Alternative Dispute Resolution: You Must Use It
Disputes and conflicts in business are commonplace and often inevitable. Wherever humans work together, be it in the workplace or where businesses deal with each other, disagreements will arise. We all have unique personalities, diverse views, and differing memories. Fortunately, most disputes are resolved speedily and amicably, but what happens when conflicts just can’t be resolved? Business disputes can be complex and time-consuming, and if they end up in court, very costly. This should be avoided at all costs – and businesses across the country are doing so by using alternative dispute resolution (ADR). Here’s the lowdown.
What is ADR?
Simply, ADR schemes are ways you can resolve a dispute without having to go to court. These schemes involve independent third parties that can be called upon when your dispute can’t be settled.
Types of ADR
There are four main types of ADR:
- Negotiation – typically stage one for anyone trying to resolve a dispute. Both parties put their ‘cards on the table’ and attempt to find a compromise. Specialist dispute resolution specialists can be used to negotiate on behalf of the parties if desired.
- Mediation – a jointly instructed neutral party assists in reaching an agreement. Mediators help lessen hostility and allow key issues to be identified and focused on.
- Arbitration – here the facts are considered by a specialist arbitrator who will hear from all parties before making a decision.
- Expert Determination – both parties instruct an independent expert to make a decision on technical issues in a dispute.
When You Should Use ADR
Only look to use ADR when you’ve done all you can to resolve the dispute amicably. You should ensure you’ve gone through all customer service or internal complaints procedures. If this doesn’t solve the issue, then alternative dispute resolution should be your next move.
Is ADR Legally Binding?
Any decisions arising from mediation and conciliation are not legally binding. However, arbitration is final and is legally binding. Like a court judgement, it is enforceable. Decisions are very difficult to appeal; you’d really need to find an issue with the process. For example, if the arbitrator had a link to the company you’re in dispute with that wasn’t disclosed.
Benefits of ADR
Avoiding court and using ADR has many benefits for businesses.Here are some of the key advantages alternative dispute resolution offers:
Preservation of Relationships
Litigation can be very confrontational and stressful. It may completely destroy your relationship with the company you are in conflict with. Court proceedings are very one way – it is all about one party prevailing over another. Feelings can become very raw and emotion can take over from the practicalities of business. With ADR, it is far easier for parties to come to a ‘win-win’ resolution that benefits everyone.
ADR is usually far quicker than court proceedings, you’re talking a matter of days instead of months and perhaps even years. ADR works to your schedule, not that of the court.
Everything is resolved out of the courtroom. Going to court is never cheap, and with ADR you remove the need for expensive solicitors and barristers. You can also use people who are completely expert in the technical areas of your dispute. Remember, with court proceedings, it is often the case that only a fraction of costs are recoverable.
You go to court, your dispute crosses into the public realm and confidential information about your business can often end up being disclosed. With ADR, disputes are private matters between the involved parties and their representatives.
ADR is very successful. According to 2020 research undertaken by leading ADR provider The Centre for Effective Dispute Resolution, the overall success rate of mediation is 93%.
Resolving disputes can be time-consuming and a huge drain on your resources and mental state. While occasionally disputes can only be resolved by going to court, it is in the best interests of all businesses to avoid this. Alternative dispute resolution offers a much better way of settling conflicts. If you’re currently having issues with resolving a dispute, then find out all you need to know about ADR by checking out the great guidance from Business Companion.