Alternative dispute resolution

Insurance Dictionary: Alternative Dispute Resolution (ADR)

Many different, unofficial, and voluntary nonlitigation processes employed by insurance companies to resolve contractual disputes with their insureds. Examples would include nonbinding arbitration, simple negotiations between the insurance company and its insured, and mediation by a neutral third party. The objective of this type of dispute resolution is to avoid the substantial expenses that protracted litigation would generate.

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Small Business Encyclopedia: Alternative Dispute Resolution (ADR)

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Alternative dispute resolution (ADR) is a term that refers to several different (but philosophically linked) methods of resolving business-related disputes outside traditional legal and administrative forums. These methodologies, which include various types of arbitration and mediation, have surged in popularity in recent years because companies and courts became extremely frustrated over the expense, time, and emotional toll involved in resolving disputes through the usual avenues of litigation. "The opposing sides in litigation are attacked and demeaned at every opportunity during the course of a lawsuit," pointed out Wayne Hoagland in Nation's Restaurant News. "The system is very expensive, disruptive and protracted, and by its very nature it tends to drive the parties further apart, weakening their relationships, often irreparably." ADR programs emerged as an alternative, litigation-free method of resolving business disputes.

Analysts also trace the rise of ADR methods to changing attitudes within the American judicial system. Business Horizons contributor Stephen L. Hayford observed that until the 1980s, "attempts by business firms to avoid litigation …were frustrated by a longstanding hostility on the part of the courts toward any devices that infringed on their jurisdiction." But during the 1980s, Hayford noted that a new body of case law emerged that sanctioned the use of binding arbitration provisions in commercial contracts between companies, business partners, employees and employers, etc. This body of law continued to evolve in the late 1990s. For example, the Alternative Dispute Resolution Act of 1998 extended ADR mechanisms throughout the federal district court system. As Simeon Baum stated in CPA Journal, "the act recognizes that ADR, when properly accepted, practiced, and administered, can not only save time and money and reduce court burdens, but also 'provide a variety of benefits, including greater satisfaction of the parties, innovative methods of resolving disputes, and greater efficiency in achieving settlements."'

Today, legal and corporate acceptance of alternative dispute resolution as a legitimate remedy for addressing business disagreements is reflected in the language of business contracts. ADR contingencies have become a standard element in many contracts between companies and their employees, partners, customers, and suppliers. As U.S. News and World Report noted, "virtually every state has experimented with some form of ADR, and the number of private arbitrations and mediations handled through the American Arbitration Association alone has nearly doubled in the past decade, to a projected 90,000 in 1998." This growth seems to confirm Hoagland's claim that "alternative dispute resolution is the dispute-resolution mechanism of the future."

ARBITRATION ASSOCIATIONS AND ORGANIZATIONS. There are several U.S. organizations and agencies that are directly involved in arbitration and arbitration issues. These include the National Academy of Arbitrators (NAA), the American Arbitration Association (AAA), and the Federal Mediation Conciliation Service (FMCS). The NAA was founded in 1947 as a non-profit organization to foster high standards for arbitration and arbitrators and to promote the process. The NAA works to attain these objectives through seminars, annual conferences, and educational programs. The non-profit AAA offers its services for voluntary arbitration as part of its mandate to promote the use of arbitration in all fields. The FMCS, meanwhile, maintains a roster from which arbitrators can be selected and champions procedures and guidelines designed to enhance the arbitration process.

Primary Forms of Adr

ARBITRATION. Arbitration is the procedure by which parties agree to submit their disputes to an independent neutral third party, known as an arbitrator, who considers arguments and evidence from both sides, then hands down a final and binding decision. This alternative, which can be used to adjudicate business-to-business, business-to-employee, or business-to-customer disputes, can utilize a permanent arbitrator, an independent arbitrator selected by the two parties to resolve a particular grievance, or an arbitrator selected through the procedures of the AAA or FMCS. A board of arbitrators can also be used in a hearing.

After the arbitrator is selected, both sides are given the opportunity to present their perspectives on the issue or issues in dispute. These presentations include testimony and evidence that are provided in much the same way as a court proceeding, although formal rules of evidence do not apply. Upon completion of the arbitration hearing, the arbitrator reviews the evidence, testimony, and the collective bargaining agreement, considers principles of arbitration, and makes a decision. The arbitrator's decision is generally rendered within 60 days. Hayford noted that "[binding arbitration] minimizes pre-hearing machinations with regard to discovery, motion practice, and the other preliminary skirmishes that extend the time, expense, and consternation of court litigation. In exchange, the parties to a contractual binding arbitration provision agree to accept the risk of being stuck with an unacceptable decision."

Other forms of arbitration include the following:

Expedited arbitration is a process intended to speed up (and save money on) the arbitration process with an informal hearing. Under this process, decisions are generally rendered within five days. It was first used in 1971 in settling disputes in the steel industry.
Interest arbitration is the use of an arbitrator or arbitrator board to render a binding decision in resolving a dispute over new contract terms.
Final offer selection arbitration is an interest arbitration process in which the arbitrator or arbitrator board selects either the union or management proposal to the solution. There can be no compromised decisions. This process is also termed either-or arbitration.
Tripartite arbitration is a process wherein a three-member panel of arbitrators is used to reach a decision. Both labor and management select an arbitrator and the third is selected by the other two arbitrators or the parties to the dispute as a neutral participant.

MEDIATION. In contrast to arbitration, mediation is a process whereby the parties involved utilize an out-side party to help them reach a mutually agreeable settlement. Rather than dictate a solution to the dispute between labor and management, the mediator—who maintains scrupulous neutrality throughout—suggests various proposals to help the two parties reach a mutually agreeable solution. In mediation, the various needs of the conflicting sides of an issue are identified, and ideas and concepts are exchanged until a viable solution is proposed by either of the parties or the mediator. Rarely does the mediator exert pressure on either party to accept a solution. Instead, the mediator's role is to encourage clear communication and compromise in order to resolve the dispute. The terms "arbitration" and "mediation" are sometimes used interchangeably, but this mixing of terminology is careless and inaccurate. While the mediator suggests possible solutions to the disputing parties, the arbitrator makes a final decision on the labor dispute which is binding on the parties.

Mediation can be a tremendously effective tool in resolving disputes without destroying business relationships. It allows parties to work toward a resolution out of the public eye (the courts) without spending large sums on legal expenses. Its precepts also ensure that a company will not become trapped in a settlement that it finds unacceptable (unlike an arbitration decision that goes against the company). But Hayford commented that "mediation only works when the parties employing it are willing to go all out in the attempt to achieve settlement," and he warned that "the mediator must be selected carefully, with an eye toward the critical attributes of neutrality, subject matter and process expertise, and previous track record." Finally, he noted that with mediation, there is a "lack of finality inherent in a voluntary, conciliation-based procedure."

Other forms of mediation often employed in labor disputes include "grievance mediation" and "preventive mediation." Grievance mediation is an attempt to ward off arbitration through a course of fact-finding that is ultimately aimed at promoting dialogue between the two parties. Preventive mediation dates to the Taft-Hartley Act (1947) and is an FMCS program intended to avoid deeper divisions between labor and management over labor issues. Also termed technical assistance, the program encompasses training, education, consultation, and analysis of union-management disputes.

OMBUDS. An ombudsman is a high-ranking company manager or executive whose reputation throughout the company enables him/her to facilitate internal disputes between the company and employees. Hayford points to several benefits of ombud-based ADR: "It provides a confidential, typically low-key approach to dispute resolution that keeps conflicts 'in the family.'.…Properly effected, the ombuds mechanism can do much to enhance the perception that the company is concerned and eager to address the problems of its employees by providing them with an accessible, nonthreatening avenue for seeking redress when they believe they have been wronged." The primary drawback of ADR by the ombud process, however, is that many companies—whether large or small—do not have an individual equipped with the reputation, skills, or training to take on such a task.

NEUTRAL EVALUATION. In neutral evaluations, a neutral individual with a background in ADR listens to each party give its version of events. After their perspectives have been considered, the neutral evaluator offers his/her opinion on the disagreement. This opinion is not binding in any way, but if the neutral party is respected and trusted by both sides, it can help the parties reassess their negotiating positions with an eye toward finding common ground.

Utilizing Adr

The popularity of alternative dispute resolution has increased dramatically in recent years. Small-and medium-sized businesses have contributed to this surge in use, drawn by the promise of cost and time savings. But ADR provisions need to be weighed carefully before they are incorporated into any business agreement with partners, employees, vendors, or clients. Legal assistance is particularly vital for small business owners who wish to incorporate arbitration provisions into their contracts, given their finality.

Further Reading:

Baum, Simeon H. "The ADR Act of 1998 Offers Opportunities for Accountants." CPA Journal. March 1999.

Brewer, Thomas J., and Lawrence R. Mills. "Combining Mediation and Arbitration." Dispute Resolution Journal. November 1999.

Costello Jr., Edward J. "ADR: Virtue or Vice?" Dispute Resolution Journal. May 1999.

Elkouri, Frank, et al. How Arbitration Works. BNA Books, 1997.

Ford, Hunter. "Arbitration Pits Business Vs. Consumers." Birmingham Business Journal. September 1, 2000.

Harness III, C.C., and Jonathan R. Mook. "ADR: The Privatizing of Employment Dispute Resolution." Employment Relations Today. Winter 1997.

Hayford, Stephen L. "Alternative Dispute Resolution." Business Horizons. January 2000.

Hoagland, Wayne. "Alternative Dispute Resolution Provides More Civilized Settlement of Disagreements." Nation's Restaurant News. September 18, 2000.

Jasper, Margaret C. The Law of Alternative Dispute Resolution. Oceana Publications, 2000.

Kagel, Sam and Kathy Kelly. The Anatomy of Mediation: What Makes it Work. Washington: Bureau of National Affairs, 1989.

Kleiner, Carolyn. "The Action Out of Court." U.S. News and World Report. May 29, 1999.

Phillips, Gerald F. "What Your Client Needs to Know about ADR." Dispute Resolution Journal. February 2000.

Rendell, Marjorie O. "ADR Versus Litigation." Dispute Resolution Journal. February 2000.

Stitt, Allan J. Alternative Dispute Resolution for Organizations: How to Design a System for Effective Conflict Resolution. John Wiley, 1998.

Wall, Michael. "Settlements Rise as Way to Avoid Court Wrangling." Atlanta Business Chronicle. June 9, 2000.

Woodard, Kathy L. "Arbitration Growing in Popularity for Its Cost Benefits, Efficiency." Business First-Columbus. June 16,2000.

Law Encyclopedia: Alternative Dispute Resolution

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This entry contains information applicable to United States law only.

Procedures for settling disputes by means other than litigation; e.g., by arbitration, mediation, or minitrials. Such procedures, which are usually less costly and more expeditious than litigation, are increasingly being used in commercial and labor disputes, divorce actions, in resolving motor vehicle and medical malpractice tort claims, and in other disputes that would likely otherwise involve court litigation.

In the late 1980s and early 1990s, many people became increasingly concerned that the United States' traditional method of resolving legal disputes, through conventional litigation, had become too expensive, too slow, and too cumbersome for many civil lawsuits (cases between private parties). This concern has led to the growing use of ways other than litigation to resolve disputes. These other methods are commonly known as alternative dispute resolution (ADR).

ADR techniques are being used more and more, as parties and lawyers and courts realize that these techniques can often help them resolve legal disputes faster and cheaper and more privately than can conventional litigation. More- over, many people prefer ADR approaches because they see these methods as being more creative and more focused on problem solving than litigation, which has always been based on an adversarial model.

The term alternative dispute resolution is somewhat of a misnomer. In reality, fewer than five percent of all lawsuits filed go to trial; the other 95 percent are settled or otherwise concluded before trial. Thus, it is more accurate to think of litigation as the alternative and ADR as the norm. Despite this, the term alternative dispute resolution has become such a well-accepted shorthand for the vast array of nonlitigation processes that its continued use seems assured.

Although certain ADR techniques are well established and frequently used — for example, mediation and arbitration — alternative dispute resolution has no fixed definition. The term alternative dispute resolution includes a wide range of processes, many with little in common except that each is an alternative to full-blown litigation. Litigants, lawyers, and judges are constantly adapting existing ADR processes, or devising new ones, to meet the unique needs of their legal disputes. The definition of alternative dispute resolution is constantly expanding to include new techniques.

ADR techniques have not been created to undercut the traditional U.S. court system. Certainly, ADR options can be used in cases where litigation is not the most appropriate route. However, they can also be used in conjunction with litigation when the parties want to explore other options but also want to remain free to return to the traditional court process at any point.

Of the many ways to resolve a legal dispute other than formal litigation, mediation, arbitration, mediation-arbitration, minitrial, early neutral evaluation, and summary jury trial are the most common.

Mediation

Mediation — also known as conciliation — is the fastest growing ADR method. Unlike litigation, mediation provides a forum in which parties can resolve their own disputes, with the help of a neutral third party.

Mediation depends upon the commitment of the disputants to solve their own problems. The mediator, also known as a facilitator, never imposes a decision upon the parties. Rather, the mediator's job is to keep the parties talking and to help move them through the more difficult points of contention. To do this, the mediator typically takes the parties through five stages.

First, the mediator gets the parties to agree on procedural matters, such as by stating that they are participating in the mediation voluntarily, setting the time and place for future sessions, and executing a formal confidentiality agreement. One valuable aspect of this stage is that the parties, which often have been unable to agree on anything, begin a pattern of saying yes.

Second, the parties exchange initial positions, not by way of lecturing the mediator but in a face-to-face exchange with each other. Often, this is the first time each party hears the other's complete and uninterrupted version of its position. The parties may begin to see that the story has two sides and that it may not be so unreasonable to compromise their initial positions.

Third, if the parties have agreed to what is called a caucusing procedure, the mediator meets with each side separately in a series of confidential, private meetings and begins exploring settlement alternatives, perhaps by engaging the parties in some "reality testing" of their initial proposals. This process, sometimes called shuttle diplomacy, often uncovers areas of flexibility that the parties could not see, or would have been uncomfortable putting forward officially.

Fourth, when the gap between the parties begins to close, the mediator may carry offers and counteroffers back and forth between them, or the parties may elect to return to a joint session to exchange their offers.

Finally, when the parties agree upon the broad terms of a settlement, they formally reaffirm their understanding of that settlement, complete the final details, and sign a settlement agreement.

Mediation permits the parties to design and retain control of the process at all times and, ideally, eventually strike their own bargain. Evidence suggests that parties are more willing to comply with their own agreements, achieved through mediation, than with adjudicated decisions, imposed upon them by an outside party such as a judge.

An additional advantage is that when the parties reach agreement in mediation, the dispute is over — they face no appeals, delays, continuing expenses, or unknown risks. The parties can begin to move forward again. Unlike litigation, which focuses on the past, mediation looks to the future. Thus, a mediated agreement is particularly valuable to parties that have an ongoing relationship, such as a commercial or employment relationship.

Arbitration

Arbitration more closely resembles traditional litigation in that a neutral third party hears the disputants' arguments and imposes a final and binding decision that is enforceable by the courts. The difference is that in arbitration, the disputants generally agreed to the procedure before the dispute arose; the disputants mutually decide who will hear their case; and the proceedings are typically less formal than in a court of law. One extremely important difference is that, unlike court decisions, arbitration offers almost no effective appeal process. Thus, when an arbitration decision is issued, the case is ended.

Final and binding arbitration has long been utilized in labor-management disputes. For decades, unions and employers have found it mutually advantageous to have a knowledgeable arbitrator — whom they themselves have chosen — resolve their disputes in this cheaper and faster fashion. One primary advantage for both sides has been that taking disputes to arbitration has kept everyone working by providing an alternative to strikes and lockouts, and has kept everyone out of the courts. Given this very successful track record, the commercial world has become enthusiastic about arbitration for other types of disputes as well.

Now a new form of arbitration, known as court-annexed arbitration, has emerged. Many variations of court-annexed arbitration have developed throughout the United States. One can be found in Minnesota, where, in the mid-1990s, the Hennepin County District Court adopted a program making civil cases involving less than $50,000 subject to mandatory nonbinding arbitration. The results of that experimental program were so encouraging that legislation was later enacted expanding the arbitration program statewide. Now, most cases are channeled through an ADR process before they can be heard in the courts. A growing number of other federal and state courts are adopting this or similar approaches.

Mediation-Arbitration

As its name suggests, mediation-arbitration, or med-arb, combines mediation and arbitration. First, a mediator tries to bring the parties closer together and help them reach their own agreement. If the parties cannot compromise, they then proceed to arbitration — before that same third party or before a different arbitrator — for a final and binding decision.

Minitrial

The minitrial, a development in ADR, is finding its greatest use in resolving large-scale disputes involving complex questions of mixed law and fact, such as product liability, massive construction, and antitrust cases. In a minitrial, each party presents its case as in a regular trial, but with the notable difference that the case is "tried" to the parties themselves, and the presentations are dramatically abbreviated.

In a minitrial, lawyers and experts present a condensed version of the case to top management of both parties. Often, a neutral adviser— sometimes an expert in the subject area — sits with management and conducts the hearing. After these presentations, top management representatives — by now more aware of the strengths and weaknesses of each side — try to negotiate a resolution of the problem. If they are unable to do so, they often ask for the neutral adviser's best guess as to the probable outcome of the case. They then resume negotiations.

The key to the success of this approach is the presence of both sides' top officials and the exchange of information that takes place during the minitrial. Too often, prelitigation work has insulated top management from the true strengths and weaknesses of their cases. Minitrial presentations allow them to see the dispute as it would appear to an outsider and set the stage for a cooperative settlement.

Early Neutral Evaluation

An early neutral evaluation (ENE) is used when one or both parties to a dispute seek the advice of an experienced individual, usually an attorney, concerning the strength of their cases. An objective evaluation by a knowledgeable outsider can sometimes move parties away from unrealistic positions, or at least provide them with more insight into their cases' strengths and weaknesses. Of course, the success of this technique depends upon the parties' faith in the fairness and objectivity of the third-party neutral, and their willingness to compromise.

Summary Jury Trial

Summary jury trials have been used primarily in the federal courts, where they provide parties with the opportunity to "try" their cases in an abbreviated fashion before a group of jurors, who then deliberate and render an advisory opinion.

Like an early neutral evaluation, an advisory opinion from a summary jury trial can help the parties assess the strengths and weaknesses of their cases and sometimes can facilitate the settlement of the dispute. Another advantage of the summary jury trial, as well as the minitrial, is that it can be scheduled much sooner than a trial. When early evaluations help the parties settle their cases, the parties typically avoid much of the delay, expense, and anxiety that occurs in litigation.

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Alternative Dispute Resolution

Types

Arbitration
Collaborative divorce
Collaborative law
Conciliation
Conflict resolution
Dispute resolution
Mediation
Negotiation
Online dispute resolution
Party-directed mediation
Restorative justice

Types and features of alternative dispute resolution

ADR is generally classified into at least four types: negotiation, mediation, collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as well, but for present purposes it can be regarded as a form of mediation. See conciliation for further details.) ADR can be used alongside existing legal systems such as Sharia Courts within Common Law jurisdictions such as the UK.

ADR traditions vary somewhat by country and culture. There are significant common elements which justify a main topic, and each country or region's difference should be delegated to sub-pages.

ADR or Alternative Dispute Resolution is of two historic types. First, methods for resolving disputes outside of the official judicial mechanisms. Second, informal methods attached to or pendant to official judicial mechanisms. There are in addition free-standing and or independent methods, such as mediation programs and ombuds offices within organizations. The methods are similar, whether or not they are pendant, and generally use similar tool or skill sets, which are basically sub-sets of the skills of negotiation.

ADR includes informal tribunals, informal mediative processes, formal tribunals and formal mediative processes. The classic formal tribunal forms of ADR are arbitration (both binding and advisory or non-binding) and private judges (either sitting alone, on panels or over summary jury trials). The classic formal mediative process is referral for mediation before a court appointed mediator or mediation panel. Structured transformative mediation as used by the U.S. Postal Service is a formal process. Classic informal methods include social processes, referrals to non-formal authorities (such as a respected member of a trade or social group) and intercession. The major differences between formal and informal processes are (a) pendency to a court procedure and (b) the possession or lack of a formal structure for the application of the procedure.

For example, freeform negotiation is merely the use of the tools without any process. Negotiation within a labor arbitration setting is the use of the tools within a highly formalized and controlled setting.

Calling upon an organizational ombudsman's office is never a formal procedure. (Calling upon an organizational ombudsman is always voluntary; by the International Ombudsman Association Standards of practice, no one can be compelled to use an ombuds office.)

Informal referral to a co-worker known to help people work out issues is an informal procedure. Co-worker interventions are usually informal.

Conceptualizing ADR in this way makes it easy to avoid confusing tools and methods (does negotiation once a law suit is filed cease to be ADR? If it is a tool, then the question is the wrong question) (is mediation ADR unless a court orders it? If you look at court orders and similar things as formalism, then the answer is clear: court annexed mediation is merely a formal ADR process).

Dividing lines in ADR processes are often provider driven rather than consumer driven. Educated consumers will often choose to use many different options depending on the needs and circumstances that they face.

Finally, it is important to realize that conflict resolution is one major goal of all the ADR processes. If a process leads to resolution, it is a dispute resolution process.^[2]

The salient features of each type are as follows:

In negotiation, participation is voluntary and there is no third party who facilitates the resolution process or imposes a resolution. (NB – a third party like a chaplain or organizational ombudsperson or social worker or a skilled friend may be coaching one or both of the parties behind the scene, a process called "Helping People Help Themselves" – see Helping People Help Themselves, in Negotiation Journal July 1990, pp. 239–248, which includes a section on helping someone draft a letter to someone who is perceived to have wronged them.)
In mediation, there is a third party, a mediator, who facilitates the resolution process (and may even suggest a resolution, typically known as a "mediator's proposal"), but does not impose a resolution on the parties. In some countries (for example, the United Kingdom), ADR is synonymous with what is generally referred to as mediation in other countries.
In collaborative law or collaborative divorce, each party has an attorney who facilitates the resolution process within specifically contracted terms. The parties reach agreement with support of the attorneys (who are trained in the process) and mutually-agreed experts. No one imposes a resolution on the parties. However, the process is a formalized process that is part of the litigation and court system. Rather than being an Alternative Resolution methodology it is a litigation variant that happens to rely on ADR like attitudes and processes.
In arbitration, participation is typically voluntary, and there is a third party who, as a private judge, imposes a resolution. Arbitrations often occur because parties to contracts agree that any future dispute concerning the agreement will be resolved by arbitration. This is known as a 'Scott Avery Clause'. In recent years, the enforceability of arbitration clauses, particularly in the context of consumer agreements (e.g., credit card agreements), has drawn scrutiny from courts. Although parties may appeal arbitration outcomes to courts, such appeals face an exacting standard of review.

Beyond the basic types of alternative dispute resolutions there are other different forms of ADR:

Case evaluation: a non-binding process in which parties present the facts and the issues to a neutral case evaluator who advises the parties on the strengths and weaknesses of their respective positions, and assesses how the dispute is likely to be decided by a jury or other adjudicator.

Early neutral evaluation: a process that takes place soon after a case has been filed in court. The case is referred to an expert who is asked to provide a balanced and neutral evaluation of the dispute. The evaluation of the expert can assist the parties in assessing their case and may influence them towards a settlement.

Family group conference: a meeting between members of a family and members of their extended related group. At this meeting (or often a series of meetings) the family becomes involved in learning skills for interaction and in making a plan to stop the abuse or other ill-treatment between its members.

Neutral fact-finding: a process where a neutral third party, selected either by the disputing parties or by the court, investigates an issue and reports or testifies in court. The neutral fact-finding process is particularly useful for resolving complex scientific and factual disputes.

Ombuds: third party selected by an institution – for example a university, hospital, corporation or government agency – to deal with complaints by employees, clients or constituents. The Standards of Practice for Organizational Ombuds may be found at http://www.ombudsassociation.org/standards/.

An organizational ombudsman works within the institution to look into complaints independently and impartially.^[3]

"Alternative" dispute resolution is usually considered to be alternative to litigation. It also can be used as a colloquialism for allowing a dispute to drop or as an alternative to violence.

In recent years there has been more discussion about taking a systems approach in order to offer different kinds of options to people who are in conflict, and to foster "appropriate" dispute resolution. (See Lynch, J. "ADR and Beyond: A Systems Approach to Conflict Management", Negotiation Journal, Volume 17, Number 3, July 2001, Volume, p. 213.)

That is, some cases and some complaints in fact ought to go to formal grievance or to court or to the police or to a compliance officer or to a government IG. Other conflicts could be settled by the parties if they had enough support and coaching, and yet other cases need mediation or arbitration. Thus "alternative" dispute resolution usually means a method that is not the courts. "Appropriate" dispute resolution considers all the possible responsible options for conflict resolution that are relevant for a given issue.^[4]

Arbitration and mediation are the best known and most commonly used forms of ADR within the UK. However in recent years adjudication is rapidly gaining attention as a quick, fair and cheap was to settle disputes. ^[5]

ADR can increasingly be conducted online, which is known as online dispute resolution (ODR, which is mostly a buzzword and an attempt to create a distinctive product). It should be noted, however, that ODR services can be provided by government entities, and as such may form part of the litigation process. Moreover, they can be provided on a global scale, where no effective domestic remedies are available to disputing parties, as in the case of the UDRP and domain name disputes. In this respect, ODR might not satisfy the "alternative" element of ADR.

Civil disputes

These are disputes between organisations or private individuals in respect of differences about the parties' respective interests and rights. Some legal rights are inherent, such as ownership or property or personal safety, whilst other rights arise out of agreements.^[6]

Country-specific examples

China

Chinese trained mediators have a long history and were practicing in court annexed mediations in the United States more than thirty years ago.

Modern era

Traditional people's mediation has always involved the parties remaining in contact for most or all of the mediation session. The innovation of separating the parties after (or sometimes before) a joint session and conducting the rest of the process without the parties in the same area was a major innovation and one that dramatically improved mediation's success rate.

Traditional arbitration involved heads of trade guilds or other dominant authorities settling disputes. The modern innovation was to have commercial vendors of arbitrators, often ones with little or no social or political dominance over the parties. The advantage was that such persons are much more readily available. The disadvantage is that it does not involve the community of the parties. When wool contract arbitration was conducted by senior guild officials, the arbitrator combined a seasoned expert on the subject matter with a socially dominant individual whose patronage, good will and opinion were important.

Private judges and summary jury trials are cost and time savings processes that have had limited penetration due to the alternatives becoming more robust and accepted.

Iceland

The Saga of Burnt Njal is the story of a mediator who was so successful that he eventually threatened the local power structure. It ends in tragedy with the unlawful burning of Njal alive in his home, the escape of a friend of the family, a mini-war and the eventual ending of the dispute by the intermarriage of the two strongest survivors. It illustrates that mediation was a powerful process in Iceland before the era of kings.

Roman Empire

Latin has a number of terms for mediator that predate the Roman Empire. Any time there are formal adjudicative processes it appears that there are informal ones as well. It is probably fruitless to attempt to determine which group had mediation first.

India

Alternative dispute resolution in India is not new and it was in existence even under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to accommodate the harmonisation mandates of UNCITRAL Model. To streamline the Indian legal system the traditional civil law known as Code of Civil Procedure, (CPC) 1908 has also been amended and section 89 has been introduced. Section 89 (1) of CPC provides an option for the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement.

Due to extremely slow judicial process, there has been a big thrust on Alternate Dispute Resolution mechanisms in India. While Arbitration and Conciliation Act, 1996 is a fairly standard western approach towards ADR, the Lok Adalat system constituted under National Legal Services Authority Act, 1987 is a uniquely Indian approach.

Arbitration and Conciliation Act, 1996

Part I of this act formalizes the process of Arbitration and Part III formalizes the process of Conciliation. (Part II is about Enforcement of Foreign Awards under New York and Geneva Conventions.)

Arbitration

The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in writing. The contract regarding which the dispute exists, must either contain an arbitration clause or must refer to a separate document signed by the parties containing the arbitration agreement. The existence of an arbitration agreement can also be inferred by written correspondence such as letters, talex, or telegrams which provide a record of the agreement. An exchange of statement of claim and defence in which existence of an arbitration agreement is alleged by one party and not denied by other is also considered as valid written arbitration agreement.

Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. There are only two grounds upon which a party can challenge the appointment of an arbitrator – reasonable doubt in the impartiality of the arbitrator and the lack of proper qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or a panel of arbitrators so appointed constitute the Arbitration Tribunal.

Except for some interim measures, there is very little scope for judicial intervention in the arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request, there is little the party can do accept to approach a court after the tribunal makes an award. Section 34 provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award.

Once the period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a decree of the court.

Conciliation

Conciliation is a less formal form of arbitration. This process does not require an existence of any prior agreement. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed. In case of multiple conciliators, all must act jointly. If a party rejects an offer to conciliate, there can be no conciliation.

Parties may submit statements to the conciliator describing the general nature of the dispute and the points at issue. Each party sends a copy of the statement to the other. The conciliator may request further details, may ask to meet the parties, or communicate with the parties orally or in writing. Parties may even submit suggestions for the settlement of the dispute to the conciliator.

When it appears to the conciliator that elements of settlement exist, he may draw up the terms of settlement and send it to the parties for their acceptance. If both the parties sign the settlement document, it shall be final and binding on both.

Note that in USA, this process is similar to Mediation. However, in India, Mediation is different from Conciliation and is a completely informal type of ADR mechanism.

Lok Adalat

It roughly means "People's court". India has had a long history of resolving disputes through the mediation of village elders. The system of Lok Adalats is an improvement on that and is based on Gandhian principles. This is a non-adversarial system, where by mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences.

There is no court fee and no rigid procedural requirement (i.e. no need to follow process given by Civil Procedure Code or Evidence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts.

Cases that are pending in regular courts can be transferred to a Lok Adalat if both the parties agree. A case can also be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party.

The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 because it is a judgement by consent.

All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court.

Permanent Lok Adalat for Public Utility Services

In order to get over the major drawback in the existing scheme of organisation of Lok Adalats under Chapter VI of the Legal Services Authorities Act, 1987, in which if the parties do not arrive at any compromise or settlement, the unsettled case is either returned back to the Court of law or the parties are advised to seek remedy in a court of law, which causes unnecessary delay in dispensation of justice, Chapter VI A was introduced in the Legal Services Authorities Act, 1987, by Act No.37/2002 with effect from 11-06-2002 providing for a Permanent Lok Adalat to deal with pre-litigation, conciliation and settlement of disputes relating to Public Utility Services, as defined u/sec.22 A of the Legal Services Authorities Act, 1987, at pre-litigation stage itself, which would result in reducing the work load of the regular courts to a great extent.

Permanent Lok Adalat for Public Utility Services, Hyderabad, India

Lok Adalat (people’s courts), established by the government, settles dispute through conciliation and compromise. The First Lok Adalat was held in Chennai in 1986. Lok Adalat accepts the cases which could be settled by conciliation and compromise, and pending in the regular courts within their jurisdiction.

The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two other members, usually a lawyer and a social worker. There is no court fee. If the case is already filed in the regular court, the fee paid will be refunded if the dispute is settled at the Lok Adalat. The procedural laws, and the Evidence Act are not strictly followed while assessing the merits of the claim by the Lok Adalat.

Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal process. No appeal lies against the order of the Lok Adalat.

Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat as the scope for compromise through an approach of give and take is high in these cases.

Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost.

Pakistan

The relevant laws (or particular provisions) dealing with the ADR are summarised as under:

1. S.89-A of the Civil Procedure Code, 1908 (as amended in 2002) read with Order X Rule 1-A (deals with alternative dispute resolution methods). 2. The Small Claims and Minor Offences Courts Ordinance, 2002. 3. Sections 102–106 of the Local Government Ordinance, 2001. 4. Sections 10 and 12 of the Family Courts Act, 1964. 5. Chapter XXII of the Code of Criminal Procedure, 1898 (summary trial provisions). 6. The Arbitration Act, 1940. 7. Articles 153–154 of the Constitution of Pakistan, 1973 (Council of Common Interest) 8. Article 156 of the Constitution of Pakistan, 1973 (National Economic Council) 9. Article 160 of the Constitution of Pakistan, 1973 (National Finance Commission) 10.Article 184 of the Constitution of Pakistan, 1973 (Original Jurisdiction when federal or provincial governments are at dispute with one another)

ADR in the US Navy

SECNAVINST 5800.13A established the DON ADR Program Office with the following missions:

Coordinate ADR policy and initiatives;
Assist activities in securing or creating cost effective ADR techniques or local programs;
Promote the use of ADR, and provide training in negotiation and ADR methods;
Serve as legal counsel for in-house neutrals used on ADR matters; and,
For matters that do not use in-house neutrals, the program assists DON attorneys and other representatives concerning issues in controversy that are amenable to using ADR.

The ADR Office also serves as the point of contact for questions regarding the use of ADR. The Assistant General Counsel (ADR) serves as the “Dispute Resolution Specialist” for the DON, as required by the Administrative Dispute Resolution Act of 1996. Members of the office represent the DON’s interests on a variety of DoD and interagency working groups that promote the use of ADR within the Federal Government.

Additional resources

CRINFO.org

Established with a grant from the Hewlett Foundation, this is a central repository for ADR information.

Very searchable[6].

Related web resources are:

http://www.mediate.com/ http://adrr.com/ http://www.acrnet.org/

Cornell University's Scheinman Institute on Conflict Resolution

Cornell's ILR School has joined forces with Cornell's Law School to present the country's most comprehensive conflict resolution program focusing on workplace alternative dispute resolution (ADR). The Martin and Laurie Scheinman Institute on Conflict Resolution mission is to educate the next generation of neutrals – arbitrators, mediators and facilitators – who can help resolve disputes between employers and employees, both unionized and non-unionized. The Institute provides training for undergraduate and graduate students, consultation and evaluation, and conducts research. It also offers courses in two- to five-day sessions designed for professionals who are interested in or practicing in the workplace dispute resolution field. These highly intensive and participatory courses are coordinated by Cornell ILR faculty and are held in the ILR School's conference center in Manhattan and on the Ithaca campus. Participants can earn two certificates, Workplace Alternative Dispute Resolution and Conflict Management and Labor Arbitration.

Fordham Law School's Dispute Resolution Program

Fordham Law School’s Dispute Resolution program placed in the top 10 of U.S. News and World Report's 2008 rankings of the best Dispute Resolution programs in the nation, according to the recently-released rankings. Along with Fordham's Clinical Training program, the Dispute Resolution program is the top-ranked specialty program at Fordham Law School. The Alternative Dispute Resolution program at Fordham combines an integrated agenda of teaching, scholarship, and practice in conflict resolution within the national and international communities. In addition to the classroom and clinical experience, the law school's student-run Dispute Resolution Society competes in ABA-sponsored interschool competitions as well as international mediation and arbitration competitions. In 2008 the Society's teams won the ABA Regional Negotiation Competition, placed third overall in the International Chamber of Commerce Commercial Mediation Competition in Paris, and reached the semifinals of the Willem C. Vis (East) International Commercial Arbitration Competition in Hong Kong. Additionally, Fordham's Dispute Resolution Society hosts an annual symposium on current Dispute Resolution topics and also teaches a class on dispute resolution skills to seniors at the Martin Luther King, Jr. High School in New York City.

Straus Institute for Dispute Resolution

Pepperdine University School of Law’s Straus Institute for Dispute Resolution^[7] provides professional training and academic programs in dispute resolution including a Certificate, Masters in Dispute Resolution (MDR) and Masters of Law in Dispute Resolution (LLM). Straus provides education to law and graduate students, as well as mid-career professionals in areas of mediation, negotiation, arbitration, international dispute resolution and peacemaking.^[8] The Straus Institute has consistently ranked the number one Dispute Resolution school in the nation for the past 5 years, and has remained among the top 10 schools over the last decade.^[9]

Harvard Program on Negotiation

"The [Harvard] Program on Negotiation (PON) is a university consortium dedicated to developing the theory and practice of negotiation and dispute resolution. As a community of scholars and practitioners, PON serves a unique role in the world negotiation community. Founded in 1983 as a special research project at Harvard Law School, PON includes faculty, students, and staff from Harvard University, Massachusetts Institute of Technology and Tufts University."^[10] Harvard currently offers 12 week courses on negotiation and mediation for participants from all disciplines and professions as well as weekend seminars taught by their professors. The Harvard PON program is currently ranked #3 falling from #2 last year according to the US World and News Report, and has also remained among the top 10 schools over the last decade.^[11]

CUNY Dispute Resolution Consortium

The City University of New York Dispute Resolution Consortium (CUNY DRC) serves as an intellectual home to dispute-resolution faculty, staff and students at the City University of New York and to the diverse dispute-resolution community in New York City. At the United States' largest urban university system, the CUNY DRC has become a focal point for furthering academic and applied conflict resolution work in one of the world's most diverse cities. The CUNY DRC conducts research and innovative program development, has co-organized countless conferences, sponsored training programs, resolved a wide range of intractable conflicts, published research working papers and a newsletter. It also maintains an extensive database of those interested in dispute resolution in New York City, a website with resources for dispute resolvers in New York City and since 9/11, the CUNY DRC assumed a leadership role for dispute-resolvers in New York City by establishing an extensive electronic mailing list, sponsoring monthly breakfast meetings, conducting research on responses to catastrophes, and managing a public awareness initiative to further the work of dispute resolvers.

CPR Institute for Dispute Resolution

The International Institute for Conflict Prevention and Resolution, known as the CPR Institute, is a New York City membership-based nonprofit organization that promotes excellence and innovation in public and private dispute resolution, serving as a primary multinational resource for avoidance, management, and resolution of business-related disputes.

The CPR Institute was founded in 1979 as the Center for Public Resources by a coalition of leading corporate general counsel dedicated to identifying and applying appropriate alternative solutions to business disputes, thereby mitigating the extraordinary costs of lengthy court trials.

CPR’s mission is “to spearhead innovation and promote excellence in public and private dispute resolution, and to serve as a primary multinational resource for avoidance, management and resolution of business-related and other disputes.”^[12] CPR is a nonprofit educational corporation existing under the New York state laws, and is tax exempt pursuant to Section 501(c)(3) of the U.S. Internal Revenue Code.

It is governed by a board of directors, and its priorities and policies are guided in large part by consultation with an executive advisory committee. Its funding derives in principal part from the annual contributions of its member organizations, and from its mission-related programming. The various operations and activities that fulfill the Institute’s mission are captured in the acronym of its name:

C: CPR convenes legal and business leadership to develop, and encourage the exchange of, best practices in avoiding, managing and resolving disputes.

P: CPR publishes its own work and that of other like-minded organizations, making resources available to a global community of problem-solvers.

R: CPR helps to resolve complex disputes among sophisticated parties, by devising rules, protocols and best practices, and by providing disputants with resources and consulting expertise in selecting appropriate methods and neutrals to assist in the dispute resolution process.

ICAR

Established at George Mason as an alternative to a sociology program due to Virginia's then policy against duplicating graduate schools, it was the nation's first major dispute resolution graduate program. It has been a major success.^{[citation needed]}

http://icar.gmu.edu/ is the Institute for Conflict Analysis and Resolution's web site. It now features an undergraduate program.

References

^ [1]
^ Taken with permission from a presentation by Stephen R. Marsh of http://adrr.com/
^ [2]
^ [3]
^ http://www.allaboutlaw.co.uk/index.php/pre-uni/areas-of-law/alternative-dispute-resolution/ - AllAboutLaw.co.uk - Alternative Dispute Resolution profile
^ http://www.allaboutlaw.co.uk/index.php/pre-uni/areas-of-law/alternative-dispute-resolution/ AllAboutLaw.co.uk - Alternative Dispure Resolution profile
^ http://law.pepperdine.edu/straus/
^ [4]
^ http://grad-schools.usnews.rankingsandreviews.com/grad/law/dispute
^ http://www.pon.harvard.edu/about/
^ http://grad-schools.usnews.rankingsandreviews.com/best-graduate-schools/top-law-schools/dispute-resolution
^ [5]

Lynch, J. "ADR and Beyond: A Systems Approach to Conflict Management",

Negotiation Journal, Volume 17, Number 3, July 2001, Volume, p. 213.

Sustac, Zeno, Ignat, Claudiu. “Alternative ways of solving conflicts (ADR)”,

Publisher: University, p. 242.

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