EXPLAIN THE ADVANTAGES AND DISADVANTAGES OF ALTERNATIVE DISPUTE

RESOLUTION’

Introduction

Other than court system there are other ways in which disputes can be solved. Disputes
often happen every now and then so it is very important that it should be handled carefully.
Judgment is very important in this world and proper judgment is very effective. One
judgment can change the whole situation around. Similarly judgment can change the life of a
person completely. It can take away someone’s respect and then again can give a person the
deserved respect. The word “dispute” means “disagreement” and the word “resolution”
means “the action of solving something.” Alternative dispute resolution is a form of
agreement. Alternative dispute resolution consists of a variety of ways to dispute resolution.
In many of these approaches there is a neutral individual who assists disputing parties in
resolving their disagreements. ADR increases the parties’ opportunities to resolve disputes
prior to or during the use of formal administrative procedures and litigation. It is not
intended to replace the traditional approaches and it can provide a long term solutions to
employee-employer conflicts through stakeholder’s participation and buy-in. It is at times
very helpful when it comes to making judgment. At times it is very helpful then again it does
have some flaw backs

Definition of ADR

Alternative Dispute Resolution includes alternative methods of helping people resolve legal
problems before going to court. There is an involvement in of an independent third person,
called a “neutral” who tries to help resolve or narrow the areas of conflict in ADR. Alternate
Dispute Resolution means the wide variety of methods by which conflicts and disputes are
resolved other than through litigation.
Brown and Marriott - Define ADR as a range of procedures that serve as alternatives to
litigation through the courts for the resolution of disputes, generally involving the
intercession and assistance of a neutral and impartial third party.

Julia Hornle – ADR refers to dispute resolution other than litigation in the courts, including
other adjudicative techniques such as arbitration.

Karl Mackie- ADR is neither litigation nor arbitration both of which are processed where the
judge or arbitrator alone decides the issues in disputes. ADR is structured where the parties
to dispute themselves negotiate their own settlement with the help of independent
intermediary.

Alternative Dispute Resolution refers to any means of settling disputes outside of the
courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation,
mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time
delays continue to plague litigants, more states have begun experimenting with ADR
programs. Some of these programs are voluntary; others are mandatory.

Two Conflicting view regarding Arbitration and ADR

In wider sense ADR includes arbitration because it constitutes an alternative to litigation. In

narrow sense ADR excludes arbitration because like litigation, arbitration also an
adjudicatory process with all the formalities of the functioning of the court and
contemplates an imposed decision.

Types of ADR:

There are four forms of ADR:

  Mediation
 Arbitration
 Negotiation
 Conciliation

Mediation

The most popular form of ADR is mediation. Mediation is a process of dispute resolution
focuses on effective communication and negotiation skills. The mediator role is to help the
parties in communicating and negotiating more effectively, thereby enhancing their ability
to reach a decision. It is not the mediator’s role to adjudicate the issues in dispute and
indeed the mediator has no right to do so. Mediation is not a process to force compromise,
although compromise is an element of the process. Each party’s limitations are respected
and a party is only expected to make a change in its approach to the problem if it becomes
convinced that it is reasonable to do so. Today mediation is the most fast growing form of
ADR. It is being used in almost every conceivable type of dispute resolution and comes in
different forms. The process has also been effectively adapted for multiple party dispute
resolution with tremendous success. On average the success rates of mediation processes
range from 80% to 85%. In an attempt to capitalize on the success rates, legislation is slowly
being amended to include provisions for mediation of disputes.

The advantages of mediation are many. Some of the benefits mediation offers include:

 Effective Process: Mediation generally enjoys an 80%-85% success rate.

 Better Results: The resolution is created by the parties.
 Speed: Mediation is focused in resolving the problem quickly.
 Cost: Mediation is not expensive.

Arbitration
Arbitration is a process for the resolution of disputes on a private basis through the
appointment of an arbitrator, an independent, neutral third person who hears and considers
the qualities of the dispute and renders a final and binding decision called an award. The
process is similar to the litigation process as it involves adjudication, however, the parties
select their arbitrator and the manner in which the arbitration will proceed. For example, if
the dispute is fairly straightforward and does not involve any factual questions, the parties
may agree to waive a formal hearing and provide the arbitrator with written submissions
and documentation only, called a documents only arbitration, whereas in other cases the
parties may wish a full hearing. Therefore, the parties create their own adjudicatory forum
which is tailor made to the particular needs of the parties and the nature of the dispute.

The advantages of arbitration over court adjudication can include the following:

 Expertise of the Decision-Maker: The parties can choose an arbitrator who has
expert knowledge of the law, business or trade in which the dispute has arisen.
 Low Cost: Arbitration is not expensive if the process is kept simple.
 Speed: Arbitration can be arranged quickly and does not take time as long as
litigation.

Negotiation

The simplest form of Alternative Dispute resolution. Where both parties have a dispute they
can negotiate a solution themselves. There is no third party of middle man who facilitates
the resolution process or imposes a resolution.

Conciliation

This is very much similar to mediation where a neutral third party helps the parties resolve
their dispute. The conciliator plays a more active role in the process. Conciliation is not
legally binding on the parties.
Advantages to Arbitration:

1. 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.).

2. 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.

3. Neutrality– ADR is neutral to the law, language and institutional culture of the parties,
thereby avoiding any home court advantage that one of the parties may enjoy in court-
based litigation.

4. 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.

5. 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. 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 panelist as soon as they are all able to meet together.

6. Confidentiality- ADR proceedings are private. Thereby, the parties can agree to keep the
actions confidential. This allows them to focus on the merits of the dispute without concern
about its public impact. 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.

7. 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.

8. 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.

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

10. Finality of Awards- Unlike court decisions, which can generally be contested through one
or more rounds of litigation, arbitral awards are not normally subject to appeal

Disadvantages of ADR

Some disadvantages of alternative dispute resolution are:

 It can be used as a stalling tactic.
 Parties are not compelled to continue negotiations or mediation.
 Does not produce legal precedents.
 Exclusion of pertinent parties weakens final agreement.
 Parties may have limited bargaining power. Parties do not have much of a say.
 Little or no check on power imbalances between parties.
 May not protect parties’ legal rights. The rights of the parties may not be protected
by alternative dispute resolution.
 Your case might not be a good fit– Alternative dispute resolutions resolve only issues
of money or civil disputes. Alternative dispute resolution proceedings will not result
in injunctive orders. They cannot result in an order requiring one of the parties to do
or cease doing a particular affirmative act.
 There are limits to the discovery process– You should also be aware that you are
generally preceding without the protections offered parties in litigation, such as
those rules governing discovery. Courts generally allow a great deal of latitude in the
discovery process, which you will not have in an alternative dispute resolution.
 There is no guaranteed resolution. With the exception of arbitration, alternative
dispute resolution processes do not always lead to a resolution.
 Arbitration decisions are final. With few exceptions, the decision of a neutral
arbitrator cannot be appealed. Decisions of a court, on the other hand, usually can be
appealed to a higher court.
 Participation could be perceived as weakness. While the option of making the
proceeding confidential addresses some of this concern, some parties still want to go
to court “just on principle.”
 The case might not be a good fit-Alternative dispute resolutions generally resolve
only issues of money or civil disputes.
 There are limits to the discovery process-One should also be aware that he is
generally proceeding without the protections offered parties in litigation, such as
those rules governing discovery.
 No Appeals: There is a small scope of appeal in the arbitration award. The very fact that
there is less scope of appeal in awards is one of the most glaring disadvantages of
arbitration. whenever there is a problem with the award, there would be no scope of
appeal or correction

Conclusion

Through this topic I got to learn a new term called alternative dispute resolution (ADR). I
have tried to provide as much details as possible regarding my topic. I found out what
alternative dispute resolution means, how many types of ADR are there, what are the
advantages and disadvantages of ADR. I have also provided some examples and tried to
relate Alternative Dispute Resolution with respect to Bangladesh. Litigation should be the
last resort and utilized only if the ADR procedures fail. It is essential, however, that all of the
parties involved in the claim or dispute approach ADR with an open mind and a willingness
to compromise if it is to have any chance of success. Mediation is mostly used. Arbitration is
very useful when it comes to handling family matters.

Arbitration has the following advantages over litigation:-

1. Arbitration promises PRIVACY. In a civil court, the proceedings are held in public,
which embarrasses the parties, especially during cross - examination.
2. Arbitration provides liberty to choose an arbitrator, who can be a specialist in the
subject matter of the dispute. The arbitrators may be experts and can resolve the
dispute fairly and expeditiously as they are well versed with the usages and practices
prevailing in the trade or industry.
3. The venue of arbitration can be a place convenient to both the parties. It need not be
a formal platform. A simple office cabin is enough. Likewise the parties can choose a
language of their choice.
4. Even the rules governing arbitration proceedings can be defined mutually by both
the parties. For example, the parties may decide that there should not be any oral
hearing.
5. A court case is a costly affair. The claimant has to pay for the advocates, court fees,
process fees and other incidental expenses. In arbitration, the expenses are lesser
and many times the parties themselves argue their cases. The arbitration involves
few procedural steps and no court fees.
6. Arbitration is faster and can be expedited. The court has to follow its own system and
takes abnormally longer time to dispense off the cases. It is a known fact that
millions of unresolved cases are pending before the courts.
7. A judicial settlement is a complicated procedure. A court has to follow the procedure
laid down in the Code of Civil Procedure, 1908 and the Rules of the Indian Evidence
Act. In arbitration, the procedure is simple and informal. An arbitrator has to follow
the principles of natural justice.
8. Section 34 of the Act provides very limited grounds upon which a court may set aside
an award. The Act has also given the status of a decree for the award by arbitrators.
The award of the arbitrators is final and generally no appeal lies from the award.
While in a regular civil suit there may an appeal and appeal against Appeal.
9. In arbitration, the dispute can be resolved without inflicting stress and emotional
burdens on the parties, which is a common feature in court proceeding
10. In a large number of cases, ‘Arbitration’ facilitates the maintenance of continued
relationship between the parties even after the settlement.