In my last blog post, we looked at some of the advantages of using alternative dispute resolution (ADR) instead of taking the case to the courts. We considered the ways this benefited both the parties and the court system, such as the lower cost, the speed, and the relief of pressure on the courts. However, in this blog, we will be thinking about the other side of this debate – the disadvantages of using ADR to resolve disputes.
We will start by briefly reminding ourselves of a few of the different methods of ADR that can be used. Keeping these in mind will make it easier to see the disadvantages of them in context. We will then move on to consider what the disadvantages of these are.
Methods of ADR
The first method we will look at is adjudication. This was actually created to resolve construction disputes under the Housing Grants, Construction and Regeneration Act 1996, so the procedure to be followed is set out in this. However, adjudication can still be used for other types of dispute, so keep it in mind.
Once a Notice of Adjudication has been served, the parties must appoint an adjudicator. This should be a neutral third party, who will examine the evidence, including any supporting documents from both parties, then come to a decision based on these facts. The adjudicator’s decision is legally binding, although they can be overruled by an arbitration decision or court ruling.
Another method is mediation, where both parties voluntarily meet with a mediator to try to reach an agreement. After the parties have presented their side of the dispute, the mediator will go back and forth, trying to find a solution. If one is reached, the parties can choose to sign a legally binding agreement.
There are also other methods, such as negotiation, early neutral evaluation and expert determination, which you can read more about in my blog post concerning the different methods of ADR. However, it is worth noting that arbitration is not a method of ADR. You can’t take legal action after receiving an arbitration ruling.
Disadvantages of ADR
No Legal Expertise
One of the main disadvantages of using ADR is that there is no legal expertise from the parties unless they bring a lawyer. However, lawyers are less common in ADR proceedings as they make the situation more formal, which is one of the things ADR aims to avoid. If neither party has legal expertise, yet is supposed to negotiate a solution themselves, this can lead to some odd and unjust results.
This is especially true of the more difficult areas of law – if there is a dispute which relies on a particular point in the law, how will ADR resolve this? This may partly depend on the type of ADR chosen and whether there is a third party with legal expertise. Of course, this also relies on the third party being allowed to make suggestions, as not all methods of ADR allow this. If there isn’t any legal expertise, the parties may end up going to court anyway.
Power Imbalance
The lack of legal expertise can lead to another problem – what if one party has legal expertise, but the other doesn’t? This is especially problematic when one party can afford to hire a lawyer to represent themselves, but the other party doesn’t have the resources for this. This then gives the richer party a distinct advantage over the other.
This is also true of other resources available to the parties, not just lawyers. Some parties will be able to afford extensive research into the issue that is being debated, while others will have more trouble and so not have the same background knowledge. In addition, it is harder for some parties to gather all of the necessary evidence, which can make it more difficult for them to defend their position.
No Precedents
Another problem with ADR is that, as there is no strict hierarchy or system, there are no precedents made or followed. This makes it very difficult to know how an issue will be decided before they are actually heard. It is possible that there will be multiple cases, with nearly identical facts, that have different outcomes.
Not Enforceable
Finally, not all methods of ADR are enforceable later. They can be; for example, a decision reached after negotiation could form the basis of a new contract, but this is far from certain. The parties have to voluntarily enter the contract, it is not a requirement. This lack of enforceability means that the parties may find themselves in the same situation further down the line.
Wrapping Up
I hope that you now feel you know more about some of the disadvantages of ADR methods for resolving a civil dispute. In my next blog post, we will be looking at the hierarchy of the criminal courts and the remedies available, so come back in two weeks for that!
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