Alternative Dispute Resolution Techniques Resolving Disputes without “Going to War”
The “see-you-in-court” approach is often the worst way to resolve legal disputes in terms of time and cost, but fortunately it is not the only way. Alternative dispute resolution (ADR) techniques are increasingly being used instead of costly, protracted litigation to resolve even the toughest of business disputes, including those arising in the construction industry. This piece briefly describes five common ADR methods and some of their advantages over traditional litigation.
• NEGOTIATION: Obviously, the most direct method for resolving disputes is for the parties to work out their own differences through skillful negotiation. All too often, however, parties and their lawyers put less effort into resolving disputes amicably than they do in negotiating agreements for the project in the first place. As contractors, you negotiate agreements on projects all the time; so why should you automatically throw up your hands and turn to the courts when problems arise?
Negotiation is a voluntary process by which parties attempt to reach a mutually satisfactory agreement through informal and unstructured discussions. Successful negotiators typically focus on problem solving and trying to satisfy both parties’ interests without determining who is right and who is wrong.
In the process of negotiation, the parties remain in control of the outcome; no result is imposed on the parties, and they are free to walk away from the process at any time. A neutral third-party is usually not present. Moreover, although participants often employ attorneys trained in problem-solving to represent their interests in negotiation, this is not essential. Negotiation is especially valuable in situations where future interaction between the parties is desirable because negotiation is less confrontational than litigation and helps restore, preserve or strengthen the parties’ business relationship.
• MEDIATION: Mediation is similar in many respects to negotiation. Both are generally private, voluntary, and informal. The focus in both is on problem-solving rather than on determining who is right and who is wrong, and the parties themselves decide the outcome.
In mediation, however, a neutral third party is chosen by agreement to help the parties resolve the dispute. The mediator listens to each side’s version of the problem in an informal setting and helps the parties come up with ideas for resolving the dispute. The mediator encourages each party to attempt to understand and evaluate the interests of the other party, although the mediator generally does not “judge” the strength of either side’s case. For the most part, the mediator has no authority to impose an outcome on the parties if they fail to reach agreement, and both sides are free to walk away from the process at any time.
The parties can agree to mediate at any stage of a dispute, even after a lawsuit has been filed. Contracting parties can also include “mediation clauses” in their contract documents requiring the parties to attempt mediation of any disputes before resorting to litigation. While several organizations exist which provide skilled mediators, the parties may also agree to name a particular individual in whom both parties have confidence and trust.
• ARBITRATION: In arbitration, a dispute is submitted to one or more impartial persons, usually experts in the construction field, who decide the outcome. The arbitrator’s decision is private and binding unless the parties have agreed to an advisory opinion. In binding arbitration, the arbitrator’s decision may be appealed to court, but an arbitrator’s decision can be reversed only in exceptional circumstances such as obvious bias by the arbitrator or fraud.
Although arbitration is more structured than negotiation or mediation, it is more flexible, and less costly, than litigation. Generally, the parties decide how formal the arbitration proceeding will be and what rules they will follow regarding procedures such as discovery, presentation of evidence, and the necessity of a detailed opinion supporting the arbitrator’s decision. Less discovery is conducted in preparing a case for arbitration than for trial.
• PRIVATE JUDGING: Private judging involves employing a retired judge to hear a dispute. As with arbitration, private judging is done by consent of the parties, and typically the parties agree that the private judge’s decision will be binding. Private judges are usually given most of the powers of a court, and the hearing resembles a typical court trial. The main advantage to private judging over the public courts is the shorter time it takes to get the matter brought to trial.
• SUMMARY JURY TRIAL: A summary jury trial is effective in a case in which parties differ substantially on how they think a jury will react to their cause. A summary jury trial consists of abbreviated discovery and a summary presentation. The case is heard by a real jury in a courtroom under the supervision of real a judge. The jury renders a verdict which, although non-binding, is used by the parties and the judge in efforts to settle the case.
Although traditional litigation is necessary in some cases, a large percentage of commercial disputes can, and should, be resolved through alternative dispute resolution methods. These ADR procedures are more cost- and time efficient than litigation, give the parties more control over the outcome, and enable the parties to restore, preserve or improve their business relationship for the future.
Feel free to contact me for legal advice via firstname.lastname@example.org, 0207932977, Bander Bin Shamal Lawyers & Legal Consultants