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Essay: ADR – Alternative Dispute Resolution

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  • ADR - Alternative Dispute Resolution
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1) INTRODUCTION

As the world is getting globalised and society is getting modernised there is increase in complexity. Due to which there is escalation in litigiousness which effect states system of justice and implementation of the principle of access to justice for citizen. State by using different tools tries to solve the problem arising from reality by framing regulations, passing law in attempt to deliver justice in quicker way.

Unfortunately all states tools and measures are not fully successful in rendering justice. The judiciary seems increasingly incapable of giving a valid response to the continuously growing number of disputes lodged before them, disputes of different nature and difficulty which deserve a quick, sound, affordable and in many cases required specialised response; delayed justice implies in too many cases absence of justice.
Citizens have tired long to surmount this situation in different ways. Hence explored possibility of referring their disputes to non-judicial means of dispute resolution: the so-called ADR device. Arbitration, mediation, conciliation or negotiation are all embodied within this movement. Use, process of ADR is different from one country to another in order to ensure justice is delivered to citizen as its their fundamental right there is correlative increase in ADR device. Arbitration and mediation are most commonly used tool which is gaining popularity. State system i.e. courts enjoy monopoly as single provider of justice service for citizen which seems to be coming to an end. But at the same time it is still at growing edge not considered as alternative to state court system.
ADR and state courts are two different realities that actually interact only when it is necessary to ensure citizen to gain redress. Parties are free to choose which procedure they want to refer to solve their dispute. ADR as a new horizon here acts a device which can be easily adapted to their needs. Parties should be well aware of existence of this alternatives to make this operative, of what ADR means, implies and supposes for them.
The fundamental purpose of this paper is to present an outline of prominence, role of ADR in globalising world. Question here arises are why it should be prioritized over litigation. How its heuristic approach helps market to curb impasse resolution. How it is efficaciously helping parties to reach amicable settlement. It is an informal procedure helps community to maintain harmony. Hence ADR is a more preferred means of dispute resolution in fields such as family issues, consumer rights, commercial, Industrial disputes etc. Paper intends to give the reader broader perspective as to whether the ADR mechanism is gaining disciplinary status in a globalizing world.

2) ROLE OF ADR MECHANISM IN A GLOBALISING WORLD

The rise in international trade law, continental trading blocs, WTO between the countries there is rise in number of disputes which restricts globalization which give rise to legal complexity. As in global perspective the dispute arises between the countries it’s difficult to determine which country jurisdiction has precedence over which in settling a matter by following ADR mechanism there can be widespread use to parties.

ADR first originated in USA as an alternative to legal traditional system. In the 19th century to solve the conflict between labor and management arbitration and mediation was followed, later used for bargaining disputes. Even the mediation boards were established. Later conciliation was also used with other mechanism to solve various kind of disputes. Only small number of lawyers were practicing ADR. ‘In 1989 in Britain first British based ADR company- IDR Europe Ltd-bought the idea across the Atlantic and opened its doors for business. This was the start of ADR groups, organisation including CEDR (Centre for Dispute Resolution) which helped in development and promotion of ADR in the UK . Mainly it was followed to save time, cost and having the control of dispute with disputants.

The 1960’s where in the U.S rights movement was started for civil, consumer, environmental rights, minority, women’s rights and more courts were used as medium to achieve those rights. Even though many cases were called as ‘garbage cases’. They wanted to remove such cases from the courts. Over a period of 3 decades, the efforts to control movement of rights to justice and efficiency, and there is econcomitant shift from access to courts to ADR. This counteraction movement itself was publicly articulated by the chief justice of the US Supreme court, Warren Burger.

ADR is a formal justice. It carries its own value. It is an effort that supposedly promotes win/ win solutions, there is amicable settlement comprise rather than win/ lose, which reduces the pressure to the court system. ADR is often mandated or binding, hidden from public view, and disallowing of appeal to Courts in cases involving work, health, consumers contracts and more. Many countries are ercoginsing national ADR policies. What happens when a law reform movement seemingly unfractured by power differences goes international? This can be solved by negotiation process where ICJ is promoted as the apex forum for settling disputes by means of arbitration or adjudication.

For more powerful nations the process of world court system became less useful. So the new process like mediation or negotiations got promoted with new standards, they use phrases like ‘mutual learning’, ‘information sharing’, ‘harmonizing’ and ‘cooperation’ become common. Not only in developed nation, even in developing nations there is spread of ADR program. System proliferates for improving lives of citizens and meet the societal goals.

Now a days government, organisations, corporation use ADR to solve from small to big disputes of any nature in many countries in the world. ADR process is classified into two categories i.,e court-annexed options which includes mediation and conciliation where third neutral party assists disputants to come to amicable settlement and other one is community based dispute resolution mechanism where it includes formal court system . India embraced Lok Adalat which is considered as people’s court along with ADR mechanism. ADR also
include commercial arbitration, where disputes arise due to international trade, business, are solved. Many countries have passed implementing ADR mechanism in their nations based on UNCIRAL model laws.

‘In 1999, Americans are increasingly losing the right to Sue in civil litigation as they are blocked by mandatory mediation in domestic relations, in health centres and in the workplace.
Chief Justice Burger had argued that “civilized” Americans had to abandon the centrality of the adversary model for ADR in spite of general findings that, in cases of grossly unequal power-cases that are part of the public’ At a June 1997 Judicial Conference in Washington, D.C., a distinguished panel on ADR record-adversarial methods are the more judicious means of dispute management. And adjudication conceded that ADR yielded little improvement in legal reform. However, a chief litigator from Coca-Cola concluded in his closing panel comment that ADR may have its most golden opportunities in the international arena’.
‘Purely private disputes have increasingly resulted in collective or even social disputes, class actions or disputes involving parties deserving different degrees of protection from the State. From disputes among people present we now more and more face disputes involving people and enterprises that have never before seen each other and that in many cases refer to relationships entered to by way of electronic devices. From disputes involving citizens pertaining to the same State courts now it is usual to tackle disputes growingly affecting citizens, goods or services having different origins or destination. The object of these disputes have also changed, conflicts involving tangibles have now given place to disputes growingly affecting services, intangible assets and rights of all kind. The response of the State to this challenge has usually been twofold. On the one hand it has broadened the legal system in order to cope with new realities and provide them with legal answers. This has fuelled the growing juridisdictionalisation of life. The law and the legislator aim to cover all aspects of society and social life.

3) PRIORITIZATION OF ADR OVER LITIGATION

ADR operates without formal representation. It adopts doctrine of equity where there is direct participation and communication of parties which each other. It also include higher degree of flexibility and informality which makes ADR system popular and effective. It support the reform in the judicial system by discrediting the court procedure. It provides justice for even disadvantaged group, weaker section of the society. It reduces delay and cost for resolving the disputes which provide satisfaction to the disputants.
In Europe, for instance, recent figures speak of three main reasons for not using a court to resolve a disagreement/dispute: ‘its cost (45%), its duration (27%) and the fear that nothing would come of it (27%)’. It is treated as superior to a formal litigation of court system.

Generally faster and less expensive when compared to traditional legal system. It is a process which is designed and defined by the disputants with the help of third party. ADR mechanism based on an integrative approach. It is more co-operative and less competitive. Outcome of ADR is easy to comply with, as it is voluntary mode. It encourages comprise which is good for maintaining-harmonious relationship between the parties.

General Indications for ADR vs. Formal Litigation in Court

There are certain general indicators that make disputes more likely to benefit from ADR as opposed to formal litigation through the courts.
ADR is generally indicated/suitable when:

  • The parties are willing to negotiate and share a mutual future interest.
  • The legal framework does not provide a final solution or a commercially tailored, resilient resolution of the conflict.
  • A relationship must be preserved or a long-term relationship (involving family, neighbors, business associates, a partnership, a lengthy contract) needs to be carefully terminated.
  • Multiple proceedings or conflicts exist between the same parties.
  • The case requires confidentiality or a need for separate discussion.
  • More parties are stakeholders to the conflict than process parties alone.
  • There is a need to limit costs.
  • There is a desire for a less formal process.
  • Quick resolution to the dispute is desired.

There are arrears of pending cases, repeated adjournments by courts. ADR as emerged as alterative means for litigation. This situation many lead to total failure of administration of justice, as ‘justice delayed, is justice denied’. Due to need and crumbling in administration of justice ADR is acceptable. As whole administration of justice lacks judicial officers, staffs and suitable infrastructure to deal with the backlog cases, which is being stretched one decade to next decade without seeing the light of DAY as to final decision in the case. Even sluggish government machinery and concentration of litigant’s components force to innovate and design ADR programme for purpose of settlement of dispute.

3) HEURISTIC APPROACH OF ADR

Ancient wisdom notes ‘a season for all things’. ADR’s time has come-even overdue some would argue. It is emerging as an effective tool to resolve the disputes. In the present scenario there is rapid rise in the commercial/ civil activities and transactions in the era of globalisation there is alarmingly increase in disputes. Hence there was need of heuristic approach as taking such disputes to regular court proceedings is an ‘Herculean Feet’ in present legal system, it is mentioned that about 2.5 crores cases in trail courts, 50 lakhs cases in the high courts and about 50 thousand cases in the Supreme court, are pending and awaiting its adjudication. Sometimes it is noticed that third/fourth generation of the original litigants are contesting the cases at present sued by their ancestor.
Now most of the contractual agreements contain arbitration, negotiation clauses therein and in case of dispute arising out of such relationship may be effectively and adversely resolved by adopting ADR system and through its various components. It is a voluntary process where parties are free to opt ADR process. Most commonly used forms of ADR in U.K are arbitration and mediation but even adjudication is also rapidly becoming popular in some quarters. But ADR is not available for criminal cases which are dealt with by and on behalf of the state before the criminal courts. Public law disputes between individuals and the state.
The delivery of ADR service take place by using different process, models and by various set of legal and procedural rules. It covers broad spectrum of process as it is informal proceeding conducted in structured manner by a neutral third party when compared to formal court proceeding. There are different types of ADR which have their own drawbacks and advantages such as dispute resolution board, ombudsman process.

The ADR process can be classified into three types:
1. Adjudication-based processes
2. Recommendation-based processes and
3. Facilitation-based processes, such as mediation, arbitration.

While the dispute is being conducted by facilitator, parties are invited and made sure that they provide all information and input which help them to come to agreement, parties enter into process of consensus building. The process should be flexible where parties confidence is gained. Even needs, circumstances, changes can be enabled and incorporated into the process by the parties. The process should allow for diverse values, interests and needs which party accepts and respects. The party should provide proper information, resources. The process should be such that techniques, methods which are followed should assist in resolving parties’ differences.

4) ADR HELPING MARKET TO CURB IMPASSE RESOLUTIONS

ADR is viewed as a business-based solution, operated in and by private sector, for the benefits of the disputants. However business is also getting benefitted by this reform. Its access is faster and cheaper access to disputes. So it is considered as business-support initiatives in a wide range of ways and contexts. As having an agenda it focuses on enhancing the effectiveness of a business sector, reducing costs, improving business and contractual relationships for establishing corporate and commercial best dispute solving practice. Even the cross border disputes includes any civil or commercial disputes which give rise to civil liability are solved through ADR process.
Successful implementation of ADR it depends on level of country’s economic development.
Effect of ADR mechanism in curbing impasse to help market are:
1. There is increase in industry ownership and credibility within the market.
2. There is access to dispute with consuming less time (earlier referrals) and there is speedy implementation of the order passed by the neutral party.
3. There is rise in co-operation commitments and awareness in commercial sector as it is loss to the disputants if they prolong dispute.
4. There is an economic development in commercial sector as process solves dispute efficaciously.
ADR follows mutual benefit strategy which provides opportunities which is adopted by the disputants. In industry sector for its benefit ADR framework is set up. In many cases business or association make a public commitment to use ADR when there is possible and appropriate situation. Chamber of commerce offer ADR services to their members . Business partner who are in a dispute are advised don’t litigate- ether mediate or arbitrate. Which saves company huge sum of money, lots of time, vital energy and will salvage a business relationship which may be in company’s best interest to preserve in market and provides forum of privacy.
Awards which are passed through ADR process such as mediation, arbitration is equally enforceable as judgment or order passed by courts.
Chief justice Burger says ‘litigation takes business executives and their staff away from the creative tasks of development and production and often inflicts more wear and tear on them than the most difficult business problems’. As today’s industry are encouraged to develop sophisticated decision making and negotiation skills enabling them to play an active role in conducting ADR process so treated it as privileged instrument of justice. To be considered as best market regulation in sector participation and buy-in there are some regulatory measures do more than enhance awareness, understanding, and compliance.

5) ADR IN IMPLEMENTING NEO-LIBERALISM AMBITION

To achieve the neo-liberal ambition there must be increase in income, economic growth, and proper business climate in a country. Many institutions, organisations helps in promoting and implementing the ADR process such as:

  • Permanent Court of Arbitration (PCA): it was established in 1899 situated in Hague in Netherlands which is referred as oldest institution for international dispute resolution handles cases between countries, between countries and private parties. In 2002, 96 countries were party to this institution.
  • World Trade Organisation (WTO): it is an international organisation which provides ‘rules of trade’ for the member countries through binding agreement. It aims to reduce the trade barriers by providing forum of negotiation, arbitration and trade settlement body for solving the disputes which arises between the member states.
  • International Chamber of Commerce (ICC): it support and promote trade at global level. In global economy it creates job, prosperity, economic growth of world business. Over all development of matters relating to business. Arbitration is included as dispute resolution to solve the disputes as it as direct access to national governments through national committees.
  • UNCITRAL model laws: in the field of international trade law it is a legal body within UN system. In 2010’UNCITRAL Arbitration Rules (as revised in 2010), 2002’UNCITRAL Model Law on International Commercial Conciliation, 1985′ first UNCITRAL Model Law on International Commercial Arbitration was drafted (amended in 2006). It governs ADR mechanism. It also provides procedural rules upon which parties may agree for conduct of proceeding arising out of their commercial relationship. It covers process, clauses, appointment of neutral party in case of arbitration. It also provide rules for commercial conciliation process. It help in settling board range of disputes, including disputes between private commercial parties where no arbitral institution is involved, investor- state disputes, state-to-state disputes and revised in order to meet the changes in practice. A number of innovative features are involved in the rules to aim to enhance procedural efficiency, including revised procedures for the replacement of an arbitrator, the requirement for reasonableness of costs, and a review mechanism. They also include more detailed provisions on interim measures.
    Even in NAFTA Agreement to solve the disputes between three countries prefer ADR process for trading disputes and cross border disputes. WIPO also offers ADR Scheme with global application. It as mediation and arbitration centre for solving intellectual property matters.

6) INFORMAL PROCEDURE OF ADR IN MAINTAINING HARMONY IN COMMUNITY

In a civilised society, principles of natural justice along with the ‘Rule of law’ is required to provide complete justice. ADR uses such principles in order to have a structured process where there is win-win situation to the parties.
As noted by Lord Woolf: ‘Where there exists an appropriate alternative dispute resolution mechanism which is capable of resolving a dispute more economically and efficiently than court proceedings, then the parties should be encouraged not to commence or pursue proceedings in court until after they have made use of that mechanism.
ADR is also considered as pre-litigation dispute resolution, while prior to court proceeding one can try to resolve the disputes which benefits the judicial system. The socio cultural criteria help to determine ADR process such as nature of disputes, relationship between the disputants, the size and complexity of the disputes, facilitates features, impediments for its effective resolutions. One of the advantages of ADR mechanism is to maintain harmony in community. Even if the conflict arose due to cultural aspect can also be solved through ADR. Governments may also prefer a particular process if there is larger social policy agenda is involved. Example: in New Zealand the use of mediation and informal tribunal is part of policy decision to facilitate access to justice for all citizens .
A minimum ‘shadow of the law’ is enough for the parties to adopt ADR process. Political stability and continuity of governments general respect for the rule of law legal framework to support ADR stakeholder involvement- business community, judiciary, ministry of justice, business organisation, legal profession etc. ADR can be considered as reform to justice system. Existed customary form aspects can be considered for using ADR process which are already exist in a country it should not be gender bias while solving the disputes. Their existence indicates a society’s willingness to go for ADR mechanism.
ADR rely on legal framework for support. As rules, laws are needed for enforcement of settlements or awards, maintaining confidentiality while conducting ADR process. Still there is necessary to create awareness of ADR process while more number of disputants opt it for resolving their conflicts which is a alternative access to justice.

Prominence of ADR in solving different forms of disputes:

1) Workplace disputes and ADR:

Conflict is an inevitable part of everyday working life. It is very difficult to move on without compromising. There can be employment dispute if it remain unsolved it affect the whole its organisation. Through negotiation or mediation procedure where the disputes and claims are dealt speedily and fairly as mutual satisfaction of both the parties’ involved. In Validi
V.s. Fairstead house school trust the court stressed the appropriateness of mediation for resolving workplace disputes
1) Family dispute and ADR
Family law litigants face a hard load of legal system. Disputes are painful and difficult experience such as divorce, domestic violence, child custody, separation etc. due to which three can be personal damage which can be resolved by process of mediation. Family mediation centres are being opened which provide wider societal benefit.
2) Commercial dispute and ADR
These type of dispute are inevitable which have impact on profit and viability of business which effect goodwill of the company. It degrade decision making quality, incur more money, cause uncertainty in business etc. disputes like shareholder disputes, internal, construction disputes are resolved by having arbitration clause in the contract or agreement for both domestic and international disputes.
3) Consumer disputes and ADR
For proper functioning of market there should be active participation of citizens to have healthy competition. Consumer as to be redressed when their rights are violated by traders. For e-commerce transaction to redress such consumers online dispute resolution is being set-up. Negotiation can be also adopted for solving the matters. Table showing use of conflicts typology of ADR process selection:
Employment/labor Mediation, conciliation
Land rights Mediation, stakeholder dialogue
Planning, and other potential disputes involving a plurality of stakeholders Stakeholder dialogue, adjudication
Construction, and other projects that cannot afford disruption due to disputes Adjudication, dispute resolution boards, mediation, expert determination
Complaints by customers against large organizations (banks, insurers, government departments) that may involve an ongoing relationship between the parties Ombuds services, mediation
Debt collection (for example, non-payment of utility bills) Streamlined adjudication, mediation
Information technology or similar disputes involving highly technical issues Expert determination
American Arbitration Association, ICDR also promote ADR mechanism in resolving the disputes as even in the matter of personal injuries, property disputes ADR process is used in efficaciously reaching the amicable settlement.

7) ADR AS GAINING DISCIPLINARY STATUS IN A GLOBALISING WORLD

There is a sustainable growth in the ADR mechanism. There is awareness where opportunities likely arise for sharing resources . Such generalisation of resources to ADR device in many countries covers many kinds, nature of disputes in community. Even government agencies, business organisations provide incremental resources, funds for long run of ADR process.
It is a degree of regulation in order to give confidence to user of the service at appropriate level of development of ADR. There is need to develop credibility of a new system. For success of any mechanism there must be ‘quality management’ and ‘high professional standards’. There is element of risk is involved. In the field of law ADR encourages ethics, commitments and professionalism which in return gain confidence of parties in its process.
All these factors clearly reflect the transcendence of a movement endowed with a generalised geographical and material extension, as well as enjoying an enormous actuality and a great legal, social and economic relevance. Nevertheless, its relevance is even higher than shown by those facts so far stated. The current extension of the ADR movement opens a new future for the understanding of access to justice and also, at the same time, generates, logically, a plurality of inevitable risks.
Due to there is rise in ADR movement where a clear link between western countries and to development of the welfare state can be seen . Four stages of which gave rise to ADR development in global world they are:

  • Pioneering world- develops ADR program, from tradition service provider such as courts, judges and lawyers.
  • Acceptance and adoption of ADR in policy, legislation and practice of legal system.
  • Rise in fragmentation, duplication and inconsistency of litigation process and rise of rivalries in profession, service providers and organisation in legal system.
  • Increased co-ordination and collaboration address common challenges and achieve joint objectives through ADR landscape.
    Reference to ADR primarily rests on party autonomy; on the will of the citizen not to refer his/her disputes to a judge but to look for other alternative ways to solve, soften or diminish disputes for the sake of individual and social peace. Nevertheless, the economic emergency that many western countries are currently facing favours the implementation of some compulsory out-of-court dispute solution schemes which, in some countries, have existed for along time. The scope of ADR is growing fast and currently a great deal of areas of law in many geographical areas of the world are affected by this movement.

Step by step, an interrelation between the traditional notion of access to justice deeply linked to access to State courts and the implementation of ADR devices has taken place to the extent that ADR is blossoming in many nations and looks more and more unstoppable. Such a global awareness regarding the possibilities that these devices offer as complementary tools to the judiciary has never before existed. This awareness is due not only to citizens’ needs and to national initiatives but also to its support by international organisms, in Europe by the
European Union. In the 21st century there is reshaping nation in access to justice and ADR acts a medium for it. It plays an vital instrument for solving the disputes and considered as essential process which serves the need of the citizens in the society.

8) CONCLUSION

Global world is getting linked to the idea of ADR mechanism. As there is increase in number of international trade, contracts which involve an increase in disputes. In this fast moving world parties does want to waste their money and time by following traditional court system. So there is rise in prominence of ADR mechanism in globalisation.
ADR mechanism is governed by law, policy where the award derived out of ADR process has got equally enforceable as judgement passed by the courts. But still parties not many parties opts ADR mechanism, even if opted the settlement goes worthless and unenforceable. There is need to create awareness about advantages of ADR mechanism among
such parties. Even many national and international organisations and institutions are promoting ADR mechanism as an effective tool for solving dispute.
John Kennedy said the ‘let us never negotiate out of fear but let us never fear to negotiate’. If the ADR mechanism is implemented properly by all the countries irrespective
of being considered as developed or developing countries world judicial system will have proper and effective administration of justice. Workload on court system will be decreased, saves time, and effectively saves costs also of the parties. As it provides win-win situation to the parties. As no one should be denied justice because of delays of inefficient procedure.
It is referred as tailored way of solving disputes which benefits everyone as it is more flexible and even confidentiality of parties are maintained. There is growing support to ADR process in many parts of world as procedure system becomes more effective, efficient and affordable to the parties. If its merits made known to all, it will help in maintaining harmony in the community. It also help to curb the impasse resolution which effect the markets from its expansion. So can say that, there is rise in prominence of ADR as tool for solving the disputes. Hence Alternative Dispute Resolution is gaining disciplinary status in a globalising world.

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