In my last blog post, we looked at some of the methods of alternative dispute resolution, or ADR. In this blog post, we will be considering this subject in a bit more detail, looking at some of the advantages of using ADR. We will then consider some of the disadvantages of ADR in my next blog post.
However, before we get too far into the advantages of ADR, we will quickly remind ourselves of some of the methods of ADR available and how they work. This will help you to understand the advantages of each one.
Methods of ADR
The first method of ADR we will be looking at is adjudication. This is compulsory in the construction industry and was introduced by the Housing Grants, Construction and Regeneration Act 1996. However, it is still available for other disputes where both parties have agreed to it or it is included in the initial contract.
An adjudicator is appointed to deal with the dispute, who will hear both sides before coming to a decision. Their decision is binding on the parties but can be overturned by a later arbitration or court ruling.
Another method of ADR is mediation. This is an entirely voluntary process and means that the parties try to resolve their dispute themselves by discussing it in the presence of a neutral third party (the mediator). There is no set procedure for mediation. Everything said is private and without prejudice, meaning that it cannot be used as evidence in a later court trial. If a decision is reached, the parties can choose to sign a legally binding agreement.
The final method of ADR we will be considering is negotiation. This means that the parties or their lawyers meet and discuss the issues presented and then try to reach an agreement themselves, without the aid of a third party. Again, anything said during negotiation is considered private.
There are a few other methods available, but these will give you the general idea of how ADR works. Arbitration is not considered to be a method of ADR as no further action can be taken in the courts once a decision is reached.
Advantages of ADR
Lower Cost
One benefit of ADR for the parties involved is the lower costs attached to it. Litigation is extremely expensive due to the legal fees involved. Of course, if the party wins the court case, there is a possibility that the other party will be required to pay their legal costs as part of the remedy. This is to make sure they are back in the position they would have been had the case never occurred. They shouldn’t be responsible for the costs of fighting a wrong the other party did or defending themselves against a false claim.
However, this does not deal with the problem that both parties will need to find the money upfront, without knowing whether they will win the case. This may not even really be possible for some, so ADR provides a more affordable method of dispute resolution. In addition, it is not always easy to tell which party will win the case. This makes hoping that the other party will be forced to pay your legal fees a big risk, so ADR is a safer option financially.
Faster
The next advantage of ADR that we will be considering is speed. It is not at all uncommon for civil cases to take years to actually get to court to be resolved. Until then, both parties are stuck with uncertainty, as well as the potential for big legal fees hanging over their heads. Even once the case gets to court, the possibility of appeal means that it can take even longer than first thought. On the other hand, ADR tends to have shorter waiting times and takes less time than court procedures.
ADR means that the dispute can be resolved as soon as possible. This is vital if the parties still need to work together after, as tension is bound to spring up if they are both waiting for the result of a dispute. If a solution is reached quickly in ADR, it is easier for the parties to continue a professional relationship. Also, if the parties are well-known, it may be better for them to have the dispute out of the headlines as soon as possible.
Informal
Finally, as ADR can be a fairly informal way of resolving issues, there is more chance of the parties being able to continue their working relationship. This means that neither of them has to lose business in the long term for the sake of one disagreement, as ADR tends to emphasise negotiation and compromise, rather than the direct conflict that happens in a court case.
Wrapping Up
I hope that you now feel more confident about discussing the advantages of ADR. In my next blog post, we will instead be considering the disadvantages of ADR, so come back in two weeks for that!
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