When a dispute arises, whether in a business or personal matter, and it cannot be resolved between the parties on their own, professional intervention may be sought. Alternative Dispute Resolution (ADR) encompasses a range of techniques for resolving a dispute without involving the court.
Almost all matters can be resolved through ADR, from divorce and other personal issues to business matters like employment issues and large-scale commercial disputes.
In this article, the Langley Wellington dispute resolution team explore some of the key aspects of Alternative Dispute Resolution.
What are the different types of Alternative Dispute Resolution (ADR)?
There are various methods by which ADR is conducted. The nature of the issue will affect which ADR method is most suitable, and some are used more frequently than others.
- Mediation is a popular form of Alternative Dispute Resolution. The parties will be separated (real or virtually) and a qualified mediator will alternate between the two, looking for areas that can be agreed upon and where compromises can be made. If successful, the mediator will draw up an agreement between the parties (which can be attached to a consent order if proceedings have started), bringing the matter to a close. Mediations are non-binding unless attached to a consent order by agreement. Therefore, parties can fully explore all of the possible grounds for agreement. In addition, all mediations are conducted ‘without prejudice’, meaning any discussions or offers made during the process cannot be referred to if the mediation continues.
- Arbitration clauses are often inserted into commercial contracts as an alternative to litigation, which parties must consider (if not abide by) before issuing proceedings. In the context of dispute resolution, parties can choose an arbitrator or have one appointed for them, typically an expert in the relevant field. The arbitrator’s decision, known as an ‘Arbitration Award,’ is mutually binding and enforceable through the courts. Before determining the timetable and procedure, the arbitrator meets with each party individually, allowing for flexibility. At the conclusion of the proceedings, the arbitrator issues an award, similar to a court judgment, which benefits one party. Although arbitration awards are binding on factual matters, they can be appealed to the High Court solely on points of law. Arbitration awards represent the only form of Alternative Dispute Resolution (ADR) that carries legally binding force and can be enforced through the courts if not adhered to. It’s essential to note that ADR encompasses various options beyond arbitration. The following are just a few examples:
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Early Neutral Evaluation |
A neutral third party is asked to give a preliminary view of their positions and make a recommendation. |
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Expert Appraisal |
An industry expert gives a non-binding opinion. |
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Judicial Appraisal |
A legal expert offers a preliminary appraisal of the merits of each party’s legal position. |
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Expert Determination |
An expert gives a binding opinion on the dispute. This cannot be enforced as a court order but does form a binding contract. |
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Final Offer Arbitration |
An arbitrator is asked to choose between the ‘final offers’ proposed by each party. |
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Med-Arb |
Mediation is first attempted by both parties with the provision that if it does not work, they proceed to arbitration. |
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Mini-Trial |
An independent party chairs the negotiations to see if the matter can settle. |
What if ADR fails?
Litigation is a formal legal process. When a matter is litigated, a set of rules are followed, set out by the courts and the court dictates the path and pace at which the process proceeds. A set of deadlines are set for the parties to take action whilst preparing for a final hearing. Litigation can be complex and time-consuming. In addition, due to the time and individuals involved (solicitors, barristers, courts, experts and judges), the process can become expensive. Whilst most litigation is often resolved before a final hearing where a judge will determine the outcome of the case, some disputes cannot be resolved pre-court, with the final outcome being a full hearing before a Judge.
In most cases, litigation is a ‘last resort’ for resolving a dispute, and it is widely encouraged to utilise Alternative Dispute Resolution methods where possible.
In addition, the court will often frown upon parties who opt for litigation without first attempting to resolve the dispute through informal means. Where a party unreasonably refuses to engage in ADR, they can impose a costs penalty on them so that they will not recover any legal costs in the case even though they eventually succeed.
What are some benefits of ADR?
As mentioned above, it is widely encouraged that parties should always try to resolve their matter outside of the court and the litigation process.
Some of the main benefits of engaging in Alternative Dispute Resolution include:
- Less costly
- Quicker
- Flexible
- Confidential
- Informal compared to litigation.
- Relationships are more likely to be maintained.
Overall, ADR is less rigid compared to the court process, and since the process is generally quicker and less confrontational, the impact of the dispute is typically reduced. By utilising ADR, the parties may be able to maintain or restore the relationship.
Which method of ADR is best?
There is no ‘best’ method of Alternative Dispute Resolution, but rather, some types are more suited to particular cases depending on the circumstance. Initially, all contracts governing the relationship should be checked. For many contracts, there will be a clause specifying how disputes will be resolved. Furthermore, the parties’ chosen method should be proportionate to the dispute. With this, for example, the cost of the process, including that of instructing any relevant third parties (such as an industry expert), should be proportionate to the value of the dispute itself.
Dispute Resolution Solicitors
At Langley Wellington, our team of experienced dispute resolution solicitors have been supporting clients with a variety of disputes for many years. Our expertise covers:
- Professional Negligence
- Wills Disputes and Contentious Probate
- Compensation Claims and Personal Injury
And Commercial Disputes, including:
We understand that you will want to do all you can to resolve your matter quickly and efficiently with minimal fallout. Therefore, we draw on our industry knowledge and Alternative Dispute Resolution methods to assist you.
To speak to a member of our team today, please call 01452 521286 (Gloucester) or 01242 269998 (Cheltenham) or email lawyers@langleywellington.co.uk. Alternatively, please fill in this contact form.
This blog is not intended to be taken as advice or acted upon. If you are seeking legal advice, please get in touch with our team of solicitors.