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Is Alternative Dispute Resolution Right for Me?

Unfortunately, disputes can occur for many reasons in all aspects of life, either personal or professional, and almost all disputes can be solved through Alternative Dispute Resolution such as divorce and commercial disputes.

Alternative Dispute Resolution (ADR) is a way to resolve a legal dispute without having to go to court.

ADR schemes are when an independent third party acts as a middleman between you and the other party if you are unable to resolve an issue yourselves.

What Are The Two Types of ADR?

There are two common types of ADR which are arbitration and mediation:

Arbitration: This is where an independent third party will look at the facts of the matter and will make a decision that is legally binding for all parties involved.
Mediation: Mediation is when an independent third party will assist you and the other parties involved to reach a mutually acceptable decision. Using a mediator is ideal for situations in which you need a formal structure to your communications in order to reach an agreement. Through mediation, the mediator is unable to impose a solution and can only help you find a solution.

Courts have long been driving parties down the route of ADR before taking matters into court. Parties are now required to engage in “pre-action” correspondence before they are able to continue with court proceedings.

A benefit of this, if the dispute returns to court, is that relevant facts and issues are already compiled and understood which aids in further legal proceedings.

What Are The Benefits of ADR?

ADR not only avoids the act of going to court but also has a number of other benefits such as:

Faster. When disputes are solved through ADR, it is often a much quicker turnaround due to the courts seeing severe delays due to backlogs.

Confidential. All ADR is confidential: when both parties come to a settlement via ADR, there is no public record submitted of the terms which have been agreed upon or the process of reaching the agreement.
Less formal. Due to the nature of ADR, it is a less formal environment which can be helpful in situations such as divorce which is a personal matter.
Allows for the continuation of relationships. Whether you are suffering through an issue with an employer, divorce or a business-to-business dispute, there are many situations where you wish to have a continued relationship with the other party. ADR can assist you in maintaining this relationship in a way which courts cannot.

so, it has many benefits but it is not one-size-fits-all and not all legal disputes will benefit from this course of action.

Are There Disadvantages of ADR?

Like with all aspects of legal action, there are some disadvantages to using ADR for your dispute however the benefits of it will usually outweigh this.

Disadvantages of ADR include:

In mediation, any settlement is voluntary so you are unable to be certain of receiving a result
Even though ADR is likely to take less time than a court, it does not stop the clock running if you have a time limit to resolve the dispute. This means that should ADR be unsuccessful, you may have limited time to take further action.

These disadvantages can make ADR a less beneficial avenue for some people but when is ADR not a suitable option and can it be avoided to go to court?

When is ADR Not a Suitable Option?

ADR is an excellent solution for some disputes however it is not suitable or recommended for all issues. For example, if one or more of the parties refuses to admit that there is a problem then it is unlikely that you will be able to use ADR to resolve your issue.

Other situations when it is not an appropriate option can include, but are not limited to:

When one or more parties are reluctant to engage in negotiations
If a party is pursuing the dispute for the sake of causing trouble
When one party is claiming an unreasonably large sum or other unrealistic request and will not be satisfied with any less
If a party is intending on using the dispute to put out a message to the public such as in the interest of intellectual property
If you are under a limited time period to take action

Even though the courts are putting increased pressure on parties to turn to ADR before pursuing legal court action, they are able to allow parties to skip ADR if the situation is under such circumstances.

Are All ADR Decisions Legally Binding?

When entering into a legal dispute, you should understand what decisions are legally binding and which are not. Mediation decisions are not legally binding, whereas arbitration is legally binding.

Arbitration is a final and legally binding agreement in the same way which a court judgment is. Following this, an arbitration agreement is also enforceable in the same way which a court judgement is.

Mediation is not legally binding and allows you and the other party to have control over the outcome of the dispute. Since the mediator has no legal decision-making power, the terms which you decide upon are not legally binding until you have signed a legal document.

Who Pays For ADR?

If you are deciding to proceed with ADR for your dispute, then it is vital that you understand the costs involved:

Generally, each party in the process will usually pay for their own costs of the ADR process themselves. However, you may be able to claim costs back through the settlement which you achieve.

How Long Does ADR Take?

This is dependent on the complexity of the issues and the opinions of all parties involved. If it is a simple issue it could take as little as half a day, however, a full day is more common and some can take even longer.

The mediator can set a realistic deadline to assist the process if it is liable to take a disproportionate amount of time but generally, the more complex and the issue, the longer it will take.