Alternative Dispute Resolution (“ADR”) comes in various forms. Each ADR mechanism can be performed individually or tiered or escalated.
When we refer to ‘alternative’ we generally mean an alternative to litigation. Lord Phillips, former president of the Supreme Court of the United Kingdom and Lord Chief Justice of England and Wales, said:
- “Civil litigation is extremely expensive, and a sensible person would look in horror at the costs and risks involved”.
Negotiation (talk first – fight later)
It is always desirable for the parties to negotiate their way out of a dispute. An effective negotiation strategy is entirely dependent upon a detailed understanding, analysis and evaluation of a dispute.
Expert Determination
Expert determination is where a professional, as a third party neutral, makes a decision with respect to the outcome of the matters in a dispute referred to him/her. Each party submits their case to a mutually agreed expert who makes his decision with respect to the outcome of the dispute and such decision becomes a binding contract between the parties.
Mediation
Mediation is assisted negotiation. It is where an accredited mediator, as a neutral third party, facilitates the disputing parties to a dispute to identify common ground in order to obtain a settlement. Mediation is not adjudication. The mediator does not decide the issue. It is the parties’ dispute and it is the parties who settle their dispute.
This ADR mechanism offers parties involved in commercial disputes the opportunity to have their disputes resolved more quickly, effectively and privately than through litigation. It is a voluntary process whereby the parties can choose the terms of reference under dispute. It is applicable to disputes in the early stages of development, prior to the commencement of legal proceedings.
Approximately 80 percent of disputes that are referred to Commercial Mediation are successful and result in a mutually agreeable mediated settlement agreement. (After CEDR).
No dispute is too small or large for mediation. A Hale Legal team member has mediated a US$311 million international dispute and was on the team mediating and settling an armed conflict in civil war.
Adjudication
Adjudication is available to the Construction Industry. It is a 28-day process whereby an adjudicator is appointed to decide the issue in dispute between two or more parties. During the twenty-eight days from the time a party informs the opposing party that a dispute exists, and a referral notice is issued, an adjudicator is appointed and a hearing is convened. After the consideration of all evidence, the adjudicator determines the dispute or difference in his decision.
Arbitration
Arbitration can be domestic or international. We can concentrate on international arbitration here.
International arbitration is a process of dispute resolution in which a neutral party (arbitrator) renders a decision after a hearing at which both parties have an opportunity to be heard.
Where arbitration is voluntary, the disputing parties select the arbitrator who has the power to render a binding decision.”
An arrangement for taking and abiding by the judgment of selected persons in some disputed matter, instead of carrying it to established tribunals of justice, and is intended to avoid the formalities, the delay, the expense and vexation of ordinary litigation.
What is clear is that arbitration is an alternative to the national courts, which is selected and controlled by the parties.
It is in many respects similar to court proceedings. However, significant differences are that the parties to the dispute choose the arbitrators (in national courts the state appoints the judge), the venue, the applicable law, the language, and the procedural rules under which it will be conducted.
No party has to submit to the national court of the other party, (in fact, through treaty, a State forfeits its sovereign right to do so).
This is an obvious advantage where there may be a perceived or real national prejudice. National court judges are drawn from the local system and do not necessarily have the knowledge of international business or even disputes between parties from different countries.
Unless otherwise agreed by the parties, confidentiality is maintained throughout the proceedings. The existence, of the arbitration, the agreement, the subject matter, the evidence, the documentation, the entitlements, the obligations of the parties and the award are kept private and cannot be divulged to third parties.
In addition, confidentiality increases the chances for peaceful settlement.
The award will be enforced in any of the 172 contracting states of the international treaty. The relevant international treaties are the New York Convention on Recognition and Enforcement of Arbitral Awards 1958 and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (Washington Convention). The New York Convention sets the standard requirements for a successful commercial international arbitration process and subsequently the Washington Convention for Investor V State disputes.
The success of the Conventions are well established for nearly 70 years.
We at Hale legal have an experienced chartered international arbitrator on our team.
The team at Hale Legal understands that matters may arise where a solution is not immediately apparent. Understanding that litigation can be an expensive and stressful avenue, Hale Legal can assist parties to explore alternatives.
Early resolution of matters where parties have initially taken opposing viewpoints offers a real benefit, a definitive conclusion and a clear path forward.
In many ways, alternative dispute resolution is the commercially astute way forward as it allows for clarity without the uncertainty and cost of litigation.
It is however a reality that circumstances sometimes arise where alternative dispute resolution does not conclude the matter and parties proceed to litigation. In these instances, Hale Legal brings the full weight of our extensive experience and vigorously represents each client's interests until the matter is resolved.