Alternative dispute resolution consists of several methods of settling disputes in lieu of litigation. In everyday discourse however, the term 'ADR' is commonly used as a catch all phrase, implying a similarity of process and conclusion in all different forms. At Phoenix, we realize that the appropriate method of ADR may differ according to the nature of the dispute, and are committed to helping our clients make the correct choice.
Arbitration is a process whereby the decision making role traditionally occupied by a judge is taken up by an arbitrator. Similarly, the rules of court are replaced by the rules of arbitration. The common practice is for both parties to select an arbitrator each, who would then select a third arbitrator. Parties may alternatively opt for a single arbitrator.
Once arbitrators have been selected, sufficient time may be expended whilst counsels for both parties engage in the compilation and exchange of evidence, the drafting of briefs and case preparation. However, arbitration remains at most times a far quicker method of dispute resolution than litigation. Arbitration proceedings themselves resemble a mini-trial. Counsels make submissions similar to an actual trial, which bears little personal involvement on behalf of the parties. In conclusion, the arbitrators render a majority ruling that is binding upon parties.
Whilst mediation leads to agreed settlements as well out of the box solutions, often, more complex and technically sophisticated matters require the adjudication of an expert. Arbitration therefore allows parties to choose experts to analyze the facts and decide the case, effectively providing the same credibility and binding authority as a court of law, albeit with reduced costs and quicker resolution. Essentially, what a mediation settlements may lack in more complex cases is the stamp of approval from an expert in the same way as an arbitration. This allows to parties to get a clear-cut idea of how a court may perceive a particular issue and therefore discourage them from ignoring the terms of the order.
Mediation provides a more streamlined method for dispute resolution. Once the decision to employ mediation is made, parties can essentially begin the process at the next convenient timing. Unlike arbitration, mediation proceedings do not involve evidential protocols or counsel submissions, since they tend to focus on parties engaging with each other on a direct level. Since even the most complex mediations may be resolved within one or two days, not only are costs reduced but so is the time spent away from your business.
Furthermore, a mediation is intrinsically geared towards reaching an amicable settlement between parties. The third party mediator is merely there to facilitate the discussion and does not assume the role of decision maker, which is retained by both parties, subject to an agreement. Participants are allowed to engage directly with each other, with or without the presence of counsels, and indulge in a frank and candid discussion on the dispute. This personalized nature of engagement whereby parties can put their grievances to each other and be the judges in their own dispute means that long term business relationships need not be severed on account of minor, or even major disputes. Settlements that consist of unusual remedies, such as an apology or an explanation are not uncommon and further allow parties to continue working together in the future.
The fact that any mediated settlement is subject to agreement by both parties may be a cause to argue that parties are more likely to adhere to the terms of settlement. Parties only agree to what they deem is fair and reasonable, therefore the need for enforcement proceedings is reduced significantly. This adds to the overall speed of process whereby not only is the dispute itself expeditiously resolved, but the resolution is swiftly followed by performance. As a means of safeguarding the interests of both parties however, mediated settlements are recorded in writing. Therefore, in the rare circumstance in which the need for enforcement actually arises, the settlement can usually be enforced as a contract.
Mediation is also a significantly cheaper alternative to litigation and arbitration. While the cost of litigation far outweighs any other form of dispute resolution, arbitration itself can be fairly expensive. As arbitration protocols and rules of evidence require the full involvement of legal representatives in the collection and presentation of evidence, the legal costs can soar exponentially depending on the nature of the dispute. As in litigation, both parties in an arbitration will have incurred significant costs before a single submission is made. Mediation on the other hand may even be conducted without the involvement of legal counsel. Even where legal counsel is present, he or she is merely required to assist parties in the course of the mediation rather than collect evidence or make representations to a judge or an arbitrator. The limited capacity in which he or she contributes to the process ensures that costs remain reasonable. Moreover, mediation requires little spending on behalf of either party in the pre-mediation phase of the procedure.
Eventually, both arbitration and mediation provide effective, cost-efficient and swift alternatives to litigation. Arbitration may be more suited to cases with complex factual issues as well as technical convolutions. Often, parties may want an expert to decide their case and give a binding judgment, but simply avoid a long-winded, expensive litigation process. On the other hand, mediation suits cases whereby parties are willing to come together and negotiate, expending even less time and money than in an arbitration.
At Phoenix, our experts help guide clients towards the appropriate method of Alternative Dispute Resolution for them. For guidance, please get in touch with us at firstname.lastname@example.org