Transcript Alternate Dispute Resolution - ADR

Alternate Dispute
Resolution - ADR
ADR
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Most people think of legal disputes being resolved through the courts;
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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
Problems with Litigation
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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
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ADR allows for this.
Alternate Dispute Resolution ADR
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These alternative methods are known as
“Alternative Dispute Resolution” and
include
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Arbitration
Conciliation
Mediation
Negotiation
Arbitration
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Arbitration can be defined as:
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The arbitrator/s should determine the case based
upon the facts and evidence presented and the
decision is made in a
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“ A private process of dispute resolution between parties to
an arbitration agreement.”
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.
Arbitration Act 1996
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The main principles of arbitration are given
in this Act.
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Section 1 states
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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.
Arbitration Act 1996
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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.
Arbitration Act 1996
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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.
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The role of the court is one of support.
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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)
Arbitration Agreement
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The Arbitration Act 1996 is divided into
 mandatory sections
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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.
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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
Arbitration Agreement
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An Arbitration Agreement can be defined as;
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For the arbitration agreement to be applicable or
enforceable
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“an agreement to submit to arbitration in present or
future disputes - contractual or not”. S.6.
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).
Arbitration Agreement
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The role of the arbitrator or panel is given
in s33 and is a mandatory section.
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To act fairly and impartially between the
parties
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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
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avoiding delays or expense
to provide a fair means for the resolution of matters
falling to be determined.
Arbitration Agreement
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Each of the parties involved must be
notified of the appointment of an arbitrator.
If one party has made a request
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the other parties have 28 days to make the
joint agreement.
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If no agreement in place the court may be
approached.
The person/s nominated for arbitration
should be informed and should confirm
their agreement.
Arbitration Agreement
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Although the arbitration panel or arbitrator does not
have the power of the courts he/she
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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.
Arbitration Agreement
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A challenge to the award can be made for
the following reasons;
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lack of substantive jurisdiction
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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.
Arbitration Agreement
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The right to challenge or object may be
lost if
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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;
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confirm the award
vary the award
set aside the award in part or as a whole.
Advantages/Disadvantages
Advantages
Disadvantages
Speed
Lack of Legal Aid
Flexible
Timescale for arbitration problematic
Convenience
Litigation is sometimes more suitable
particularly if dispute based on a
point of law
Privacy
If 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.
Mediation
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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.
Mediation
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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
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Neighbour disputes
Employment disputes
Discrimination
Family disputes.
The important point in mediation is that the
parties are in control;
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Both parties are put in a win/win situation if they are
prepared to negotiate and compromise.
Conciliation
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Similar to mediation in that a neutral third
party helps resolve the dispute,
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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.
Compromise/Negotiation
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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.
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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;
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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.
Advantages/Disadvantages
Advantages
Disadvantages
Speed
Lack of legal expertise
Accessibility
No system of precedent
Convenience
Imbalance of power – unfair dismissal
conciliation, the benefit of negotiated
agreement may be undermined
where there is a serious imbalance
of power.
Expertise
Decisions can be difficult to enforce
Conciliation between the parties
Cost less than litigation
High rate of customer satisfaction