Discuss the characteristics, advantages and limitations of ADR.

1.1 Abstract:

Alternative Dispute Resolution (ADR) consists of methods and techniques to deal with disputes without involving lawsuit or any other litigation process. Due to quicker and cost effective decision capability of ADR, it has gained noticeable popularity among the commercial and social parties around the world. Though the techniques have disadvantages, the benefits are widespread and considered as most effective ones. “The major types of ADR and their characteristics are renowned amongst the law practitioners as well is to the lawyers. Thus, ADR serves significant deal of settling a dispute or conflict.”

1.2 Introduction:

“In general terms, dispute is referred to as a disagreement or argument between the parties. The dispute generally takes place between two parties which can be a person or a group of person composing a single entity.  Parties comprise of plaintiff and defendant. In this case, plaintiff is the person who brings charges and files a suit and defendant is the person accused with charges. Dispute can be resolved in both using legal jurisdiction and also compromising settlement without reaching the court. This dispute can be between individuals and corporations and even between public officials”.

Perhaps, different parties try to resolve the dispute which they considered to result with the best outcome. Thus there is necessity of Alternative Dispute Resolution (ADR) in order to ensure justified resolution without the involvement of legal jurisdiction and court. The aspects of ADR are perhaps extended since there are different methods and implications of resolving disputes. The resolution of ADR is not only for commercial conflicts but also in many cases found in the dispute resolution of public officials.

“What Is ADR?”, Business and Society Exploring Solutions wiki, BASESwiki.org [1] Stephen B. Goldberg and others, Dispute Resolution (Boston: Little, Brown and Company, 1985), Page-3.

[1] Spangler, Brad. “Alternative Dispute Resolution (ADR).” Beyond Intractability. Eds. Guy Burgess and Heidi Burgess. Conflict Research Consortium, University of Colorado, Boulder

1.3 Basic ADR Processes:

Today, ADR is used to settle a variety of disputes in American institutions, including the family, churches, schools, the workplace, government agencies, and the courts.

ADR is not widely used in cases of intractable conflict until those conflicts seem to become ready (some say “ripe”) for resolution. This sometimes happens when the conflict reaches a hurting stalemate- a situation where it becomes clear that neither side can win; yet, they are being substantially hurt by continuing the struggle.

Ripeness is crucial for ADR processes to work effectively, and ADR has been used in appropriate cases. For example:

  • Arbitration and negotiation have become common ways to resolve difficult international business disputes;
  • Mediation and arbitration are now commonly used to settle labor-management disputes that often used to seem like intractable
  • International mediation has been used to resolve difficult international and ethnic conflicts, with varying degrees of success;
  • Consensus building has become a popular process for dealing with public-policy disputes, especially intractable environmental disputes.

1.4 ADR in Bangladesh:

In June 2000, formalized ADR was introduced in Bangladesh by means of court-annexed judicial settlement pilot projects, in an effort to decrease delays, expenses and the frustrations of litigants laboring through the traditional trial process. The pilot program began in a collaborative effort with ISDLS in a series of Bangladeshi legal studies of Californian ADR systems. Three Pilot Family Courts were established in the Dhaka Judgeship, which exclusively used judicial settlement to resolve family cases including: divorce, restitution of conjugal rights, dower, maintenance and custody of children. An amendment to the Code of Civil Procedure was not necessary due to an existing 1985 Family Courts Ordinance, which authorized the trial judge to attempt reconciliation between parties prior to and during trial. The pilot courts were staffed by 30 Assistant Judges selected from all over Bangladesh, lawyers and non-lawyers, who were given training by a United States mediation expert (organized by ISDLS). During this assignment, the Assistant Judges were relieved of all other formal trial duties.

                                         Characteristics of ADR

2.1 Meanor: That depends on the subject matter. If there are to be three arbitrators, then it would be a good idea, if the subject is complex, to have at least one who is familiar with the turf and can communicate with the others. If there is to be only one arbitrator, then he or she should be at least familiar with the subject. The lawyer will be able to write in understandable language which is the language that any reviewer will be familiar with.

2.2 Emmert: When selecting an ADR neutral several factors should be considered.

A good neutral should have at least 10 years of experience in his chosen field, solid knowledge of applicable rules, procedures, and law or industry practices, and a thorough understanding of his or her role and authority.

An arbitrator must have the judicial capacity to manage arbitrations efficiently and effectively. A mediator must be a good problem solver; pursuing collaborative solutions and generating ideas and proposals that are consistent with case facts and workable for opposing parties.

Finally, a good neutral is held in the highest regard by peers for integrity, fairness and good judgment, and willing to make appropriate disclosures in accordance with applicable ethics standards.

2.3 Levie: Because disputes and the parties are unique, every selection process should be tailored to them. The obvious criteria include: process expertise; subject-matter expertise, judicial or litigation background; mediation style/temperament; approach to arbitration process; intelligence; ability to learn quickly and thoroughly; geographic location; and rates and fees.

 If a case involves highly technical or specialized matters consider whether it makes sense to use a neutral that has considerable experience resolving those types of disputes or who possesses the capability to learn quickly and work competently with counsel. There are many former judges and litigators who possess these talents and skills.

Characteristics To Consider When Selecting “The Right” ADR Neutrals

Sunday, April 1, 2007

 Norris, McLaughlin & Marcus, P.A. John E. Osborn P.C.The lawyers and jurists

Conciliation of Corporate body and Community Management”. www.legislation.qld.gov.au/Acts_SLs/Acts_SL.htm. Derived on 01-12-2011.

2.4 Dreier: There is a distinct difference between the neutral you pick for an arbitration and one that you pick for a mediation. For either, you want to know up front whether the neutral can show proven results. With mediations, indicia are a high success rate of settlements, repetitive work from counsel, a general reputation for legal ability, fairness, thoroughness and speedy disposition of the matter. For arbitrations, you can add the traits of decisiveness and efficient case management.

Another difference between the two types of neutrals is the background of the person you would choose. Look for an arbitrator who might favor your cause, within the bounds of impartiality and fairness. For mediation, where you want the mediator to aid in driving a settlement on favorable terms, pick one of your adversary’s favorite mediators, provided you trust the mediator’s fairness and impartiality. Yet, unless the distance to be travelled by the neutral, the parties or attorneys is unreasonably long, distance should not keep you from a superior arbitrator or mediator As to price, this should be a minor factor, especially if the matter in difference is sizeable. An additional few hundred dollars in fees that result in time saved is money well spent.

2.5 Osborn: Our practice focuses on the litigation of complex construction, environmental and real estate matters. Because the outcome of these cases is often determined by the interpretation and analysis of engineering, scientific and technological information, many attorneys in our field would choose an ADR neutral principally based upon his or her technical background. In our experience, the neutral’s technical background should very seldom be the primary criterion. We believe that technical background is secondary because, when it comes down to it, the most effective neutral is one who has extraordinary listening skills, in depth ADR experience and training, and well developed coping and problem solving abilities.

2.6 Rauer: This is actually a more complex question than it would seem at first blush. There are certain nearly universal qualities sought for any neutral: impartiality/neutrality often tops the list. Beyond that, the answer is dependent upon myriad factors. The Better Business Bureau has maintained an advantage in this area, in that it already maintains a longstanding reputation as a neutral/impartial dispute resolution provider; its neutrals may thus be accorded a level of inherent trust at the outset so crucial for effective resolution.

Characteristics To Consider When Selecting “The Right” ADR Neutrals

Sunday, April 1, 2007

 Norris, McLaughlin & Marcus, P.A. John E. Osborn P.C.The lawyers and jurists

Conciliation of Corporate body and Community Management”. www.legislation.qld.gov.au/Acts_SLs/Acts_SL.htm. Derived on 01-12-2011.

 There is a school of thought that subject matter expertise is crucial for the effective resolution of certain highly technical matters, while others proffer that an effective neutral is always effective at guiding the process, regardless of such specific expertise. From my perspective, the debate centers more upon the inherent trust of the parties in the neutral and thereby the process itself.

The bottom line? There must be full “buy-in” from both parties for any effective dispute resolution process – i.e., they both must appreciate the impartial nature of the selection process, trust in the competence of the neutral, and believe that they are starting on an even playing field with a legitimate chance for mutually acceptable resolution. Dispute resolution and the selection of an effective neutral is far from an exact science – nor can it be; indeed, when you are dealing with a party dominated process, the focus is necessarily upon them and their comfort level. That often translates to a belief in the process itself and thereby bolsters potential resolution.

2.7 Kreb: I recommend clients focus on: (1) prior neutral experience, (2) functional or subject matter expertise, and (3) industry experience. Prior neutral experience is important because it is beneficial to have a neutral that is comfortable being in the position – setting the agenda, presiding over discovery issues, procedural matters, and ultimately making a decision that will likely have a significant impact upon both of the parties to the dispute. We all know that comfort comes from not only being prepared, but also having lived the experience before. Prior experience is also important because the candidate may have a reputation that is either commonly known in certain circles, or can be accessed through minimal research.

Functional or subject matter expertise is also of great benefit. If the dispute involves accounting or tax matters, the parties should consider using a Certified Public Accountant or tax specialist in the neutral role. This subject matter expertise should be bolstered with industry experience. Industry experience may be critical in evaluating the behaviors of the parties and the expectations based upon industry standards. In any event, having industry experience will shorten the learning curve for the neutral who is already familiar with the industry. The combination of these three factors serves to increase both the efficiency and the effectiveness of the ADR proceeding.

Characteristics To Consider When Selecting “The Right” ADR Neutrals Sunday, April 1, 2007 Norris, McLaughlin & Marcus, P.A. John E. Osborn P.C.The lawyers and jurists, Conciliation of Corporate body and Community Management”. www.legislation.qld.gov.au/Acts_SLs/Acts_SL.htm. Derived on 01-12-2011.


3.1 Advantages of alternative dispute resolution:

ADR is beneficial for resolving any critical dispute. The result varies from situation to situation but outcomes are more effective than of legal procedure. There are few key benefits of ADR:

(a)   Cost Saving:One of the largest reasons parties choose to resolve their disputes outside of the courts is cost. Judicial process for resolving any disputes involves court fees, documentation fees, advocate’s fees and many other extra costs. Moreover, if there is corruption present, the cost may rise even higher.ADR does not involve expert fees or courts costs. Alternative dispute resolution usually costs much less than litigation, allowing smaller financial disputes a financially viable way to be settled. ADR also saves the money of government.

(b)   Speed: Adjudicative process for resolving conflicts are very lengthy since there are court decisions upon which the hearing is dependent. Litigation can take over a year to resolve because of different timing and dates involved. Matters that are being solved using the ADR method may take months or even just weeks to be resolved. ADR can be arranged by the parties and the panelist as soon as they are able to meet. Compared to the court process, where waits of 2-3 years are normal, dispute resolution is as fast as the parties want it to be.

 (c)    Control:The parties have control over some of the processes in ADR. Usually selecting the method of ADR, selecting the panelist for the dispute resolution; the length of the process; and, in a mediations case, even the outcome are controlled and maintained by the parties. In case of lawsuit process the control is totally possessed by the court and supreme authority. Opposed to the court system, where the legal system and the judge control every aspect, ADR is much more flexible. Furthermore, in the case of arbitration the parties have far more flexibility in choosing the application of relevant industry standards, domestic law, the law of a foreign country, a unique set of rules used by the arbitration service, or even religious law, in some cases.

(d)   Confidentiality: Privacy is fully securitized when it comes to Alternative Dispute Resolution. ADR is conducted in private, therefore avoiding publicity from the media.  The public are also unable to attend. On the other hand disputes resolved in court are public and the judgments awarded are also in public. ADR provides certain resolution processes such as, Mediation, arbitration, and mini trials that are conducted in private maintain strict confidentiality.

Totaro, Gianna, “Avoid court at all costs” The Australian Financial Review Nov. 14 2008. (April 19, 2010). Derived 01-12-2011. Alternative Dispute Resolution”.www.nolo.com/legal-encyclopedia/mediation. Derived 25-11-2011.

 (e)   Experienced Neutral Panelists:The panelists are professional mediators and arbitrators with training and expertise in dispute resolution. Disputing parties are able to select their panelist from a list of qualified individuals who are specialized in specific aspects of environments. In the court system, binding decisions are made by judges who may lack expertise in different practices.

(f)     Cooperative Approach: All ADR services take place in a more informal, less confrontational atmosphere. This is more conducive to maintain a positive business relationship between the two parties. With mediation, specifically, the result is collaboration between the two parties. Therefore ADR is a process that looks into the best interest of both parties in order to conclude a compromised mutual decision.

(g)   Flexibility: Legal and non-legal disputes can be addressed during this process proving it to be more flexible. Some may think this is a suitable package in the sense that it takes into account fundamental concerns of the parties and offers remedies not available when at court.

(h)   Parties into Good Terms: The aim of ADR is to find a compromise solution which is satisfactory to both parties.  Court proceedings create a winner and a loser.  Using ADR to settle a dispute means businesses can remain on good terms and continue to trade with each other once their dispute is resolved.

The benefits or advantages of ADR is realized when the dispute or conflict is successfully resolved and all the participant parties respect and value the outcomes provided by such procedure. The failure to compromised decision pinpoints the weakness of ADR which to be adjusted for attaining fruitful outcome.

Totaro, Gianna, “Avoid court at all costs” The Australian Financial Review Nov. 14 2008. (April 19, 2010). Derived 01-12-2011. Alternative Dispute Resolution”.www.nolo.com/legal-encyclopedia/mediation. Derived 25-11-2011

3.2 Limitations of alternative dispute resolution:

There are several disadvantages blocking the way of successful dispute resolution and often affecting both parties sentiment to settle for a compromised decision. Some the disadvantages are:

(a)   Unequal Bargaining Power: In certain situations one side is able to control the other. Therefore a significant imbalance of power exists. For example, employment and divorce cases, making the courts a better option for a weak party.

(b)   Lack of Legal Proficiency– Where a dispute involves difficult legal points a mediator or arbitrator is unlikely to have the same legal expertise and knowledge as a judge. Dispute can be of various situations such as, commercial conflicts, social conflicts, legal conflicts and many others which require specialized mediator. Most of the cases the mediator does not possess a judge’s point of view.

(c)    No System of Specific Model– It isn’t easy to predict the outcome of a dispute decided through ADR as there is no system of precedent. Therefore, it is easier to obtain evidence from the other party in a lawsuit. Lack of system results in restricted prediction of outcomes.

(d)   Enforceability – Most forms of ADR are not legally binding, making any award difficult to enforce. Legal arbitration has some kind of process for internal appeals, which enables the decision as binding and only subject to the review of court.

(e)   Required Court Action: The arbitrator’s decision can require a court action if one of the parties refuse to accept the arbitrator’s decision. This would not only create chaos but also a mandatory review by the court. Thus, ADR sometimes raises the question of biasness of arbitrator’s decision. Also, there is very limited opportunity for judicial review of an arbitrator’s decision

(f)     Might not be A Good Fit: Alternative dispute resolutions generally 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.

(g)   Limits Discovery Process: ADR generally proceeding without the protections offered parties in litigation, such as those rules governed through discovery. Courts generally allow a great deal of latitude in the discovery process, which is not active in alternative dispute resolution.

“International,Arbitration,Corporate,Attitudes”www.pwc.co.uk/eng/publications/international_arbitration_2008.html. Derived on 02-12-2011. An act to restate and improve the law relating to arbitration.www.legislation.gov.uk/ukpga/1996/23/contents. Derived 25-11-2011

4. Conclusion:

Essentially the advantages and disadvantages of Alternative Dispute Resolution (ADR) are important to consider before agreeing to any sort of ADR techniques. It reduces the chances of unknowingly agreeing in any arbitration. The perception of advantages over the cons of ADR fully depends on situation to situation where the parties are in severe need of perusing such techniques to attain mutual interest. After satisfying certain standards, many lease agreements and employee contracts have mandatory arbitration provisions which will usually be enforced. ADR can be a good alternative to the courts as long as it is used in the exact way and for the exact type of disputes. Though there are few minor deficiencies, ADR can save both time and cost and legal fees.

ADR has proven very helpful in many different types of legal disputes. These include divorces and other family matters, professional liability cases, personal injury situations, insurance issues, and commercial law disputes. The efficiency of Arbitration, Conciliation, Lok-Adalats, Mediation, Negotiation as a means of providing quicker, faster, cheaper, efficient and some what agreeable settlement, in a private atmosphere, without publicizing the issue has made the ADR system a hot favorite amongst both litigants as well as corporate, The popularity and acceptability of the system is quite evident from the fact that, now even courts of law are seriously encouraging this concept.

“What You Need to Know about Dispute Resolution: The Guide to Dispute Resolution Processes.” American Bar Association. http://www.abanet.org/dispute/draftbrochure.pdf. Derived on 27-11-2011. “Alternative Dispute Resolution”.www.nolo.com/legal-encyclopedia/mediation. Derived 25-11-2011.


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