MODULE 3

UNDERSTANDING THE PROS AND CONS OF ADR

Alternative Dispute Resolution (ADR) has been gaining momentum as

an alternative to litigation over the past decade. ADR can take on many forms,
including negotiation, mediation and arbitration. All ADR methods have pros
and cons that should be considered before making them a part of the legal
process.

INDEPENDENT NEGOTIATION

This is the least formal ADR tactic available and the most common.
Most dispute begin with negotiations, in an attempt by the parties to avoid ill-
will and court costs.

PROS CONS
Inexpensive Can be a stalling tactic
Faster than any other means of resolution No guarantee of a resolution
More private than court Power imbalances may go
unchecked
Flexible No guarantee of good faith
Risk free-parties can always escalate Lack of neutral 3rd party
reduces the chance of
agreement of complex multi-
party disputes
Potential for continued working relationship

MEDIATION

Mediation is sometimes required and is occasionally a mandatory pre-

litigation step in some jurisdictions. Mediation is an informal process wherein
the parties meet infront of one or more mediators also known as “neutrals”,
in an attempt to sort out the needs and desires of the parties and reach a
resolution. Mediation may be either binding, or non-binding. In binding
mediation, the recommendation of the mediator or agreement of the parties
is binding on all parties. In non-binding mediation if the parties do not reach a
resolution or do not agree with a mediator’s recommendation, they may
escalate the matter to the courts or to arbitration.

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PROS CONS
Confidential
Parties may choose a mediator with
substantive knowledge of the dispute
3rd party neutral can help overcome
impasses and alleviate emotional situations
If claim could be settled in
small claims court, mediation
may be prohibitively
expensive
Incompetent mediators may
hinder resolution
All parties’ rights may not be
adequately protected
Legal precedents not created

ARBITRATION

Arbitration is typically binding in nature, though not always. This is set

in contractual negotiations. However, given the expense of arbitration
proceedings, it is generally futile to agree to non-binding arbitration when
either party may decide to litigate anyway after going through the time and
expense of arbitration.

PROS CONS
Private Successful outcome may be
Faster than litigation dependent on quality of
mediator
Parties can design the process Unsatisfactory outcomes may
not be addressed by a judge

Sometimes less expensive than trial Lack of cooperation by a party

may extend time and
expense
Confidential process Lack of legal precedents in
matters that should be
addressed once and for all
More formal process than mediation
compels decorum
Parties can choose substantive expert(s)
to serve as arbitrators

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TAKEAWAYS
 For decades, there has been significant interest in finding ways to
resolve disputes through methods other than litigation. Some ADR techniques
that individuals and parties have turned to somewhat new., while others have
been used for many years. All methods, however, have a common objective;
the resolution of disputes in less time, at less cost and with less emotional
turmoil and hostility than typically results from litigation. Independent
negotiation, mediation and arbitration offer efficient and effective alternatives
to litigation. All three methods may significantly reduce the cost of achieving a
resolution of a dispute, and may be conducted at any time, at any location and
at the convenience of parties.

A BACKGROUND OF THE LEGAL SYSTEM IN THE PHILIPPINES

The Philippine Legal System is a blend of the Roman Civil law and the
Anglo-American Common law systems.

The civil law system operates in the areas of family relations, property,
succession, contracts and criminal law while statutes and principles of
common law origin are evident in such fields as constitutional law, procedure,
corporation law, negotiable instruments, taxation, insurance, labor relations,
and banking laws. Islamic personal law is recognized and is operative in some
parts of Mindanao with the establishment of Sharia’ah courts and the
Sharia’ah Bar.

The main sources of Philippine law are the Constitution, statutes,

treaties and conventions, and judicial decisions. The constitution is the
fundamental law of the land and as such, it is authority of the highest order
against which no law can prevail. Every official action to be valid must conform
to it. On the other hand, statutes are enactments passed by the Philippine
legislature. Statutes also include presidential decrees issued during the martial
law period, and executive orders issued by the President under the 1986
Provision “Freedom” Constitution.

Having the same force of authority as legislative enactments are

treaties entered into by the Philippines with other states. Philippine law is also
derived from case decisions because the Civil Code provides that “judicial
decisions applying or interpreting the law or the constitution shall form part of
the legal system of the Philippines”. Only decisions of the Supreme Court,
however, establish jurisprudence and are binding on all other courts.
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The judicial system of the Philippines consists of a hierarchy of courts
with the Supreme Court at the apex (Court of Appeals, Regional Trial Courts,
Metropolitan Trail Courts, Municipal Trial Courts). The congress has the power
to define, prescribe and apportion the jurisdiction of the various courts but
may not deprive the Supreme Court of its jurisdiction over certain cases
granted in the Constitution.

There is no trial by jury in the Philippines. The judge determines all

questions of law and fact of a case brought before him. The Rules of Court
govern the pleading, practice and procedure before the courts.

ACTIVITY 3

Name__________________________Yr and Sec__________Date__________

Compare the Pros and Cons of Arbitration and Mediation.

QUIZ 3

What can you say about the Dispute Resolution mechanisms used in the
Philippines? Are these mechanisms effective as tools of resolution?

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