ALTERNATIVE DISPUTE RESOLUTION

INTRODUCTION
 Rapidly developing society and human needs are increasing by manifolds.
 Increasing needs lead to conflict of interest.
 Citizenry is more aware about their individual rights.
 Litigation is resorted to by many such people who fall in conflict of interest with other in order to
settle the disputes.
 However, litigation has become expensive, time consuming and as a result thereof the Courts are
overburdened.
 Therefore, when litigation fails to meet the needs of the society, the alternative dispute resolution
methods are resorted as a mode of setting the dispute and difference amongst the parties.

TWO TYPES OF METHODS FOR CONFLICT RESOLUTION

 There are the following two types of methods for conflict resolution:
 Classic System;
 Alternative Methods (ADR)
 Classical System – It is represented by the Courts and seeks, in most cases punishing those who
violated the norm. It includes Courts, prosecutors, police etc. Parties go into this system when
they fail to solve the problem themselves.
 Alternative Methods (ADR) – Alternative dispute resolution methods include a category of
means and procedures for preventing and resolving the conflict assistance outside the Courts, the
methods includes arbitration, conciliation, mediation, negotiation etc.

MEANING OF ADR
 Alternative Dispute Resolution (ADR) is a term used to describe several different modes of
resolving legal disputes.
 It is experienced by the business world as well as common men that it is impracticable for many
individuals to file law suits and get timely justice.
 The Courts are backlogged with dockets resulting in delay of year or more for the parties to have
their cases heard and decided.
 To solve this problem of delayed justice ADR Mechanism has been developed in response
thereof.

RECOGNITION UNDER CIVIL PROCEDURE CODE

 Section 89
 Order X, Rule 1A – 1C
 It provides for the following four modes of ADR:
i. Arbitration;
ii. Lok Adalat;
iii. Conciliation;
iv. Mediation.

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 MERITS OF ADR

IMPORTANT POINTS – MERITS OF ADR

 Saves a lot of time.
 Saves a lot of money.
 Puts the parties in control by giving them opportunities to discuss their case by giving them a
forum to put forth their own views.
 Access to justice is much more easier and much faster.
 Focuses on issues which are important to the parties rather than merely stressing upon the legal
rights of the parties.
 More flexible remedies than the Court.
 It maintains the confidentiality of the disputes.
 Reduces stress among parties and produces good results.
 ADR provides finality.

More flexibility.
 In the case of arbitration, the parties have far more flexibility to select what procedural and
discovery rules will apply to their dispute.
 They can choose to apply relevant industry standards, domestic law, the law of a foreign country,
etc.

Select your own Arbitrator or Mediator.

 The parties can often select the arbitrator or mediator that will hear their case, typically selecting
someone with expertise in the substantive field involved in the dispute.
 The arbitrator (or panel members) need not even be an attorney.
 In this way the focus can be on the substantive issues involved rather than on technical
procedural rules.
 In normal litigation, the parties cannot select the judge, and the judge and/or jury may often need
expert witnesses to explain extremely complex issues.
 The greater the expertise of the arbitrator, the less time that needs to be spent bringing him up to
speed.

A jury is not involved.

 Juries are unpredictable and often damage awards are based solely on whether they like the
parties or are upset at one party because of some piece of evidence such as a photo that inflames
the passion of the jury.
 Juries have awarded claimants damages that are well above what they would have received
through alternative dispute resolution; and they have also done the opposite.

Expenses are reduced.

 Attorneys and expert witnesses are very expensive.
 Litigating a case can easily run into the tens of thousands of dollars.
 Alternative dispute resolution offers the benefit of getting the issue resolved quicker than would
occur at trial – and that means less fees incurred by all parties.

ADR is speedy.
 Trials are lengthy, and in many states and counties it could take years to have a case heard by a
judge or jury. Appeals can then last months or years after that.

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  In a matter of hours, an arbitrator often can often hear a case that otherwise may take a week in
court to try with live witnesses.
 With arbitration, the evidence can be submitted by documents rather than by testimony presented
through witnesses.
 ADR can be scheduled by the parties and the panellist as soon as they are all able to meet
together.

The results can be kept confidential.

 The parties can agree that information disclosed during negotiations or arbitration hearings
cannot be used later even if litigation ensues.
 The final outcome can also be made private if the parties so stipulate and agree.
 On the other hand, most trials and related proceedings are open to the public and the press.
 Section 73 of the Arbitration and Conciliation Act, 1996 provides that as a general rule in
conciliation proceedings the record is to be kept confidential unless the same required due to
some underlying necessity.

Party participation.
 ADR permits more participation by the litigants.
 ADR allows the parties the opportunity to tell their side of the story and have more control over
the outcome than normal trials overseen by a judge.
 Many parties desire the opportunity to speak their piece and tell their side of the story in their
own words rather than just through counsel.

Fosters cooperation.
 ADR allows the parties to work together with the neutral arbitrator or mediator to resolve the
dispute and come to a mutually acceptable remedy.

Less stress.
 ADR is often less stressful than expensive and lengthy litigation. Most people have reported a
high degree of satisfaction with ADR.

Conclusion.
 Because of these advantages, many parties choose ADR (either mediation or arbitration) to
resolve disputes instead of filing or even proceeding with a lawsuit after it has been filed. It is
not uncommon after a lawsuit has been filed for the court to refer the dispute to a neutral before
the lawsuit becomes too costly.
 ADR has also been used to resolve disputes even after trial, while an appeal is pending.

Sample subject matters.

Some examples of disputes that can be settled by ADR include but are not limited to:
 Business disputes- contracts, partnerships, ownership
 Property / Land use disputes- property transfers, boundaries, easements
 Family disputes- divorce, property, custody, visitation, support issues
 Consumer / Collection disputes- repairs, services, warranties, debts, loans
 Employment disputes- employment contracts, terminations, non-compete

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 Landlord/tenant disputes- evictions, rent, repairs, security deposits
 Neighbourhood disputes / Relational disputes or other civil or personal conflicts
 Personal Injury disputes / Insurance disputes- accidents, coverage, liability issues.

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 DEMERITS OF ADR

IMPORTANT POINTS – DEMERITS OF ADR

 Not suitable for each and every dispute.
 Wastage of time and money in case the dispute is not resolved.
 Possibility of bias.
 Compromising of confidentiality.
 Limited judicial review.
 Informal, more opportunity of abuse of power.
 Lack of power to establish legal precedents.
 Unfamiliarity with the procedure and lack of awareness.

There is no guaranteed resolution.

 With the exception of arbitration, alternative dispute resolution processes do not always lead to a
resolution.
 That means it is possible that you could invest the time and money in trying to resolve the
dispute out-of-court and still end up having to proceed with litigation and trial before a judge or
jury.
 However, you will certainly better understand the other side’s position, i.e., know their entire
case and vice versa, which could have an adverse effect during the court trial/proceedings.

Arbitration decisions are final, subject to challenge u/s. 34.

 With very few exceptions, the decision of a neutral arbitrator cannot be appealed, with fraud
being an obvious exception.
 Additionally, some states will not enforce decisions of arbitrators that are patently unfair, a high
standard to meet.
 Another ground for setting aside an award is if the arbitrator’s decision exceeded the scope of the
arbitration clause or agreement.
 Some arbitration clauses are broad, others are narrowly limited to specific disputes. Decisions of
a court, on the other hand, usually can be appealed to an appellate court for a variety of legal
grounds and for numerous alleged procedural errors.

Limits on Arbitration Awards.

 Arbitrators can only resolve disputes that involve money.
 They cannot issue orders compelling one party to do something, or refrain from doing something
(also known as injunctions).
 For example, Arbitrators generally cannot change title to real property. Of course, this is subject
to the specific language of the arbitration clause.
 There are various disputes which are non-arbitral such as criminal cases.

Discovery limitations on documents and evidence

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  It is not as easy to compel a person to produce a document in ADR proceedings as is during the
Court proceedings.
 Some of the procedural safeguards designed to protect parties in court may not be present in
ADR, such as the liberal discovery rules used in U.S. courts, which make it relatively easy to
obtain evidence from the other party in a lawsuit.

Fees for the Arbitrator/Mediator/Conciliator

 The neutral mediator or arbitrator charges a fee for his or her services. Depending on the
arbitrator or mediator selected, the fees can be substantial (of course the parties typically agree to
divide the fees between themselves).
 Depending on the contract language and state law, a prevailing party can be awarded fees and
costs.
 A judge on the other hand, charges no fees for his services.

May have no choice, other than resorting to ADR

 Often the contract in dispute contains a broadly worded mandatory arbitration clause.
 Many lease agreements and employment contracts, for example, contain mandatory arbitration
provisions, as do operating agreements and other types of business contracts.
 Unless both parties waive arbitration, most states will compel arbitration at the request of any
party.

Non-binding nature of the final decision.

 Sometimes the court may order nonbinding or Judicial Arbitration.
 This means that if a party is not satisfied with the decision of the arbitrator, they can file a
request for trial with the court within a specified time period after the arbitration award.
 Depending on the process ordered, if that party does not receive a more favourable result at trial,
they may have to pay a penalty or fees to the other side.

Warning.
 The parties pursing ADR must be careful not to let a Statute of Limitation run while a dispute is
in any ADR process.
 Once the statute expires, judicial remedies may no longer be available.