Dispute resolution is changing. The continued evolution of alternative dispute resolution (ADR) methods has been a striking development. Companies no longer simply turn to litigation to resolve their disputes; instead, many opt for arbitration or mediation given their numerous advantages.

In general, ADR costs significantly less than pursuing litigation. It usually takes less time to reach a final resolution than cases which go to trial. Furthermore, in arbitration, parties have far more flexibility to choose what rules will be applied to their dispute, such as industry standards, domestic law, foreign law and a unique set of rules used by an arbitration service. The parties may even choose to adopt religious law in some cases, if applicable.

Confidentiality is another key feature of ADR. Parties can keep all discussions, the contents of any documents disclosed that will not be used as evidence and any information provided during the ADR process secret. Operating out of the public glare allows parties to engage in a full and frank discussion about the issues dividing them. They can reach a conclusion with neither side losing face or suffering reputational damage. Advocates believe the process promotes a positive and amicable outcome.

When parties opt to utilise ADR, they typically choose between arbitration and mediation. Both utilise neutral third parties who oversee the entire process. Both can offer feasible alternatives to traditional litigation – but they do have their shortcomings. Although mediation encourages parties to reach a collaborative agreement, there is always a chance they will arrive at an impasse. As for arbitration, the parties are at the mercy of a third party, or parties, who decide on a definite solution, which means the process can lose some of its lustre.

Oct-Dec 2016 issue

Richard Summerfield