This method is relatively cheap, although costs do increase when solicitors are involved.
Mediation;
A neutral 3rd party acts as a ‘facilitator’ and helps the parties reach a compromise. The mediator will explore the case and try to find common ground between the parties. He will meet each part, consult with them and carry offers too and fro between them. He will not usually suggest a solution although he may divulge his opinion on the merits of a case if prompted to by either party.
A formal settlement conference; is a formal procedure consisting of a mini-trial where parties will present their case to a panel composed of a neutral 3rd party, flanked by executive representatives from both parties. After the case has been presented the neutral 3rd party will discuss the case with the executives and seek to resolve the dispute between them.
Advantages of this procedure include many issues are often ‘narrowed-down’ resulting in the inevitable court case to be shorter. Similarly in a business dispute it would be better to reach a settlement out of court, so as to continue future business dealings with one another. It is often said about mediation that, “Everyone wins”.
The “London Centre for Dispute Resolution” counts among its members, many of the capital’s big law firms and many significant multinational corporations.
Businesses say that using the centre has saved them thousands in court costs. Typical mediation service costs around £1500, whereas court costs can amount to £80,000+.
The centre claims that 80% of cases it dealt with are resolved, whilst the remaining 20% have their issues significantly narrowed-down resulting in a shorter court hearing.
However, as with other ADR, there is guarantee of a case being resolved.
Conciliation;
Similar to mediation except that the neutral 3rd party will play a more active role in suggesting a solution to resolve a dispute.
Arbitration;
Arbitration is the voluntary submission of a dispute to a body other than a judge, whose decision is binding.
The principles of arbitration as outlined under the Arbitration act are to; “obtain a fair resolution to a dispute by an impartial tribunal devoid of unnecessary delay or cost.”
An agreement to arbitrate can be made before a dispute arises or when it becomes apparent.
Nowadays, there is widespread use of the ‘Scott v Avery’ clause which is a clause in a contract where the parties agree to have any future dispute regarding the contract settled by arbitration.
The arbitrator may be freely chosen by both parties. An ‘Institute of Arbitrators’ exists, which can provide trained arbitrators for disputes. If they cannot agree the court will select a suitable arbitrator. Usually, there is one sole arbitrator but more may be chosen. Increasingly, arbitrators are experts in the field in dispute, e.g. a lawyer will often preside over a case involving a point of law.
The time and place of hearing can also be chosen at the discretion of the parties in consultation with the arbitrator. This adds to the freedom and flexibility afforded to parties.
The actual procedure varies greatly due to the freedom given for ADR. The most common procedure is paper arbitration, which involves the parties submitting written relevant points of the case on which basis the arbitrator will reach a decision. However, this may be followed by a hearing where the parties and witnesses will make oral submissions in the presence of the arbitrator.
Advantages & Disadvantages of Arbitration;
+ Cheap, quick and private.
+ Arbitrator can be chosen, so an expert in the field in dispute may be selected.
+ time and place of hearing can be chosen by the parties.
+ Decision is binding and enforceable by the courts.
- Limited rights of appeal.
- Professional arbitrator fees can be expensive.
