Alternative Dispute Resolution (‘ADR’) is a collective term that describes a wide range of processes used to resolve civil disputes. They are an alternative to the more traditional means of resolving disputes by way of litigation.
Court litigation is adversarial by nature. Judges impose their own decisions on the parties so the process tends to be formal and requires strict rules of procedure and evidence. In this environment the parties’ positions often become polarised and this can lead to an increasingly expensive and protracted resolution process. ADR seeks to avoid this by enabling the parties to achieve their own solution. The most common examples of ADR are Mediation, Negotiation, Conciliation and Arbitration.
Mediation employs a neutral third party (the mediator) to assist the parties in negotiating a settlement.
It is fast – a mediation can be convened relatively quickly and the time needed to achieve a result is usually much less than through the Court system,
It is cheap – while mediators charge a fee the costs are usually much less than the parties would incur by going to Court. When the use of mediation services is directed by the Court itself mediation is usually free.
Negotiation creates a dialogue between the parties intended to achieve mutual agreement.
It is often assisted by the involvement of professional third parties, usually lawyers, who represent the parties’ interests rather than being neutral,
Tactics – negotiation is often thought of as tactical. In the context of a dispute the parties may see one another as adversaries, which leads to “hard-bargaining” as each tries to give away as little as possible. However, many disputes arise between parties where the relationship between them needs to be preserved and in these circumstances negotiation may be more integrated and focused on mutual gain.
Conciliation involves a neutral third party acting as a “go between”. The conciliator meets the parties separately in order to conciliate and reach a solution usually by way of concession.
Arbitration most resembles the Court process and is adjudicative rather than consensual.
Disputants submit their case to an independent arbitrator who will make a binding decision. While the parties must agree to arbitrate (often by way of prior contract) they are then bound by the decision of the arbitrator,
The parties can agree on who the arbitrator will be, the rules of procedure and evidence, and other issues to be addressed.
ADR is growing in use and acceptance in New Zealand and around the world. The recognition of ADR as an effective means of resolving disputes has meant a number of jurisdictions, including New Zealand, often require the parties to undertake ADR as part of the ordinary judicial process. The Family Court and Tenancy Tribunal regularly make use of mediation services, and Judicial Settlement Conferences (a type of Judge led mediation) are also used in dealing with other civil disputes. Although ADR will always require the parties consent in order to resolve disputes, the parties may be required to undertake ADR in the hope an agreement can be reached before the Court will consider the dispute.