ALTERNATIVE DISPUTE RESOLUTION (ADR) MECHANISMS
ADR is simply a method of solving disputes that encompasses all forms of legally accepted processes other than litigation. Its main objective is to enable disputing parties solve their disputes efficiently. It includes the following mechanisms:
It is an informal and open-ended process that is controlled by the disputing parties. It does not involve neutrals or third parties but it allows the disputants to meet with each other in order to reach to a compromise.
Mediation begins with an open session with all the disputants present. It involves a neutral third party, a mediator who works closely with the disputants to explore their underlying interest and assist them identify the issues and alternative options available in order to reach to an agreement on their own.
A mediator can work with the disputing parties separately or together. However, the mediator can neither advise, give opinions on the disputed matter nor force the disputants to agree the outcome of the mediation. The mediator’s job is to clarify issues and promote discussions of risks, solutions and possible outcomes.
The process is confidential in nature and parties have control of the process and may terminate it at any time. The agreement is non-binding and parties may still decide to go ahead to litigate the matter. However, an agreement that was voluntarily achieved may become binding when the parties have concluded a settlement agreement. Mediation is suitable where disputants are willing to preserve their relation and may not work where one of the parties has an added advantage over the other.
Arbitration is headed by an arbitral panel that deliberates on the issues. The disputing parties present their evidence to an independent third party, an arbitrator who makes a determination known as an arbitral award. The private and confidential nature of arbitration allows the parties to be in control of the flow of information.
The determination may either be binding or non-binding. In binding arbitration, the parties cannot appeal the decision even though it was not supported by evidence or law. It is important to note that binding arbitrations are not absolute as there are several exemptions to the general rule. On the other hand, non-binding arbitration, parties may appeal or request a trial, but they risk being penalised if they do not receive a favourable term in trial.
Arbitration is most suitable where the subject matter is complex and parties want an expertise to decide the outcome of the dispute.
The downside of arbitration is that it only works if the arbitrator is committed to making a fair and an unbiased decision. An arbitrator is not bound by previous decisions of other arbitrators and thus, he is not bound to follow previous determinations, at least in most cases.
This mechanism combines the benefits of both arbitration and mediation. The disputing parties commence with mediation and if no agreement is reached, they proceed to arbitration.
- EARLY NEUTRAL EVALUATION (ENE)
ENE is conducted by an appointed evaluator to whom the parties provide insights about their case. After examining the facts, the evaluator educates the disputing parties about their odds and strengths in winning and settlement options.
The mechanism is suitable where a case has just been filed and the dispute at hand is technical in nature and requires special expertise to resolve. It is however not binding but it helps parties reassess their positions.
It involves an independent party, a conciliator who helps the disputing parties to identify the issues, develop alternatives and reach an agreement. A conciliator gives advise and may have professional expertise on the subject matter. However, the conciliator does not make a judgement or decision about the dispute and does not decide who is right or wrong. Conciliation may be voluntary, court ordered or contract based.
The adjudication process is governed by the formal rules of evidence and procedure. The process is presided over by a judge, a magistrate or other legally appointed or elected official. The judge hears the dispute and makes a decision in accordance with the law of the land.
Generally, the adjudication process is a 28-day procedure and usually starts when a party serves a notice. It is noteworthy that an adjudicator has no power to award costs unless the disputing parties have otherwise agreed.
The main objective of adjudication proceedings is geared towards the protection of cash flow in businesses. It prevents a party from withholding payments for a significant period. However, it does not dispose a matter fully and an adjudicator’s decision is of a temporarily binding nature as it is binding unless and until overturned in litigation or arbitration.
- MINI TRIAL
It enables disputants to test their case. Often occurs after the commencement of formal litigation and provides an avenue for settlement discussions. The Attorneys provide their version of their case and the information is represented to a panel chosen by the disputing parties. The panel representative then decides a mini trial outcome.
- SUMMARY JURY TRIAL
This is a mock trial with a neutral jury that gives a verdict. It is court ordered and after the verdict is given, the Court requires the parties to attempt settling the dispute before litigating.