Alternative Dispute Resolution

When faced with a dispute, Alternative Dispute Resolution (ADR) provides an alternative route to resolution without pursuing court proceedings. Where both parties agree to utilise ADR, it can be a particularly cost-effective route where the cost of a claim could be outweighed by the cost of litigation and can help to limit business and personal disruption associated with drawn out and stressful legal proceedings.

JLN are strong advocates of ADR where appropriate and can help you to find a resolution at any time during your dispute.

Why ADR?

• Litigation can be an expensive and unpredictably lengthy process. Where available, ADR can be a faster route to resolution than going to court, and is usually a more cost-effective approach.
• The UK legal system actively encourages businesses to utilise ADR in the pursuit of responsible, reasonable, fair and proportionate dispute resolution outside of court.
• The courts often require businesses to show they have considered other options in the pre-action protocols before resorting to litigation. Failure to engage in ADR could hinder any award by the court and lead to negative consequences when the Court makes a costs award in favour of one party.

Types of ADR:

There are five main types of ADR available:

Negotiation

• Through this process, both parties seek to find common ground on their issue taking the views, opinions and wishes of the other party into account and reach an out of court settlement between themselves.
• Most disputes settle as a result of negotiation, often with solicitors advising and representing either one or both of the parties.
• Negotiations are the least formal and most cost-effective option to litigation.

Mediation

• Mediation can be engaged in by the parties at any stage once a dispute has arisen.
• Parties come together with an independent, impartial mediator present to facilitate communication and assist them in reaching an agreement on the dispute. Solicitors may also be involved advising one or both of the parties at the mediation.
• It is not the place for the mediator to assist the parties in working out a solution directly, but they must guide the parties to negotiate in an appropriate and constructive manner. A key benefit of mediation is that it is not as formal as the arbitration or litigation process, rendering it less expensive for the parties.
• Following a successful mediation, a settlement agreement is drafted which explains the key agreements made between the parties.

Conciliation

• Conciliation is generally used for employment disputes, and is a mandatory step prior to filing an Employment tribunal claim.
• Similarly, to mediation, an independent conciliator facilitates discussion between the parties with the aim of reaching a resolution.

Arbitration

• Involves a tribunal process overseen by an independent Arbitrator and all parties will provide evidence that will be used by the arbitrator to resolve the dispute.
• There are no deadlines imposed by the court, and it is more flexible as a result. Generally, it is often much cheaper than litigation. Arbitration decisions are legally binding and can usually be enforced in a similar way to court judgments.

Adjudication

• Adjudication relates to construction disputes as it is a statutory right arising under ‘construction contracts’, as defined by section 104 of the Housing Grants, Construction and Regeneration Act 1996. Alternatively, although less commonly, parties may also agree to refer disputes to adjudication through contractual agreement.
• The process is much less formal than arbitration or litigation, and there are no strict rules of evidence (the parties only rely upon the documents they produce).
• The parties usually choose the rules of procedure based on the rules of the adjudicator nominating body, such as RICS and TESCA.