ADR

ADR stands to Alternative Dispute Resolution, and the various methods that can be

adopted in resolving disputes. These include negotiation, conciliation, mediation, adjudication and arbitration.

Negotiation

Conciliation

Mediation

Adjudication

The Adjudication process is quite unlike anything that has taken place between disputing parties in commerce.

Existing Arbitration, Expert Determination, Conciliation and Mediation all require a consensual approach; both parties must agree to take their dispute to any one of those dispute processes. Not so Adjudication. Parliament now provides that each Construction Contract shall provide that any party may refer a dispute to Adjudication. The Adjudicator’s burden is to decide on the rights of the parties under the building contract and do so within the strict 28 day time frame. The "Decision" is binding forthwith. It can only be overturned, revised or confirmed in Arbitration (if the contract contains an Arbitration clause) or in Litigation. It has "temporary finality" and is an announcement by an independent referee as to the rights of the contracting parties.

What is the Procedure? ...

Arbitration

In general terms the process of Arbitration is an in-depth forensic investigation of a dispute. It is every bit as thorough as litigation. An Arbitration can take a long time and suffer all the expense of a court case. But that's not always true. Indeed the Arbitration Act 1996 provides a welcome opportunity to correct what had become a rigid and costly process. The key is in the hands of the Arbitrator. He can "tailor-make" the procedure. He can make it fit to the particular dispute. For example, certain issues can be dealt with via documents only. Alternatively he can jettison the adversarial process of Litigation (and much Arbitration) and conduct an investigative regime whereby the Arbitrator takes the initiative in establishing the facts and the law.

The Arbitrator's guiding light is simple, he must adopt cost effective procedures suitable for the case and above all be fair. In the time that this new Act has been in force in this country Arbitrators are seeing a marked step away from litigious procedures. The technical Arbitrator can use his professional knowledge to root out the evidence. The Lawyer Arbitrator can vigorously inquire of both parties similarly to root out the true position. There is some justification in suggesting that the quicker Arbitration distances itself from rigid litigious procedure, the better. It is all down to the Arbitrators to shift the emphasis.

Often the first step in the dispute process; whether it be due to time and money constraints, or simply a desire to maintain future working relationships with the party on the other side of the dispute. Negotiation can often be a quick and successful method of achieving your goals.

Mediation is quite unlike Arbitration or Litigation or Adjudication. Those latter three are almost always operated to decide legal rights, and impose a binding decision on the parties. But Mediation is non binding.  You can walk away at any time and go to a tribunal to get your rights. In construction disputes the difficulty has not been people walking away from Mediation. Rather the difficulty has been to get people to walk towards Mediation. The reason is that construction disputes often see one party quite happy to spin out the dispute process.

In an odd way the structured Mediation has rather got in the way of the British way of negotiating a settlement. Nowadays people expect a formal appointment of the "Neutral", then special presentations, then private meetings with the Neutral, then joint meetings. So people have to bring to the front of their mind the notion of ADR, and then agree to mediate. The trouble is that getting disputing parties to outwardly agree anything is difficult. Obstinacy is ordinary.

What is the procedure? Usually the appointment is joint. The choice of person is often by the ADR enterprise but the party most wishing to explore settlement by Mediation should be perfectly happy for the other side to choose the Mediator. The person need not be independent. He is not a Judge or Arbitrator or Adjudicator he is merely a facilitator. Pre meeting it is usual for each party to explain the problem in writing. It is ordinary to meet with lawyers present or a third party representative. Their job is to orally explain the client’s point of view. The Mediator encourages the parties not to hide behind the representatives. They too are invited to have their say. Now the two parties divide into separate rooms. The Mediator begins his shuttle-diplomacy. He is seeking to identify a range of imaginative solutions. Business relationships may have suffered between the two organisations  because of the dispute, can they be repaired? Can the repair look to the future as part of the remedy in the dispute? The remedies available are far wider than legal remedies available to a tribunal. Gradually he tries to establish movement.  "Are we getting somewhere?" is the simple question in each private meeting.

The process may take a day or two or more. It really does work. Those of us who have taken part in these structured discussions with well trained Mediators are always impressed.

The Courts are becoming much more open about the usefulness of exploring every possible avenue for settlement before getting to trial. Do not be put off asking the opponent to mediate the dispute ..... it is probably your duty to do so. It is no longer a sign of weakness, nor lack of resolve.

Conciliation is a process similar to Mediation whereby the Conciliator seeks to facilitate a settlement between the parties. Conciliation is regularly used in Ireland.  Under industry defined procedures for Conciliation, the Conciliator is obliged to issue a recommendation for the resolution of the dispute if the parties fail to reach settlement.

Conciliation usually arises out of a clause in a construction contract whereby the parties agree to attempt to resolve their dispute through Conciliation. The clause provides for the Conciliator being appointed by the agreement of the parties or by a specific institution.

The normal procedure is for opening statements to be delivered within a short period of the appointment of the Conciliator. A hearing usually takes place for the purpose of concluding the Conciliation shortly after these opening statements are delivered.

The Conciliator will attempt to facilitate a settlement between the parties. If this cannot be achieved he will publish a recommendation setting out the basis on which he believes the dispute should be resolved.

The benefit of Conciliation is that the process is resolved relatively quickly, usually between six weeks and twelve weeks.

If the parties reach settlement, that settlement is reduced to writing and signed on behalf of the parties. It then becomes final and binding.

The benefits to Adjudication is that a dispute can be resolved in a relatively quick way. The Decision of the Adjudicator is (temporarily) binding. There is no appeal against a valid Adjudicator’s Decision. A valid Adjudicator’s Decision can be rapidly enforced through the courts, if the party refuses to pay.

Because it is a short process, costs in Adjudication are normally relatively low, when compared with Arbitration or Litigation. Normally a party is responsible for its own costs in an Adjudication irrespective of whether it wins or loses. Usually an Adjudicator has the discretion to apportion his own fees and expenses between the parties as he sees fit. Most Adjudicators apply the principle that ‘costs follow the event’, that is, the losing party is responsible for a greater proportion or all of the Adjudicator’s fees and expenses

• A dispute is referred by a party to another party by way of a Notice of Adjudication.

• An Adjudicator is then appointed either by agreement between the parties or by an Adjudicator Nominating Body.

• The dispute is referred to the Adjudicator (and to the other party) by way of a Referral Notice. The Referral Notice is normally required to be submitted no later than 7 days after the date of the Notice of Adjudication.

• Upon receipt of the Referral Notice, the Adjudicator sets the timetable for the Adjudication. This may be in line with any agreed Adjudication Rules, or may be at the Adjudicator’s discretion. The timetable will usually allow for a Response to the Referral and will often allow for further submissions by way of a Reply to the Response, a Rejoinder to the Reply, and so on.

• An Adjudication meeting is sometimes held, but it is often the case that an Adjudication proceeds without a meeting at all.

• The Adjudicator is required to decide the dispute within 28 days (or such other longer period agreed by the Referring party or the parties) of the date of receipt by him of the Referral Notice.