Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time.”

Abraham Lincoln

Introduction

Lord Justice Jackson has recently conducted the most comprehensive reform of the Civil Procedure Rules since their implementation. On the subject of Alternative Dispute Resolution (ADR) Jackson LJ commented:

There should be no rule changes. Only a culture change is required.

There should be a serious campaign to:

  • Ensure that all legal practitioners and judges are properly informed about the benefits of ADR; and
  • Alert the public and businesses to the benefits of ADR

At ICL Commercial Law we positively encourage the use of ADR as a means of resolving disputes as there are numerous benefits is terms of saving time, costs, and sometimes relationships.

What is ADR?

Alternative dispute resolution (ADR) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party. Despite historic resistance to ADR by many popular parties and their advocates, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In fact, some courts now require some parties to resort to ADR of some type, usually mediation, before permitting the parties’ cases to be tried (indeed the European Mediation Directive (2008) expressly contemplates so-called “compulsory” mediation; attendance that is, not settlement at mediation). The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR imposes fewer costs than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute. Some of the senior judiciary in certain jurisdictions, of which England and Wales is one are strongly in favour of the use of mediation to settle disputes.

ADR is generally classified into at least five types: negotiation, conciliation, mediation, collaborative law, and arbitration.

Negotiation

Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy various interests of two people/parties involved in negotiation process. Negotiation is a process where each party involved in negotiating tries to gain an advantage for themselves by the end of the process. Negotiation is intended to aim at compromise.

Conciliation

Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties separately in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement.

Conciliation differs from mediation in that the main goal is to conciliate, most of the time by seeking concessions. In mediation, the mediator tries to guide the discussion in a way that optimises parties’ needs, takes feelings into account and reframes representations.

Conciliation differs from arbitration in that the conciliation process, in and of itself, has no legal standing, and the conciliator usually has no authority to seek evidence or call witnesses, usually writes no decision, and makes no award.

In conciliation the parties seldom, if ever, actually face each other across the table in the presence of the conciliator.

Mediation

Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. Disputants may mediate disputes in a variety of domains, such as commercial, legal, diplomatic, workplace, community and family matters.

The term mediation broadly refers to any instance in which a third party helps others reach agreement. More specifically, mediation has a structure, timetable and dynamics that ordinary negotiation lacks. The process is private and confidential, possibly enforced by law. Participation is typically voluntary. The mediator acts as a neutral third party and facilitates rather than directs the process.

Mediators use various techniques to open, or improve, dialogue between disputants, aiming to help the parties reach an agreement. Much depends on the mediator’s skill and training.
The benefits of mediation include:

  • Cost – While a mediator may charge a fee comparable to that of a lawyer, the mediation process generally takes much less time than moving a case through standard legal channels. While a case in the hands of a lawyer or a court may take months or years to resolve, mediation usually achieves a resolution in a matter of hours. Taking less time means expending less money on hourly fees and costs.
  • Confidentiality – While court hearings may be reported in the public domain, mediation remains strictly confidential. No one but the parties to the dispute and the mediator(s) know what happened. Confidentiality in mediation has such importance that in most cases the legal system cannot force a mediator to testify in court as to the content or progress of mediation. Many mediators destroy their notes taken during a mediation once that mediation has finished.
  • Control – Mediation increases the control the parties have over the resolution. In a court case, the parties obtain a resolution, but control resides with the judge. Often, a judge cannot legally provide solutions that emerge in mediation. Thus, mediation is more likely to produce a result that is mutually agreeable for the parties.
  • Compliance – Because the result is attained by the parties working together and is mutually agreeable, compliance with the mediated agreement is usually high. This further reduces costs, because the parties do not have to employ a lawyer to force compliance with the agreement. The mediated agreement is, however, fully enforceable in a court of law.
  • Mutuality – Parties to a mediation are typically ready to work mutually toward a resolution. In most circumstances the mere fact that parties are willing to mediate means that they are ready to move their position. The parties thus are more amenable to understanding the other party’s side and work on underlying issues to the dispute. This has the added benefit of often preserving the relationship the parties had before the dispute.
  • Support – Mediators are trained in working with difficult situations. The mediator acts as a neutral facilitator and guides the parties through the process. The mediator helps the parties think outside of the box for possible solutions to the dispute, broadening the range of possible solutions.

Collaborative Law

Collaborative law (also called collaborative practice, divorce, or family law) is a legal process enabling couples who have decided to separate or end their marriage to work with their lawyers and, on occasion, other family professionals in order to avoid the uncertain outcome of court proceedings and to achieve a settlement that best meets the specific needs of both parties and their children without the underlying threat of contested litigation.

Arbitration

Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons, the arbitrators or arbitral tribunal, by whose decision (the “award”) they agree to be bound. It is a resolution technique in which a third party reviews the evidence in the case and imposes a decision that is legally binding for both sides and enforceable. Arbitration is often used for the resolution of commercial disputes, particularly in the context of construction related disputes, or international commercial transactions. The use of arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts.

Arbitration can be either voluntary or mandatory, although mandatory arbitration can only come from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur.

Arbitration is a proceeding in which a dispute is resolved by an impartial arbitrator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding. There are limited rights of review and appeal of arbitration awards.