ADR HAS DEVELOPED AS A RESPONSE TO AN OFTEN DISAPPOINTING SYSTEM INVOLVING LITIGATION, LAWYERS, COURTS ETC.
It is founded on the principle that “I won’t sue you and you won’t sue me – we’ll settle this in a way that we choose to”
In the first instance, Alternate Dispute Resolution is an agreement to settle differences quicker and cheaper. It seeks to make space for parties to retain control of outcomes, rather than giving up that power to a third party.
Interestingly, ADR is also referred to as “Appropriate Dispute Resolution”.
ADR starts with good faith negotiation. Negotiation between disputants is often tough for even the most seasoned negotiators. This is because of the understandable hesitancy to show ‘trump cards’, underlying interests, or weaknesses – which may well impair a party’s case in possible future litigation or arbitration. The problem is that those underlying interests somehow need to be on the table for viewpoints to be flexible, and to produce creative ideas for agreement – together.
So, if negotiation fails, then a qualified neutral – a Mediator – is appointed to explore privately, separately, and confidentially, each side’s advantages, plusses, flaws, and difficulties; without revealing anything to the other side.
Each party can ‘lay their cards on the table’ without risk, so that together with the mediator as a thought partner, exploration can begin. It is that openness that allows the mediator to help identify the things that can be traded, used to promote ideas, suggest what-ifs, and play devil’s advocate; while methodically chipping away to settlement [which has a success rate of 75% plus]
If mediation fails, then the parties go to final and binding arbitration
Arbitration is like a court case. However, it is designed to be fast, inexpensive, and one that disallows tactics that delay, frustrate or are simply mischievous.
How efficient arbitration is, is directly linked to the terms of the arbitration agreement. Most of us want a simple, fair, and efficient process – and that has to be stipulated in a very clear document drafted by a specialist in the field. A poorly drafted arbitration clause may result in troubles, costs, delays, and frustrations that are worse than litigation.
Summarised, ADR is a three step process:
- NEGOTIATION – non-binding, voluntary, confidential, outcomes controlled by the parties.
- MEDIATION – non-binding, voluntary, confidential, outcomes controlled by the parties.
- ARBITRATION – binding and final with outcomes controlled by a third party.
Discourage litigation. Persuade your neighbours to compromise whenever you can
~ Abraham Lincoln