Alternative Dispute Resolution: Types, Advantages and Disadvantages

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Table of Contents

Introduction
Types of Alternative dispute resolution
Scot vs. Avery clause
Advantages of alternative dispute resolution to a small business
Disadvantages of alternative dispute resolution
Conclusion
Reference list

Introduction

Alternative dispute resolution (ADR) known in some countries as external dispute resolution is the process that entails resolving disagreement outside the confines of the ordinary judicial system (Justus 1999, 12). These processes have been encouraged in recent times since they are generally cheaper and less time-consuming compared to the traditional court process. This paper seeks to define ADR; types of ADR; the Scott vs. Avery clause; the advantages and disadvantages of ADR.

Types of Alternative dispute resolution

There are three types of alternative dispute resolution techniques they include; Mediation, Arbitration, Collaborative law.

Mediation

In this technique an independent mediator works with the parties to come to a resolution ’’(Masden 2005,6). A mediator is a person who is trained to help dispute parties to come to a fair agreement, he/she must be of a character that is respectable by the parties. Mediators bear no powers to force an agreement on the parties. Upon reaching a fair deal “the parties will sign a legally enforceable mediation agreement to which they each agree to abide ’’ (Sizzler 2010, 242).If by chance the parties don’t come to a fair deal they “take their dispute to court’’.

Arbitration

Ideally it is a voluntary technique and people often agree on an arbitration process prior to the occurrence of a dispute. In arbitrations “the parties agree to have their case heard by an impartial person, the arbitrator, who issues a final and binding decision’’ (Carlton 2003, 200).Nowadays it is a requirement for some type of formal contract to have an arbitrator to resolve conflicts that may arise during the life of the contract.

Collaborative law

This is often used as an alternative to a legal divorce process. The couple agrees “to behave courteously and have their attorneys and outside consultants help them along the way’’ (Ray 1985, 5). It is unique in that unlike mediation and arbitration, there is no third party. The couple is helped to agree on issues such as children’s custody, division of property, and children’s visitation rights.

Scot vs. Avery clause

This is another name for the arbitration technique of dispute resolution; this name was adopted from the British case of Alexander Scott and George Avery who disagreed on a clause on their contract known as arbitration where they had agreed that an arbitrator would resolve any conflicts arising from their contract (Renoxs 2009, 135). Some of the judges in the case thought that the clause was an attempt to run away from the legal system (Alflexs 2009, 136). From the ruling in that case a “Scott v Avery clause’’ therefore is “an express and clear provision in a contract that refers any dispute to arbitration before any court action can be started” (Yart 1998, 3). An “award’’ is a decision made, written and signed by the arbitrator (Mars 2006, 6). It is final and binding to the parties.

Advantages of alternative dispute resolution to a small business

Efficacy

This is achieved by conflicts being resolved quickly and a good business relationship before the conflict is not injured (Jary 2007, 6). Since “time is money”, to a small business this mean means that there is no loss of revenue.

Costs

Court litigation processes are associated with high costs in legal fees that may not be sustainable to a small and growing business (Alfradol 2004, 45). Arbitration is a cheaper and more affordable alternative to the formal litigation process.

Privacy and confidentiality

An arbitration process ensures that the matter causing conflict between the parties is kept private away from the public (Toscnich 2006, 6). Crucial information is not leaked to competitors and the good image of the business is maintained.

Enforcement of the Award

The enforcement of an award is done in a manner that does not hurt the running of the business since a suitable timeframe is agreed upon. (Gabriel 2009, 34)

Disadvantages of alternative dispute resolution

Court rules are not observed

Since court rule is not strictly observed, the evidence produced cannot hold water and may be based on hearsay hence the judgment may not be fair to both parties.(Lynch 2004,213)

Precedents

Legal precedents are judgments made on previous similar cases; these are not observed since the hearings are not public. (Theodore 2005, 45) This means that the outcome of the process cannot be predicted by the parties.

Unfair awards

The general rules of natural justice are observed in alternative dispute resolution procedures, these leave room for the arbitrator to be biased when giving an award (Salama 1983, 45). Unfair awards can also result from the incompetence of the arbitrator; this can be avoided by stating the qualifications of a favorable arbitrator in the contract. (Evans 2006, 89)

Some cases cannot be arbitrated

Some countries limit the subject matter of cases that can be resolved using techniques alternative dispute resolution; these matters include criminal and intellectual property rights (George 2006, 45). Arbitration on some aspects of these cases is subject to approval by the court (Justus 2006, 56). Cases on Patent infringements upon completion of the arbitration process must be validated by a court of law. (Dogo 2001, 56)

Conclusion

Alternative dispute resolution techniques are the most efficient means of resolving conflicts since they are cheaper, flexible, less complex, and help retain the good relationship cultivated between the parties.

Reference list

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Salama, Auerbach. “Justice Without Law?” Non-Legal Dispute Settlement in American History.London: Oxford University Press. 1983.

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