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Advantages and Disadvantages of Alternate Dispute Resolution
Previously, many people were unaware of any form of dispute resolution other than the traditional litigation and trial process in front of judge and jury. However, with an increasing number of contractual relationships coming into existence, the number of disputes has been on the rise and courts are now overburdened with cases and understaffed with judges. So, people, lawyers and even judges, have begun turning toward Alternate Dispute Resolution (ADR) to offer some solace and speedy justice to parties to a dispute who, usually, want to preserve the nature of their relationship. In ADR there is a third-party present who is neutral and facilitates a healthy discussion between the parties, thus enabling them to come to a mutually agreeable settlement. The role of this third party (mediator) in a mediation is to facilitate a discussion between the parties, in arbitration the third party (arbitrator) assesses the evidence and makes a binding decision, in conciliation the third party (conciliator) facilitates discussion and provides solutions to the parties, while in negotiation there is very rarely a third party as the parties discuss amongst themselves.
Being such a demanded form of dispute resolution, ADR must have some advantages over the traditional method of litigation and some of these are:
- The parties have the freedom to choose their own arbitrator, mediator or conciliator which means that they can select an expert who has experience in the field of the dispute rather than just someone who has technical and procedural know-how[1].
- In an arbitration process, the parties have more flexibility to choose the procedural and discovery rules that may apply to their dispute. This means that they can choose industry standards, domestic laws or even foreign laws to be governed by[2].
- Unlike civil law countries where cases are decided by a jury which can be partial, unpredictable, and emotionally inclined, the process of ADR does not involve a jury.
- ADR processes are cost-effective because there is no need to hire expert witnesses or attorneys and the process is quicker which reduces the time, thereby avoiding long-drawn litigation costs[3].
- The parties are highly involved and participative in ADR and they have the power to come to a settlement and make their own decisions.
- The results of the ADR process can be kept confidential if the parties so choose.
- Parties have an increased chance of preserving their business and social relationship.
However, even with all these advantages, there are certain disadvantages that follow the process of Alternate Dispute Resolution and a few of them are:
- With the exception of arbitration, where the arbitrator makes a binding decision, the ADR process may not always yield a resolution. This means that money and time could be invested in a process that does guaranteed resolution[4].
- The finality and binding nature of an arbitrator’s decision can sometimes be viewed as a disadvantage because it may not always please the parties and courts will often refuse to review it.
- The neutral party – arbitrator, mediator, conciliator, will charge a fee for their time and expertise and depending on their popularity, these fees may be substantial. A judge, on the other hand, charges no fee for his decision[5].
- An arbitration clause in a contract is usually binding and courts will not waive it unless both parties request for litigation.
- There is limited protection offered to the parties, especially with respect to discovery, as the common rules governing discovery in litigation do not apply[6].
- A mediator, conciliator or arbitrator can only resolve matters which are civil in nature or which concern money. So, they cannot make authoritative injunctive orders[7].
Clearly the advantages outweigh the disadvantages, but it is always important to consider them before deciding whether a conflict should be resolved in court or through methods of alternate dispute resolution.
[1] Mark Albright, The Advantages and Disadvantages of ADR, AlbrightStoddard, (Sep. 21, 2012, 2:54 PM), https://albrightstoddard.com/advantages-disadvantages-adr/.
[2] Id.
[3] Editor, Explain the Advantages and Disadvantages of Alternative Dispute Resolution, LawyersnJurists, (Apr. 9, 2020, 8:59 PM), https://www.lawyersnjurists.com/article/advantages-disadvantages-alternative-dispute-resolution/.
[4] Lorman Education, Advantages and Disadvantages of Alternative Dispute Resolution, LORMAN, (Apr. 16, 2018, 6:18 PM), https://www.lorman.com/resources/advantages-and-disadvantages-of-alternative-dispute-resolution-16190.
[5] William J. Piercy, Advantages and Disadvantages of Alternative Dispute Resolution Clauses, Mondaq, (Jun. 4, 2018, 4:24 PM), https://www.mondaq.com/unitedstates/arbitration-dispute-resolution/701232/the-advantages-and-disadvantages-of-alternative-dispute-resolution-clauses.
[6] Supra note 4.
[7] Supra note 1.
- Alternate Dispute Resoltion
- Advantages
- Disadvantages
