What are the four ways to settle a dispute out of court?

Answer 1

intro: Alternative Dispute Resolution (ADR) is the name given to the process where parties in a dispute come to a compromise (or settle their dispute) without going to court.

The main reason people use ADR is to save the expense of using the courts and solicitors.

There are 4 main forms of alternative dispute resolution (ADR)

arbitration, mediation, negociation and conciliation(AMNC)

Arbitration - Arbitration is the most formal of the methods used to settle disputes without using the courts. Arbitration is where the parties with a disagreement pass their dispute to a third party, who will make a judgment on their behalf. This judgment will then be legally binding on the parties.

The relevant law on arbitration can be found in the Arbitration Act 1996.

The agreement to go to arbitration can be made by the parties at any time. It can be written into a business contract by what is called a Scott v Avery clause or the parties may just agree on arbitration when a dispute arises.

The parties can agree the number of arbitrators who will hear their dispute. It could be three, two or just one person. The parties will normally appoint someone who is an expert in their particular area of business. There is also the Institute of Arbitrators who will provide trained arbitrators to parties who wish to settle a dispute.

The actual procedure to be followed in any arbitration hearing is left to the parties to decide. Therefore, arbitration hearings can take many forms. The parties can decide on a paper arbitration, which means the parties submit everything to the arbitrator in writing, who will then read everything and make a decision. However the parties can also have a hearing at which they appear and give evidence and witnesses may be called.

The decision made by the arbitrator is called an award and is legally binding on the parties.

Mediation - This is where a neutral person (the mediator) helps the parties to reach a compromise. The job of the mediator is to consult with each party and see how much common ground there is between them. S/he should act as a facilitator, taking offers between the parties. The mediator doesn't offer an opinion. Mediation is most suitable where there is some chance that the parties will co-operate. Mediation is not legally binding on the parties.

Mediation Services

There are a number of organisations that offer mediation services. One of the main ones is the Centre for Dispute Resolution Many companies use their mediation services to save £1,000s in legal fees. The only disadvantage of using mediation to settle a dispute is there is no guarantee that a settlement will be reached. This means that you still have to use the courts, so in effect failure at the mediation stage can result in extra delays and extra costs.

However, the Centre for Dispute Resolution report that around 80% of the disputes they deal with are settled without the need for any court action.

There are now many mediation services offered on-line such as The Mediation Room and Mediate

Negociation - This type of method of solving a dispute without having to go to court is the most basic. To solve a case, both parties must simply meet each other somewhere and 'negociate' the matter. If this is not possible by the parties then a solocitor may negociate on their behalf. If the dispute is still not solved and court proceedings start, then the solicitor may still negociate on their behalf. This results in many cases settled out of court.

Conciliation - This is similar to mediation where a neutral third party helps the parties to resolve their dispute; however, the conciliator plays a more active role in the process. S/he will be expected to suggest ways in which a compromise could be reached. Conciliation is not legally binding on the parties.

Conciliation Services

The Advisory, Conciliation and Arbitration Service (ACAS) is used by many employers and Trade Unions to settle disputes before (and sometimes during) industrial action takes place.

ACAS offers conciliation to both sides in unfair dismissal claims before the claim can be taken to an Employment Tribunal. Around 60% of unfair dismissal claims are settled without the need for a hearing at an Employment Tribunal.