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Beginners guide to ADR
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This short note covers - the types of ADR and the advantages and disadvantages of ADR - this gives you the basics and foundation to ADR.
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ALTERNATIVE DISPUTE RESOLUTIONWhat is ADR?
ADR is a method of resolving disputes between parties without going to court – there can be many
benefits of using this system which are discovered below.
Arbitration:
Arbitration is where a 3rd party reaches a decision which is binding upon the parties in dispute.
May be quicker than litigation, less formal and occur in private, solutions reached may be
more practical than those a court has a power to order, decisions are binding on the parties.
But, certain remedies such as injunctions are not available. No jury and decision left in the
hands of a single arbitrator.
ADR:
Non-determinative ADR = 3rd party suggest a solution to the parties but not impose one.
Determinative ADR = 3rd party can impose decision.
Court cannot order than parties use ADR – Court of Appeal confirmed in Halsey v Milton
Keynes General NHS Trust. But, there may be cost consequences of unreasonably
refusing to consider or use ADR.
Types of ADR –
- Mediation and conciliation: 3rd party selected as mediator and discuss the case with each
party on a without prejudice basis.
- ‘Med-arb’: the parties agree to submit their dispute to mediation and if this does not
work, they will refer the matter to arbitration.
- ‘Mini-trial’ or ‘structured settlement procedure’: parties appoint a neutral who will sit as
chair of a tribunal composed of the chair and a senior representative of each of the
parties. They hear or read the cases and negotiate with each other with the help of an
independent arbitrator to reach a compromise.
- Expert appraisal: the parties can refer all or part of their dispute to an expert in the field
for their opinion. Opinion is not binding.
- Expert determination: they agree to accept the expert’s decision and if one fails to do so
they can sue for breach of contract. The decision, however, cannot be enforced as a
court order.
- Final offer arbitration: each party makes an offer on terms to settle, neither can afford to
make an unrealistic offer as the neutral will choose the opponent’s offer.
- Early neutral evaluation: parties instruct neutral to make preliminary assessment of the
facts at early stage in dispute, submit written case summaries and supporting
documents, the evaluator then makes a recommendation and try to negotiate a
settlement.
Advantages of ADR:
Overriding principle: CPR 1998 rule 1.4(2)(e) – the court may further the overriding objective
of dealing with cases justly by encouraging the parties to use ADR if the court considers that
appropriate and facilitating the use of such procedure.
Practice Statement (Alternative Dispute Resolution) (No 2) (1996) – Waller J said ADR:
- helps to save litigants the ever-mounting costs of bringing their actions to trial
- saves the delay of litigation
- enables them to achieve settlement of their disputes whilst preserving existing
relationships
- provides them with a wider range of settlement solutions than those offered by litigation
- is likely to make a substantial contribution to the more efficient use of judicial resources.
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