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ALTERNATIVE DISPUTE RESOLUTION

Advantages and Disadvantages

Aditya Dassaur 5th Sem Section- A Roll No-206/10

I also want to thank my family and friends for their support. Ms.Page |1 ACKNOWLEDGEMENT I would like to thank my ADR teacher. Jasneet. In the end. this project would not have been possible. I would also like to thank the library staff for making available the books required. for giving me an opportunity to work on this project. Without her support and cooperation. .

In this case. Thus. dispute is referred to as a disagreement or argument between the parties. The aspects of ADR are perhaps extended since there are different methods and implications of resolving disputes. The dispute generally takes place between two parties which can be a person or a group of person composing a single entity. This dispute can be between individuals and corporations and even between public officials. different parties try to resolve the dispute which they considered to result with the best outcome. Parties comprise of plaintiff and defendant. The resolution of ADR is not only for commercial conflicts but also in many cases found in the dispute resolution of public officials. Perhaps. . the benefits are widespread and considered as most effective ones. Though the techniques have disadvantages. In general terms. plaintiff is the person who brings charges and files a suit and defendant is the person accused with charges. The major types of ADR and their characteristics are renowned amongst the law practitioners as well is to the lawyers. Dispute can be resolved in both using legal jurisdiction and also compromising settlement without reaching the court. Due to quicker and cost effective decision capability of ADR. Thus there is necessity of Alternative Dispute Resolution (ADR) in order to ensure justified resolution without the involvement of legal jurisdiction and court.Page |2 INTRODUCTION Alternative Dispute Resolution (ADR) consists of methods and techniques to deal with disputes without involving lawsuit or any other litigation process. it has gained noticeable popularity among the commercial and social parties around the world. ADR serves significant deal of settling a dispute or conflict.

with (or without) the help of a third party. the perception that ADR imposes fewer costs than litigation. such as collaborative law. such as litigation or arbitration. Despite the resistance of many renowned parties and advocates. It is a cooperative term for the ways that parties can settle disputes. It is basically a substitute of formal court hearing. a preference for . 2. Consensual processes. The rising popularity of ADR can be explained by the increasing caseload of traditional courts. The conflict is resolved by considering satisfying at least some of each side’s needs and addressing the interest. court requires the parties to execute of some type of ADR before the permission of case trial. ALTERNATIVE DISPUTE RESOLUTION (ADR) Alternative Dispute Resolution (ADR) includes dispute resolution mechanisms and techniques that perform as a means for disagreeing parties to attain an agreement short of lawsuit. in which the parties attempt to reach agreement. Thus it is in simple form called alternative dispute resolution (ADR). ADR are conducts and methods of resolving conflicts outside the judicial practice. in which a judge. jury or arbitrator determines the outcome. Dispute resolution processes fall into two major types: 1.Page |3 DISPUTE RESOLUTION Dispute resolution refers to the settlement of conflicts or arguments between various parties. conciliation. mediation. Even now in many situations. Adjudicative processes. or negotiation. These processes are not influenced by the court judgment and settlement is rather privately decided. ADR has gained prevalent reception both among the general public and legal profession.

1 Totaro. The perceived advantages and disadvantages of ADR Therefore. “Avoid court at all costs” The Australian Financial Review Nov. Thus. The third critical factor indicates the perception of parties regarding the pros and cons of ADR. (April 19. Gianna. The degree to which disputants and their advisors are responsive of ADR 2. 2010). ADR can be successfully implanted for resolving critical dispute issues. The adoption of ADR depends on three major factors: 1. since legal hearing is perhaps avoided. Many of the sovereign countries refer ADR as an extra judicial procedure (i. The sufficiency of the supply of ADR services for those that would wish to take-up ADR services 3. and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute 1. both the parties require being fully conscious of the advantages and disadvantages prior to the successful implication of ADR. Some of the senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly in favor of the use of mediation to settle disputes2.com/abstract=1599420. Derived 01-12-2011. by satisfying the three crucial factors.Page |4 confidentiality.e. Australia). 2 SSRN: http://ssrn. . 14 2008. Derived 20-12-2011.

The types of mentioned ADR techniques differ based on the countries culture and traditions. The benefits to the parties involved are that it is completely private and it’s fast and cheap.Page |5 TYPES OF ADR Alternative Dispute Resolution is essentially categorized into 4 major types: (a) (b) (c) (d) Negotiation Mediation Conciliation. Generally the independent ADR techniques apply similar techniques and set of negotiation skills in resolving conflicts. NEGOTIATION ADR process is the simplest for negotiation. for example mediation programs and ombudsmen offices within organizations. According to this process two people having a dispute can negotiate and come to a solution themselves. . and Arbitration ADR is also applicable alongside the existing legal system such Sharia courts within the jurisdiction of Common Law. The historic types of ADR techniques are defined in two ways: (1) Methods for resolving disputes outside of the official judicial mechanisms (2) Informal methods attached to official judicial mechanisms Additionally there are independent methods.

com/legal-encyclopedia/mediation. Conciliation is not legally binding on the parties. Even when negotiation fails at these early stages of a dispute and court proceedings start solicitors will usually continue to negotiate on their client’s behalf. William Ury. Mediation is not legally binding on the parties. The job of the mediator is to consult with each party and see how much common ground and interest there is between them4. 4 Simkin. This results in many cases being settled out of court. S/he will be expected to recommend ways in which a compromise could be reached. Mediation and the Dynamics of Collective Bargaining. S/he should act as an initiator. (1971). MEDIATION According to this ADR a neutral person (the mediator) assists the parties to reach a compromise. and Bruce Patton. . The mediator doesn’t offer an opinion. W.Page |6 Where parties to a dispute cannot resolve it themselves they possess authority to instruct solicitors who will negotiate on their behalf3.. Derived 25-11-2011. however. Getting to Yes: Negotiating Agreement without Giving In (New York: Penguin. Based on the opinion of Centre for Dispute Resolution it is found that around 80% of the disputes that are dealt reach a settlement without the need for any court action5. Mediation is most suitable where there is some chance that the parties will co-operate. CONCILIATION Conciliation is similar to mediation where a neutral third party helps the parties to resolve their dispute. Washington DC 5 “Alternative Dispute Resolution”. Derived on 01-12-2011. The Advisory.www. taking offers between the parties. the conciliator plays a more dynamic role in the process. 1991. E.nolo. Bureau of National Affairs Books. Conciliation and Arbitration Service (ACAS) are used by many employers and 3 Roger Fisher.

The agreement to go to arbitration can be made by the parties at any time. The parties can agree the number of arbitrators who will hear their dispute.html. 7 “International Arbitration: Corporate Attitudes”. There is also the Institute of Arbitrators who will provide trained conciliators to parties who wish to settle a dispute7. Derived on 02-12-2011.legislation.uk/ukpga/1996/23/contents. . It could be three. ARBITRATION Among the all the ADR processes. who will make a judgment on their behalf. There are few key benefits of ADR: (a) Cost Saving: One of the largest reasons parties choose to resolve their disputes outside of the courts is cost. In this process the parties with a disagreement transfer their dispute to a third party. arbitration is the most formal method used settle any dispute. The parties will normally appoint someone who is a professional in their particular area of business. ADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION ADR is beneficial for resolving any critical dispute. The success rate of such ADR process is found to be around 60% without the necessity of hearing the Employment Tribunal. Judicial process for resolving any disputes 6 An act to restate and improve the law relating to arbitration.www. This ruling will then be legally obligatory on the parties.gov. Derived 25-11-2011.uk/eng/publications/international_arbitration_2008. Arbitration ADR is strictly followed by Arbitration Act 19966.Page |7 Trade Unions to settle disputes before (and sometimes during) industrial action takes place. The result varies from situation to situation but outcomes are more effective than of legal procedure.co. http://www. It can be written into a business contract by what is called a Scott v Avery clause or the parties may just agree on arbitration when a dispute arises. two or just one person.pwc.

Page |8 involves court fees. or even religious law. The public are also unable to attend. Moreover. in a mediations case. dispute resolution is as fast as the parties want it to be8. ADR also saves the money of government. in some cases. domestic law. In case of lawsuit process the control is totally possessed by the court and supreme authority.org/dispute/draftbrochure. if there is corruption present. Opposed to the court system. . where the legal system and the judge control every aspect.ADR does not involve expert fees or courts costs. selecting the panelist for the dispute resolution. Furthermore. (b) Speed: Adjudicative process for resolving conflicts are very lengthy since there are court decisions upon which the hearing is dependent. a unique set of rules used by the arbitration service. Alternative dispute resolution usually costs much less than litigation. Litigation can take over a year to resolve because of different timing and dates involved. and. allowing smaller financial disputes a financially viable way to be settled.” American Bar Association.pdf. Matters that are being solved using the ADR method may take months or even just weeks to be resolved. where waits of 2-3 years are normal. advocate’s fees and many other extra costs. the law of a foreign country. Usually selecting the method of ADR. Compared to the court process. ADR can be arranged by the parties and the panelist as soon as they are able to meet. Derived on 27-11-2011. the cost may rise even higher.abanet. (c) Control:The parties have control over some of the processes in ADR. in the case of arbitration the parties have far more flexibility in choosing the application of relevant industry standards. the length of the process. (d) Confidentiality: Privacy is fully securitized when it comes to Alternative Dispute Resolution. http://www. On the other hand disputes 8 “What You Need to Know about Dispute Resolution: The Guide to Dispute Resolution Processes. ADR is conducted in private. therefore avoiding publicity from the media. even the outcome are controlled and maintained by the parties. documentation fees. ADR is much more flexible.

ADR provides certain resolution processes such as. Court proceedings create a winner and a loser. With mediation. less confrontational atmosphere. Mediation. (h) Parties into Good Terms: The aim of ADR is to find a compromise solution which is satisfactory to both parties. the result is collaboration between the two parties. (f) Cooperative Approach: All ADR services take place in a more informal. (g) Flexibility: Legal and non-legal disputes can be addressed during this process proving it to be more flexible. specifically. Disputing parties are able to select their panelist from a list of qualified individuals who are specialized in specific aspects of environments. The benefits or advantages of ADR is realized when the dispute or conflict is successfully resolved and all the participant parties respect and value the outcomes provided by such procedure. Therefore ADR is a process that looks into the best interest of both parties in order to conclude a compromised mutual decision. This is more conducive to maintain a positive business relationship between the two parties. In the court system. . (e) Experienced Neutral Panelists:The panelists are professional mediators and arbitrators with training and expertise in dispute resolution. Some may think this is a suitable package in the sense that it takes into account fundamental concerns of the parties and offers remedies not available when at court. The failure to compromised decision pinpoints the weakness of ADR which to be adjusted for attaining fruitful outcome. binding decisions are made by judges who may lack expertise in different practices. arbitration. and mini trials that are conducted in private maintain strict confidentiality.Page |9 resolved in court are public and the judgments awarded are also in public. Using ADR to settle a dispute means businesses can remain on good terms and continue to trade with each other once their dispute is resolved.

Also. Therefore. Some the disadvantages are: (a) Unequal Bargaining Power: In certain situations one side is able to control the other. Therefore a significant imbalance of power exists.P a g e | 10 DISADVANTAGES RESOLUTION OF ALTERNATIVE DISPUTE There are several disadvantages blocking the way of successful dispute resolution and often affecting both parties sentiment to settle for a compromised decision. Legal arbitration has some kind of process for internal appeals. ADR sometimes raises the question of biasness of arbitrator’s decision. making any award difficult to enforce. which enables the decision as binding and only subject to the review of court.Most forms of ADR are not legally binding. legal conflicts and many others which require specialized mediator. For example. Lack of system results in restricted prediction of outcomes. commercial conflicts. Dispute can be of various situations such as. employment and divorce cases make the courts a better option for a weak party. (b) Lack of Legal Proficiency. there is very limited . (e) Required Court Action: The arbitrator’s decision can require a court action if one of the parties refuse to accept the arbitrator’s decision. social conflicts. it is easier to obtain evidence from the other party in a lawsuit.It isn’t easy to predict the outcome of a dispute decided through ADR as there is no system of precedent. (d) Enforceability . Most of the cases the mediator does not possess a judge’s point of view.Where a dispute involves difficult legal points a mediator or arbitrator is unlikely to have the same legal expertise and knowledge as a judge. This would not only create chaos but also a mandatory review by the court. (c) No System of Specific Model. Thus.

P a g e | 11 opportunity for judicial review of an arbitrator’s decision. Courts generally allow a great deal of latitude in the discovery process. which is not active in alternative dispute resolution. (f) Might not be a Good Fit: Alternative dispute resolutions generally resolve only issues of money or civil disputes. A court might also overturn an arbitrator’s decision if it decided issues that were not within the scope of the arbitration agreement. . (g) Limits Discovery Process: ADR generally proceeding without the protections offered parties in litigation. They cannot result in an order requiring one of the parties to do or cease doing a particular affirmative act. Alternative dispute resolution proceedings will not result in injunctive orders. such as those rules governed through discovery.

ADR can save both time and cost and legal fees.P a g e | 12 CONCLUSION Essentially the advantages and disadvantages of Alternative Dispute Resolution (ADR) are important to consider before agreeing to any sort of ADR techniques. Though there are few minor deficiencies. . It reduces the chances of unknowingly agreeing in any arbitration. The perception of advantages over the cons of ADR fully depends on situation to situation where the parties are in severe need of perusing such techniques to attain mutual interest. After satisfying certain standards. ADR can be a good alternative to the courts as long as it is used in the exact way and for the exact type of disputes. many lease agreements and employee contracts have mandatory arbitration provisions which will usually be enforced.

ht m  http://en. Business and Society Exploring Solutions wiki. Conciliation and Alternative Dispute Resolution Systems. Asia Law House.org/adr. Delhi  S.wikipedia. Ltd.org/wiki/Arbitration BOOKS:  “Alternative dispute resolution.org  http://www.” 1sted.” Ed. Myneni.. Rao and William Sheffield.co. BASESwiki. “Arbitration.P a g e | 13 BIBLIOGRAPHY INTERNET SITES:  “What Is ADR?”. Pvt.britishcouncil. Universal Law Publishing Co.html  http://courts. Hyderabad.us/Courts/Superior%20Court/ADR/ADR/adr_history.C. 2004.  Gary Born.R. “International Commercial Arbitration” (2009 Kluwer) .uk/types. 1997. P.adrgroup.state.doc  http://www. 1 st ed.de.