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Alternative Dispute Resolution
Anyone with a dispute can try to resolve it by negotiating with them. This has the advantage of being completely
private and it has the advantage of being the quickest and cheapest method of resolving a dispute. It is possible for
a solicitor to negotiate on behalf of the client. This is reflected by the high number of cases that are settled out of
This is where a neutral mediator helps the parties to reach a compromise solution. The role of the mediator is to try
to find common ground between the parties. The mediator does not offer solutions or offer his/her views.
Mediation is only suitable where the parties want to cooperate. There are a number of commercial mediation
services. E.G The Centre Effective Dispute Resolution. The advantage is that a mediator can save on court costs
as an average mediator costs £1,200 per day in contrast to £3,000 per day for court costs. The centre claims to
resolve 80% of cases in this way. The disadvantage is, that the decisions are not binding and parties may end up
going to court for a final resolution. Mediation is usually teamed with conciliation and this is where the mediator is
more active and will suggest ways forward.
Formalised Settlement Conference This is a more formal method of approaching mediation. It involves a mini trial
where each side presents itself to a panel. Submissions are made to a neutral adviser, who will hear both sides
and try to come to an agreement..
The word arbitration is used to convey two quite different processes, the first is where the courts use an informal
procedure to hear cases. This usually occurs within small claims courts. The second meaning is where parties
agree to submit their claims to private arbitration. Private Arbitration is now governed by the Arbitration Act 1996.
Therefore, arbitration is a voluntary submission by the parties, to refer their dispute to another person
for resolution. The precise way in which the arbitration is carried out is left entirely to the parties. The Chartered
Institute of Arbitrators provides arbitration services for British Travel Agents (ABTA), British Telecom.
The agreement to go to arbitration can be made by the parties at any time. Many commercial contracts contain
what is known as a Scott V Avery clause which states that in the event of a dispute arising, the parties will
agree to allow their case to be heard by Arbitration.
The Arbitration Act 1996, states that the parties are free to agree on the numbers of arbitrators used. they may
choose to use a sole arbitrator or they may choose to have a panel of 2 or 3.
The Arbitration procedure
The Arbitration procedure is left to the discretion of the parties. Some parties will opt for what is known as a
`paper ` arbitration, this is where the evidence and arguments are written down and submitted to the arbitrator who
will then make a decision. Alternatively, the parties may choose to submit oral evidence. The decision made by an
arbitrator is called an award and it is binding on both the parties and can be enforced within a court if necessary.
The final decision is known as an award and this decision can be upheld by the courts.
Advantages of Arbitration
1) The parties may choose their own arbitrator. This means they can decide whether to have
the case heard by a technical specialist or a lawyer.
2) Expertise technical experts can be used as an arbitrator saving the need for expert
witnesses. Plus it saves time as technicalities do not need to be explained to a judge.
3) The hearing time and place can be arranged to suit the parties
4) The procedure used is flexible as the parties can choose which procedure to adopt. This
can result in a more relaxed hearing than a court.
5) The matter is dealt with in private so there is no publicity.
6) The dispute will be heard more quickly and is much cheaper than going to court.
7) The award is final and can be enforced through the courts.
1) An unexpected legal point may arise that may not be suited for a non lawyer arbitrator.
2) Fees for a professional arbitrator are expensive. Plus the more formal the hearing, the
3) The rights of appeal are limited.
4) They have been criticised for delays and this has caused them to lose popularity with