants.
  • Increased compliance with agreed solutions.
  • A single procedure[4]– Parties can agree to resolve in a single procedure a dispute involving intellectual property.
  • Party autonomy- Because of its private nature, ADR affords parties the opportunity to exercise greater control over the way their dispute is resolved than would be the case in court litigation. In contrast to court litigation, the parties themselves may select the most appropriate decision-makers for their dispute. In addition, they may choose the applicable law, place and language of the proceedings. Increased party autonomy can also result in a faster process, as parties are free to devise the most efficient procedures for their dispute. This can result in material cost savings.
  • Neutrality– ADR is neutral to the law, language and institutional culture of the parties, thereby avoiding any home court advantage that one of the parties may enjoy in court-based litigation.
  • Confidentiality- ADR proceedings are private. Thereby, the parties can agree to keep the actions confidential. This allows them to focus on the merits of the dispute without concern about its public impact.
  • Finality of Awards- Unlike court decisions, which can generally be contested through one or more rounds of litigation, arbitral awards are not normally subject to appeal.
  • Enforceability of Awards- The United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards of 1958, known as the New York Convention, generally provides for the recognition of arbitral awards on par with domestic court judgments without review on the merits. This greatly facilitates the enforcement of awards across borders.
  • Preserves relationship- Helps people cooperate instead of creating one winner or one loser.

 Disadvantages of ADR

Some disadvantages of alternative dispute resolution are:

  • It can be used as a stalling tactic.
  • Parties are not compelled to continue negotiations or mediation.
  • Does not produce legal precedents.
  • Exclusion of pertinent parties weakens final agreement.
  • Parties may have limited bargaining power. Parties do not have much of a say.
  • Little or no check on power imbalances between parties.
  • May not protect parties’ legal rights. The rights of the parties may not be protected by alternative dispute resolution.
  • Your case might not be a good fit[5] Alternative dispute resolutions resolve only issues of money or civil disputes. Alternative dispute resolution proceedings will not result in injunctive orders. They cannot result in an order requiring one of the parties to do or cease doing a particular affirmative act.
  • There are limits to the discovery process You should also be aware that you are generally preceding without the protections offered parties in litigation, such as those rules governing discovery. Courts generally allow a great deal of latitude in the discovery process, which you will not have in an alternative dispute resolution.
  • There is no guaranteed resolution. With the exception of arbitration, alternative dispute resolution processes do not always lead to a resolution.
  • Arbitration decisions are final. With few exceptions, the decision of a neutral arbitrator cannot be appealed. Decisions of a court, on the other hand, usually can be appealed to a higher court.
  • Participation could be perceived as weakness. While the option of making the proceeding confidential addresses some of this concern, some parties still want to go to court “just on principle.”
  • The case might not be a good fit-Alternative dispute resolutions generally resolve only issues of money or civil disputes.
    • There are limits to the discovery process-One should also be aware that he is generally proceeding without the protections offered parties in litigation, such as those rules governing discovery.

 Conclusion

Through this topic I got to learn a new term called alternative dispute resolution (ADR). I have tried to provide as much details as possible regarding my topic. I found out what alternative dispute resolution means, how many types of ADR are there, what are the advantages and disadvantages of ADR. I have also provided some examples and tried to relate Alternative Dispute Resolution with respect to Bangladesh. Litigation should be the last resort and utilized only if the ADR procedures fail. It is essential, however, that all of the parties involved in the claim or dispute approach ADR with an open mind and a willingness to compromise if it is to have any chance of success. Mediation is mostly used. Arbitration is very useful when it comes to handling family matters.

 Bibliography:



[1] Alternative Dispute Resolution(ADR)- An introduction/ http://www.duhaime.org/LegalResources/CivilLitigation/LawArticle-18/Alternative-Dispute-Resolution-ADR-An-Introduction.aspx/3-7-2012

[2] Mediation in Divorce/http://www.lawteacher.net/arbitration-law/essays/alternative-disputes-resolution.php/3-7-2012

[3] Arbitration Law in Bangladesh/http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm/16-7-2012

[4] ADR advantages/ http://www.wipo.int/amc/en/center/advantages.html/9-7-2012

[5] Disadvantages of alternative dispute resolution/Jaceson Maughan/http://www.life123.com/career-money/business-law/contracts/disadvantages-of-alternative-dispute-resolution.shtml/8-7-2012