ADR

Question 1

What is ADR (Alternative Dispute Resolution)?

Answer 1

Alternate, out of court methods to settling disputes

Question 2

What are the four forms of ADR?

Answer 2

• Negotiation
• Mediation
• Conciliation
• Arbitration

Question 3

What is Negotiation?

Answer 3

The process of trying to come to an agreement

Question 4

What are the advantages of negotiation? (Not needed in test)

Answer 4

• Can be conducted by the parties themselves - no need for lawyers (cheaper)
• Can be used at any point of the dispute (beginning to the start of the court hearing)
• CHEAPEST METHOD OF RESOLVING A DISPUTE
• Can include agreement about future business deals

Question 5

What are the disadvantages of Negotiation? (Not needed in test)

Answer 5

• Can be unsuccessful, meaning other ADR or a court hearing has to be used (waste of time and money)
• May not be suitable if antagonist feelings are present (parties cannot co-operate in finding a resolution)

Question 6

What is Mediation?

Answer 6

Using a neutral person/panel to help the parties come to a compromised solution

Question 7

Characteristics of Mediation:

Answer 7

• The neutral third party will work with both sides, offering advice on the merits of each side’s evidence
• May cost money if using a commercial mediation fund, but costs are still a lot lower than court cases
• Some mediation firms are free, where trained volunteers will help settle less serious disputes
• Is only useful if there is some hope of compromise
• A MIAM (Mediation Information and Assessment Meeting) is normally used in family cases before any court proceedings

Question 8

What is Conciliation?

Answer 8

The conciliator (3rd party) will help both parties understand their respective positions and suggest grounds for compromise and the possible basis for a settlement

Question 9

What are the advantages of Mediation and Conciliation? (Not needed in test)

Answer 9

• The parties are in control and can withdraw at any point
• A compromise cannot be reached without agreement from both sides
• The decision is not solely based on law - more likely to be based on commercial common sense and compromise
• Can include agreements for future business deals and helps continue business between parties
• Avoids the adversarial conflict of the court room

Question 10

What are the disadvantages of Mediation and Conciliation? (Characteristics needed in test)

Answer 10

• Main disadvantage is that there is no guarantee the matter will be resolved and court will be necessary after the failed attempt (additional costs and delay)
• Success of compromise relies solely on skill of 3rd party
• Amounts paid out are often lower than other mediated settlements and the courts

Question 11

What is Arbitration?

Answer 11

When all parties agree to submit their claims to private arbitration, where an impartial tribunal obtains a resolution to a dispute

Question 12

What is the process of Arbitration.

Answer 12

• Private arbitration rules set out in the Arbitration Act 1996
• Both parties voluntarily submit to go through the process
• Number of arbitrators appointed is agreed upon
• The date, time and place of the hearing is worked out between the parties and the arbitrator
• The arbitrator’s decision is final and binding

Question 13

What are the advantages of Arbitration? *

Answer 13

• Hearing time and place agreed upon by both parties (flexible)
• Matter is dealt with in private
• Dispute will be resolved quicker
• Usually much cheaper
• Award can be enforced by courts
• Parties agree on arbitrator, and decide whether the matter is best dealt with by a technical expert, lawyer or professional arbitrator

Question 14

What are the disadvantages of Arbitration? *

Answer 14

• Professional arbitrators may have expensive fees
• Rights of appeal are limited
• Delays for commercial and international arbitration are almost as long as court hearing delays
• An unexpected legal point may arise which cannot be dealt with by a non-lawyer arbitrator
• May be expensive if parties opt for a formal hearing, with lawyers and witnesses