Put simply, Alternative Dispute Resolution (ADR) is any means of settling disputes or differences, where negotiation has failed, without going to court. Typically it includes such options as mediation, early neutral evaluation, arbitration and conciliation. In suitable cases, ADR offers a real alternative to the formal litigation process, providing an invaluable tool for the quick and cost-effective resolution of disputes.
In the UK and Europe, the terms ADR and mediation are used interchangeably sometimes but, whilst mediation is recognised widely now as the leading ADR process, others are increasingly gaining favour, and which process is best will often depend on the nature of the dispute requiring to be resolved.
Mediation
Mediation is a flexible and entirely confidential process whereby the parties in dispute are assisted by an independent third party, the mediator, to work together towards resolving that dispute.
- The parties themselves attend, and participate fully in, the mediation.
- No solution is imposed upon the parties.
- The parties themselves decide the outcome and are only bound by it if they both (or all) agree to it.
- It is a wholly voluntary process and, if a solution cannot be reached, the parties are free to walk away without their legal positions being prejudiced in any way.
- It is often appropriate where parties have adopted entrenched positions or where there is some tension or conflict behind the scenes which is getting in the way of the parties being able to manage and resolve a dispute themselves. Through careful questioning, a skilled mediator can help the parties to move away from their negotiating positions and to better understand and articulate their interests. back
Early Neutral Evaluation
A form of ADR in which a neutral evaluator gives parties a frank but non-binding professional opinion as to how their dispute would be likely to be resolved if it were to go to a court hearing.
Particularly useful in situations where:
- there are contested facts and/or where there is a disagreement as to the law to be applied to a certain set of facts
- in order for the parties to believe and accept that their dispute has been satisfactorily dealt with, it is necessary for a suitably knowledgeable person to provide an impartial but influential opinion on the merits of the respective parties’ positions. back
Arbitration
A form of ADR involving the hearing and determination of a dispute by an impartial referee agreed upon by both parties.
- Arbiters may be selected for their special skills to suit the particular dispute.
- Arbiters’ awards are binding on the parties and often enforceable across international boundaries.
- The process itself is less formal than traditional litigation and it is usually open to the parties to decide which arbitration procedure they wish to use.
- Has the potential to be more flexible and cost effective than litigation.
- Particularly valuable in some disputes because confidentiality can be preserved.
Leaving aside those circumstances where the use of an arbiter is required by statute or under a contractual agreement, the use of an arbiter should also be considered in the same sorts of situations as would be appropriate for Early Neutral Evaluation, but perhaps where there is also a need to test the evidence or testimony of parties under oath. Arbitration is also appropriate where there is the need or desire for sanctions to be imposed or damages to be awarded. back
Conciliation
- A relatively informal ADR process in which the parties to a dispute, with the assistance of a neutral third party (the conciliator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement.
- The conciliator may:
- have an advisory role on the content of the dispute or the outcome of its resolution,
- make suggestions for terms of settlement,
- give expert advice on likely settlement terms, and
- actively encourage the participants to reach an agreement.
- In the event that agreement is not reached at conciliation the Conciliator may even make a recommendation but, just like a mediator, it is not a conciliator’s role to determine the dispute or impose a solution.
In practical terms, the distinction between mediation and conciliation has become increasingly blurred but if there are any differences between the two, they are that:
- the role of a conciliator is typically more pro-active and interventionist.
- the role of a mediator tends to be restricted more to that of a facilitator.
- whereas mediation may be, and is, used at any stage of a dispute, conciliation tends to be used more preventively, as soon as a dispute or misunderstanding surfaces: to stop a substantial conflict from developing.
bto’s team is committed to resolving disputes by the most appropriate and cost effective method for your circumstances. We are happy to guide you through the various options and recommend the best option for you. back
Contact
Alan Eadie
Partner, Glasgow