by Nicola Davies.
Alternative Dispute Resolution (ADR) has become an increasingly popular method of resolving disputes rather than using the Court process. Mediation is probably the best-known form of ADR. Here a neutral person, the mediator actively helps the parties to try to reach a negotiated settlement.
The mediator will try to develop constructive communications and build consensus between the parties. Typically, mediation involves the parties meeting separately with the mediator. Anything said in these meetings is confidential and isn’t passed on to the other party without express permission. In these meetings the mediator explores what each party really wants and works towards achieving it.
During the meetings the mediator is often asked to pass offers between the parties as the negotiations advance. If the parties reach a solution, it’s normally recorded in writing and this will be binding on the parties as a contractual agreement.
There are many other types of ADR. These include, for example, expert determination.
Here, the parties appoint an independent expert under an agreed contract.
The expert is instructed to make a binding decision, usually on the key disputed points between the parties. So normally the expert is asked to determine technical issues relating to liability and/or valuation issues concerning the amount being claimed.
Arbitration instead of litigation
It’s commonly used in commercial contractual disputes and is a particularly common choice or required in statute in agricultural tenancy matters.
Whilst the process is similar to litigation it’s usually less formal and more flexible, particularly as the parties can normally choose the arbitrator and decide what procedure they want to follow. An arbitrator’s award is confidential but binding on the parties.
So why might a party consider an alternative to litigation to resolve a dispute? Litigation should normally be the last resort. The Court can financially penalise a party that starts court proceedings without considering ADR, or after failing to participate properly in an ADR process. Even if the party is successful in the litigation.
In addition, ADR procedures are usually quicker and cheaper than litigation if adopted at the right time, too soon and parties may not have enough information to reach an agreement, too late and a party’s costs’ may to too high to consider negotiating terms. When it comes to commercial disputes, an ADR process will protect the business from the negative impact of court proceedings. Court proceedings may even cause parties to lose productivity. ADR procedures, conducted in private, may minimise these adverse consequences of a dispute; whereas well publicised court proceedings often make them worse. Finally, ADR can offer a wide variety of settlement options over and above what a Judge can award in litigation.
Dr Nerys Llewelyn Jones is an Accredited ADR Mediator and regularly mediates disputes in a wide range of areas including contract disputes, agricultural tenancies, planning, property disputes and contentious probate and trust matters. Please call 01558 650 381 for further information.