An Introduction to Alternative Dispute Resolution
Disputes can be disruptive to any business, taking up valuable time and resources. Depending on the nature of the dispute, reputational damage could also be caused. It is therefore in the interests of business owners to tackle any dispute swiftly.
The first step is to try and resolve the dispute directly and amicably between the parties involved. However, not all disagreements can be resolved in this way and a more formal approach may be needed.
Alternative dispute resolution (ADR) is the collective name given to the methods of dealing with disputes without going to court. ADR is usually less costly and less confrontational than attending court.
There are generally three methods of ADR:
Mediation is the most common form of ADR and involves both parties working with a mediator to try to reach a suitable agreement. A set date and time is agreed for the mediation and the aim is to reach a resolution that both sides can accept.
A mediation is only successful if both sides agree. However, there is no guarantee that an agreement will be reached and a further method of ADR, or potentially litigation, could be required.
Arbitration is a process in which the parties involved agree to appoint an independent arbitrator to make a decision to settle a dispute. Like a court process, arbitration involves both sides presenting their case in front of an arbitrator. The arbitrator, who is jointly appointed by both parties, will listen to the evidence and reach a decision based on the discussions that take place. The decision that is made in arbitration is legally binding and can only be appealed on very limited grounds.
Collaborative Law involves one, or a series of, meetings between the parties and their solicitors. Both sides are required to sign a contract confirming their commitment to resolving the disagreement.
It’s important to realise that not all methods of ADR are legally binding. Mediation is not legally binding, unless a follow up legal document is then put in place. A decision made via arbitration is legally binding and can be enforced in the same way as a court judgement.
There are pros and cons to the different methods of resolving disputes and the one that is most suitable will depend on several factors, including whether you need the matter to remain quiet, costs and the amount of time you are willing to wait until reaching a resolution.
It’s important to know the distinction between different types of ADR before going down any one route. A Dispute Resolution Solicitor will be able to advise you depending on the circumstances involved, helping to develop a legal strategy to resolve the issue in the manner that is in your best business interests.
For more information on any of the methods of Alternative Dispute Resolution, or if you need legal advice in relation to resolving a dispute by way of litigation proceedings, please get in touch.
Our dispute resolution team can be contacted on 01457 761 320.