2. Alternate Dispute Resolution - ADR

3. ADR Most people think of legal disputes being resolved through the courts; consulting a solicitor and sometimes also a barrister then having the matter resolved in a formal court hearing this is called LITIGATION. However, court hearings are sometimes not the best method of resolving a dispute. And for some types of legal problem, alternative mechanisms may be more suitable. Family construction contracts some consumer contracts commercial contracts employment cases

4. Problems with Litigation ADR is on the increase particularly since the Lord Woolf Reforms (see notes on Civil Justice Procedures). The problems with litigation: Too adversarial, continued contact between the parties may be required after the dispute. Technical expertise may be required, alternate methods of dispute resolution tend to employ technical experts in place of judges. Inflexible - ADR allows parties to take more control of proceedings. Imposed solution - ADR encourages agreement through negotiation. Publicity - Privacy may be required in some disputes ADR allows for this.

5. Alternate Dispute Resolution - ADR These alternative methods are known as “Alternative Dispute Resolution” and include Arbitration Conciliation Mediation Negotiation

6. Arbitration Arbitration can be defined as: “ A private process of dispute resolution between parties to an arbitration agreement.” The arbitrator/s should determine the case based upon the facts and evidence presented and the decision is made in a judicial fair impartial manner. It must be remembered that the arbitration stems from the arbitration agreement made by the parties themselves and not from the State.

7. Arbitration Act 1996 The main principles of arbitration are given in this Act. Section 1 states The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without necessary delay or expense. The parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest. In matters governed by this Part the court should not intervene except as provided by this part.

8. Arbitration Act 1996 The arbitration can be heard by one or more arbitrators. They do not need to be legally qualified but can act as judges or barristers and solicitors even though not legally trained. Many arbitrators are experts in their fields Engineering Medicine Construction. They are chosen as they will be able to understand the nature of the dispute before them. Where there is no agreement as to the number of arbitrators then one is appointed (s. 15) If the Arbitration agreement refers to arbitrators but no specific number then two are appointed and a further arbitrator can be appointed if the two do not agree.

9. Arbitration Act 1996 In an ideal situation the parties themselves come to an agreement as to who to appoint. In some cases the arbitrator will make their decisions based upon a paper submissions only in others a hearing is held. Unless the parties have agreed otherwise an arbitrator can act inquisitorially. The decision of the Arbitrator is binding. Intervention of the courts is minimal. The role of the court is one of support. If an order has been made to comply with an arbitration. And a party does not comply. A court order can be granted requiring compliance. (s.42)

10. Arbitration Agreement The Arbitration Act 1996 is divided into mandatory sections and non-mandatory sections. The parties cannot contract out of the mandatory sections. The arbiter panel must abide by the mandatory sections s. 33 sets out the general duty of the arbiter panel s.13 the application of the Limitations Acts s.66 the enforcement of the award s.67/68 the relates to challenge. In other aspects the parties have the freedom to agree to what suits them. E.g the law that is to be applied or the venue. The parties can exclude the jurisdiction of the court in relation to an appeal on a point of law. Either because the parties agreeing that there is to be no appeal on a point of law arising from the award or that reasons do not have to be given for the award.

11. Arbitration Agreement An Arbitration Agreement can be defined as; “an agreement to submit to arbitration in present or future disputes - contractual or not”. S.6. For the arbitration agreement to be applicable or enforceable it must be in writing and can include tape recordings and electronic submissions. S. 5 it must be clear and unambiguous. The arbitration agreement is separate to the agreement that underlies it. S.7. Harbour Assurance Co. (UK) ltd v Kansa General International Insurance Co Ltd (1993).

12. Arbitration Agreement The role of the arbitrator or panel is given in s33 and is a mandatory section. To act fairly and impartially between the parties giving each party a reasonable opportunity of putting his case and dealing with that of his opponents to adopt procedures suitable to the circumstances of the particular case avoiding delays or expense to provide a fair means for the resolution of matters falling to be determined.

13. Arbitration Agreement Each of the parties involved must be notified of the appointment of an arbitrator. If one party has made a request the other parties have 28 days to make the joint agreement. If no agreement in place the court may be approached. The person/s nominated for arbitration should be informed and should confirm their agreement.

14. Arbitration Agreement Although the arbitration panel or arbitrator does not have the power of the courts he/she can make peremptory orders and non compliance can give rise to sanctions. An award can be made which dismisses a claim if security for costs is not given when ordered. Section 44 allows for court interference to support an arbitrators orders. Through an application by one party. The award itself is usually enforced by the court under s66.

15. Arbitration Agreement A challenge to the award can be made for the following reasons; lack of substantive jurisdiction is there a valid arbitration agreement is the panel properly constituted. The matters submitted to arbitration in accordance with the arbitration agreement. Serious Irregularity. Exceeding powers of the arbitration agreement. Uncertainty or ambiguity in the award.

16. Arbitration Agreement The right to challenge or object may be lost if a party fails to object at the time or within the time agreed. However, where a challenge has been made to the court then the court may; confirm the award vary the award set aside the award in part or as a whole.

17. Advantages/Disadvantages AdvantagesDisadvantages SpeedLack of Legal Aid FlexibleTimescale for arbitration problematic ConvenienceLitigation is sometimes more suitable particularly if dispute based on a point of law PrivacyIf negotiations break down, the only course of action is to start again Choice of Arbitrator Award is Binding Cost less than litigation Access to the court on a point of law Arbitrators usually experts in their field Business between parties can continue whilst arbitration is taking place.

18. Mediation This is where a neutral mediator helps the parties to reach a compromise solution. The role of the mediator is to consult with each party and see how much common ground there is between them. The mediator will explore the position with each party; Looking at their needs Carrying offers to and fro Whilst keeping confidentiality. A mediator will not usually tell the parties their own views on the dispute; Their job is to act as a facilitator, So that the agreement is reached by the parties However, the mediator can give their opinion of the merits of the case if they have been asked by the parties.

19. Mediation Mediation is only suitable if there is some hope that the parties can co-operate. Companies who are used to negotiating contracts with each other are most likely to benefit from this approach, also Neighbour disputes Employment disputes Discrimination Family disputes. The important point in mediation is that the parties are in control; Both parties are put in a win/win situation if they are prepared to negotiate and compromise.

20. Conciliation Similar to mediation in that a neutral third party helps resolve the dispute, The main difference is that the conciliator will usually play a more active role. He will be expected to suggest grounds for compromise and possible basis for a settlement. In Industrial disputes ACAS can give an impartial opinion on the legal position of the parties.

21. Compromise/Negotiation Compromise is to be encouraged between litigants in all civil disputes/matters; The aim is to settle a matter before a costly and time consuming court case; As with mediation and conciliation it may be necessary for each party to stand back from a firm stance that they have taken; Negotiation commences when one party approaches the other party either directly or through a representative. A good example of this is a settlement discussion between parties; Community Legal Service Leaflet 23 “Alternative to Court” states that nine out of ten legal claims are settled without needing a trial. Negotiation can differ from conciliation and mediation as the negotiator is; not independent, can advise on the best course of action and will represent only one party The other party will normally have their own negotiator.

22. Advantages/Disadvantages AdvantagesDisadvantages SpeedLack of legal expertise AccessibilityNo system of precedent ConvenienceImbalance of power – unfair dismissal conciliation, the benefit of negotiated agreement may be undermined where there is a serious imbalance of power. ExpertiseDecisions can be difficult to enforce Conciliation between the parties Cost less than litigation High rate of customer satisfaction