Alternative methods of dispute resolution (ADR)

Introduction (5)
1. Court hearings are not always the best way to resolve a dispute
2. Their disadvantages mean that, for some types of problem, alternative
mechanisms may be more suitable
3. Following Lord Woolf’s reform of the civil justice system, these
alternative mechanisms should play a more important role in solving all
types of civil disputes
4. Civil procedure Rule 1.4 requires the court to encourage parties to use
ADR
5. If a party fails to use ADR where the court thinks this would have been
appropriate then it can be penalised through a costs order

Key Case

Halsey v Milton Keynes General NHS Trust

 The Court of Appeal held that courts do not have the power to force parties to
try ADR
 As this might amount to a breach of a person’s right to a fair trial under Art.6
of the European Convention on Human Rights

Problems with court hearings (5)

The adversarial process (3)

1. Adversarial procedure combined with the often aggressive
atmosphere of court proceedings divides the parties, making them end
up enemies even where they did not start out that way
2. This can be a disadvantage making them end up enemies even where
they did not start out that way
3. This can be a disadvantage where there is some reason for the parties
to sustain a relationship after the problem:
o Child custody cases
o In business, there may be advantages in resolving a
dispute in way which does no make enemies of the
parties

Technical Cases (2)

1. Some types of disputes rest on detailed technical points (rather than on
points of the law):
 Details of a medical problem
 The way in which a machine should be made
2. The significance of such technical details may not be readily
understandable by an ordinary judge
o Where detailed technical evidence is at issue, ADR can employ
experts in a particular field to take the place of a judge
 Inflexible (3)
1. In court hearings the rules of procedure lay a down a fixed
framework for the way in which problems are addressed
2. This may be inappropriate in areas which are of largely private
concern to the parties involved
3. Alternative methods can allow the parties themselves to take more
control of the process

Imposed solutions (2)

1. Court hearings impose a solution on the parties which, since it
does not involve their consent, may need to be enforced
2. If the parties are able to negotiate a settlement between them, to
which they both agree, this should be less of a problem

Publicity (2)
1. The majority of court hearings are public
2. Undesirable in some business disputes, where one or both of the
parties may prefer not to make public the details of their financial
situation or business practices because of competition

Alternative dispute resolution mechanisms (5)

1. Where for one or more the reasons explained above, court action is
not the best way of solving a dispute
2. Three main forms of ADR can be identified: arbitration, mediation
and conciliation:

Key Definitions

1. Arbitration: is a procedure whereby both sides to a dispute agree to let a

third party, the arbitrator, decide. The arbitrator may be a lawyer, or may
be an expert in the field of the dispute. He or she will make a decision
according to the law and the decision is legally binding.
2. Mediation: involves the appointment of a mediator to help the parties to a
dispute reach an agreement which each considers acceptable. Mediation
can be ‘evaluative’ where the mediator gives an assessment of the legal
strength of the case, or ‘facilitative’ where the mediator helps the parties
to find a settlement that is in all the parties best interests. When mediation
is successful and an agreement is reaching, it is written down and forms a
legally binding contract unless the parties state otherwise
3. Conciliation: is similar to mediation but the conciliator takes a more
interventionist role than the mediator in bringing the two parties together
and in suggesting possible solutions to help achieve an agreed settlement.
The term conciliation is gradually falling into disuse and the process is
regarded as a form of mediation
 3. One of the simplest forms of ADR is, of course, informal negotiation
between the parties themselves, with or without of lawyers – the
high number of civil cases settled out include
4. Formal schemes include:
I. The Advisory, Conciliation and Arbitration Service (ACAS),
mediates in many industrial disputes
II. Association of British Travel Agents (ABTA)
III. Chartered Institute of Arbitrators, for business disputes
5. As a part of the governments commitment to promote alternative
dispute resolution, Government legal disputes should be settled by
mediation or arbitration whenever possible, Government
departments should only go to court as a last resort

Pressure to use ADR (4)

1. Following the Woolf reforms of the civil justice system, the Civil
Procedure rules positively encourage the use of ADR
2. The CoA is now prepared to punish parties who refuse to use ADR by
depriving them of costs, even if they are successful in the action: Dunnett
v Railtrack plc (2002)
3. A party may turn down an opponent’s offer to mediate with impunity if it
can satisfy the court that it has compelling reasons for doing so
4. Thus, in Hurst v Leeming, the court held that when mediation can have
no real prospect of success a party, may with impunity, refuse to proceed
mediation

Advantages of ADR (6)

Cost (4)
1. In 1998, Professor Hazel Glenn carried out research into mediation
scheme at Central London County Court
2. The scheme’s objective was to offer virtually cost-free, court annexed
mediation to disputing parties at an early state in litigation
3. Professor Glenn’s research did not find clear evidence that mediation
saved costs
4. The overall cost of cases which were settled through mediation was
significantly less than those which were litigated; but where mediation
was used and the parties failed to reach an agreement, and then went on
to litigate, it was possible costs to be increased

Accessibility (2)
1. Alternative methods tend to be more informal than court procedures,
without complicated rules of evidence
2. The process can therefore be less intimidating and less stressful than
court proceedings
 Speed (3)
1. The delays in the civil court system are well known and add considerably
to the overall cost, and adversely affect business
2. The research carried out by Professor Genn (1998) found that mediation
was able to promote and speed up settlement.
3. The majority (62 per cent) of mediate cases settled at the mediation
appointment

Expertise (1)
1. Those who run alternative dispute resolution schemes often have
specialist knowledge of the relevant areas, which can promote a fairer as
well as a quicker settlement

Conciliation of the parties (1)

1. Most alternative methods of dispute resolution aim to avoid irrevocably
diving the parties, so enabling business or family relationships to be
maintained

Customer satisfaction (1)

1. The research by Hazel Genn (2002) found that ADR generally results in a
high level of customer satisfaction

Problems with ADR (5)

Imbalances of power (4)

1. Benefits of voluntarily negotiating an agreement may be undermined
where there is a serious imbalance of power between the parties – in
effect, on party is acting less voluntarily than the other
2. Hazel Genn has also pointed out that the diversion of a case into
alternative dispute resolution often amounts to removing the case from
the state sector into the private sector
3. The priority of the private sector is normally profit not justice
4. Essentially the ADR profession is more interested in the profits of a large
commercial dispute settlement than to red society of conflict

Lack of legal expertise (1)

1. Where a dispute hinges on difficult points of law, an arbitrator may
not have the required legal expertise to judge although a legal expert
can be appointed to advise an arbitrator if necessary

No system of Precedent (2)

1. There is no doctrine of precedent, and each case is judged on its
merits, providing no real guidelines for future cases
2. While arbitrators have a duty to apply the law contained in court
judgements, the decision of arbitrators themselves do not act as
precedents.
 Enforcement (2)
1. Decisions not made by courts may be difficult to enforce
2. While an arbitration can be enforced just like a judgement, to enforce
a mediation settlement a party may need to go to court to obtain a
judgement, which can then be enforced

Low take-up rate (8)

1. There is a relatively low take-up rate for ADR and the numbers have not
increased as much as expected following the introduction of the Woolf
reforms
2. Research carried out for the government, Further Findings: A Continuing
Evaluation of the Civil Justice Reforms (2002) found that there has been a
levelling off in the number of cases in which alternative dispute resolution
is used
3. Hazel Genn research found that outside commercial practice, ‘the
profession remains very cautious about the use of ADR
4. For the commercial court ADR scheme, the most common reasons given
for refusal to mediate were:
I. A judgement was required for policy reasons;
II. The appeal turned on a point of law
5. The most common reasons given for not trying ADR following an ADR
order in the court of appeal were
I. the case was no appropriate for ADR;
II. the parties did not want to try ADR
III. there was no faith in ADR process in general
6. In addition Professor Hazel Genn has suggested that following the Woolf
reforms the increased number of pre-trial settlements might mean fewer
people need ADR
7. Research concluded that an individualised approach to the direction of
cases towards ADR is likely to be more effective than general invitations
at an early stage of the litigation prices
8. The early stages of proceedings may not be the best time, and should not
be the only opportunity to consider ADR; timing is crucial.

The future of ADR (8)

1. The proportion of people with legal problems who choose to use ADR,
has remained very low, even where there are convenient and free
schemes available
2. Professor Genn’s research (1998) found that only 5 per cent of cases did
the parties agree to try mediation, despite vigorous attempts to stimulate
demand
3. Litigants were also hostile to the idea of compromise, particularly in the
early stages of litigation
4. It is likely that in the future ADR will play an increasingly important role
in the resolution of disputes
5. Following Lord Woolf’s reforms of the civil justice system, the new rules
of procedure in the civil courts impose on the judges a duty to encourage
parties in appropriate cases to use ADR to facilitate its use
6. The Ministry of Justice issued a consultation paper, Solving Disputes in
the County Courts: Creating a Simpler, Quicker and More Proportionate
system
7. It is looking whether small claims should be referred automatically to
mediation, rather than the parties simply being invited to mediate
8. With cases up to a value of 100,000 pounds on the fast track and the
multi-track it is considering introducing compulsory mediation
information or assessment sessions before a case proceeds to court.