ALTERNATIVE DISPUTE RESOLUTION (ADR)

Mediation or Arbitration?

Conflict is normal. It is usual for people to have opposing views, interests, values and needs. Individuals live with conflict every day. It is only detrimental if it ends in dispute.  However, if not resolved efficiently and effectively disputes can be harmful to personal and business relationships as well as to the health of those involved.
 
Disputes should not be discounted as they cause real damage and can bring people's lives and businesses to a standstill. They should be resolved appropriately and effectively with the help of a qualified professional.

In many circumstances alternative dispute resolution turns the outcome of conflict into a positive, especially if it is dealt with in a constructive manner. For example, alternative dispute resolution, (mediation or arbitration), can bring different perspectives out into the open and lead those involved to deal with issues together and clear the air.

If you have a disagreement you are not without help. The key is to deal with the problem quickly and to resolve it successfully through an accredited professional.

Mediation

Mediation is becoming increasingly popular as a means of resolving disputes of all kinds. Even after court proceedings have started, the Courts will encourage the parties to attempt mediation if at all possible.

In practical terms, mediation is an exercise under which the parties meet to endeavour to resolve their differences under the supervision of a trained facilitator called a mediator whose job it is to explore common ground and to endeavour to guide the parties towards a settlement.
In a typical mediation, the parties meet in a conference room on neutral premises.

The meeting may be preceded by the exchange of “position statements” with each party putting its case to the other although this is not compulsory and is positively discouraged in the case of small-value disputes. At the initial meeting, however, each party will verbally state their position. The parties then depart to separate rooms and the mediator travels back and forth discussing each party’s case and conveying such information and offers to the other party as he/she may be authorised to do. In the event of a successful conclusion, a memorandum of agreement is signed by the parties and can be enforced through the courts if necessary. If the mediation is not successful, this cannot be held against either party and no detail of the discussions is permitted to be given to anyone including the Court.

The advantage of mediation is its speed and flexibility and, obviously in the event of the parties reaching agreement, a saving in time, effort and importantly expense.

Disadvantages include:

• The necessity for both parties to be disposed towards settlement before they start.
• The mediator has no power to make rulings or to order anyone to do anything.
• Also, there is usually little point in undergoing mediation where the case involves a substantial dispute of fact.
• Failure by a party to carry out what he agreed to do, or to pay an agreed sum of money, may have to form the subject of separate proceedings with consequent time and expense.

Despite this, mediation is becoming increasingly popular as a means of resolving disputes, particularly in matters of small value where the County Courts offer mediation services free of charge. Many trade and consumer organisations such as NHBC offer mediation or arbitration services to members of the public who find themselves in dispute with suppliers or tradesmen

Arbitration

Arbitration means the hiring of a professional judge to decide disputes. Many commercial agreements include an arbitration clause making it compulsory to refer disputes to arbitration. The arbitrator is often legally qualified but may equally well have some other form of specialist expertise e.g. a surveyor.

Selection of a suitable arbitrator can be by agreement but most arbitration clauses include a provision allowing the parties to apply, for example, to the President of either the Law Society or Royal Institute of Chartered Surveyors to make the appointment from a panel, (for which a fee will be charged).

Once appointed, the arbitrator has the power of a judge and can make rulings, allow or disallow or strike out claims and award costs.

The ruling of an arbitrator has the force of law and can be enforced through the courts.  This is a considerable advantage over mediation.

Other advantages include speed and flexibility – arbitrators can make rulings in minutes (e.g. by email or telephone) which might take several weeks or months using traditional court proceedings, and can do so in the evenings and at weekends and travel to site.

The arbitrator has power to obtain advice himself from barristers or experts, without seeking the parties’ permission. Also the arbitrator being technically or legally qualified in the subject-matter of dispute can save everybody time.

These advantages tend to outweigh the principal disadvantage of expense, because the parties will be paying a professional hourly rate not only for their own representation but also for the arbitrator himself (payment of whose fees will be a condition of the publication of any award) and for the venue, all of which latter facilities are provided by the courts system either free of charge or within a fixed fee framework.

As a fellow of the Chartered Institute of Arbitrators since 1991, Jonathan Austin has conducted a number of commercial and property arbitrations, covering subjects as diverse as building development, inheritance under a will and packaging copyright.