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ALTERNATIVE DISPUTE RESOLUTION
CPR 1.4(2)(e): the court may further the overriding objective of dealing with cases justly by "encouraging the parties to use an ADR procedure if the court considers that appropriate and facilitating the use of such procedure".
ADR is a means of resolving disputes by using an independent third party, who may help the parties to reach their own solution but who cannot impose a solution. It is voluntary and without prejudice.
The parties choose the process, and either of them can withdraw at any time before a solution is agreed.
If either party does not like the proposed solution, he does not have to accept it.
How ADR differs from other forms of dispute resolution
Litigation is not voluntary (except that the
claimant chooses to issue the claim).
Once the case is started, usually neither party can withdraw without paying the opponent's
If the parties are unable to negotiate a settlement, the court will impose its own solution. The winner will enforce that solution.
Arbitration is voluntary in the sense that the parties voluntarily entered into an arbitration agreement.
However, when a relevant dispute arises, one party can force the other to arbitrate against his will because of the original contractual agreement to do so, provided it is enforceable.
The arbitrator will impose a solution which the winner can enforce.
The Independent Third Party
The independence of the third party is an essential feature of ADR, as is the fact that he cannot impose a solution.
As the parties know that he is independent, they are more likely to trust him and be open with him. They will not want to be seen as an obstacle towards settlement and are likely to be more accommodating. He may therefore be able to defuse the dispute and make settlement more likely.
A further advantage is that the independent third party not only will be trained to act as a neutral, but also should have any necessary industry knowledge required to understand the dispute. The third party can help the parties to settle their dispute in another way. A commercially-minded neutral may come up with ideas that the parties might not have thought of, and which solve the problem without either side losing face.
Disadvantages of ADR
Advantages of ADR
ADR procedures are confidential. Nothing said can be referred to in any It does not bind the parties to the procedure
no one can be forced to resolve a dispute by any form of ADR
later court proceedings unless all parties agree to waive confidentiality.
Quicker and significantly cheaper than both arbitration and litigation - if
if one party suggests ADR, the other parties do not have to agree; and
ADR works, however, there will be a significant reduction in the amount of even if the parties have started to resolve a dispute by ADR, most ADR
time the lawyers spend in preparing and presenting the case, which will agreements allow any party to withdraw at any stage before a solution save costs.
The awards are not so easily enforceable - no equivalent of s..66 AA 1996
Flexibility enabling ADR awards to be enforced as if they were court judgments
parties can choose one of several forms of ADR
Facts may not be fully disclosed - no equivalent of disclosure, so there is a
do not have to comply with any statutes or rules of court risk that the parties may resolve the dispute without knowing all the facts
ADR is not appropriate for all cases; e.g.
o no case law limiting what the parties or the neutral can do
where the client needs an injunction or security for costs
Ideal for cases where the parties to the dispute will have to continue to deal
where there is no dispute - i.e. simple debt collection matter with each other - non-confrontational method of solving their problem makes it much easier for them to continue their relationship, since the
where the client needs a ruling on a point of law solution is theirs and has not been imposed upon them.
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