Describe the Different Methods of Alternative Dispute Resolution Available to do with Civil Courts.

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1 1 Describe the Different Methods of Alternative Dispute Resolution Available to do with Civil Courts. In Lord Woolf s Report Access to Justice (1996) one of the key recommendations was to encourage the use of Alternative Dispute Resolution (ADR) within the civil courts 1. This main recommendation in the report led to the 1999 Civil Procedure Rules which allowed judges to temporarily stop the court proceedings in order for parties to try different methods of ADR. The four key methods of ADR are negotiation, mediation, conciliation and arbitration however the use of tribunals to help solve cases is also used as this avoids the threat of a case being taken to court. The purpose of these alternative methods is to try and avoid going to court which can be a costly and time consuming process for both parties. Negotiation One method of ADR which is used within the civil justice system is negotiation. Negotiation is an informal, voluntary, private way of resolving a dispute and parties involved are able to negotiate in their own time with no strict timetables to follow which could cause clashes. This method is the most basic form of ADR which avoids going to court, should it be successful, as well as incurring minimal costs for both parties with little legal help involved. An example of a case that could be negotiated would be neighbours trying to settle what piece of land belongs to whom and through negotiation this would be settled as well as a good relationship between the people being kept which is vital as they are neighbours. Should parties not be able to come to an agreement on their own, solicitors are able to become involved where by the parties instruct the solicitors and they will try to negotiate a final settlement that both parties would be happy with. The problem with solicitors becoming involved would be that costs would no longer be minimal due to legal help and solicitors fees can be very expensive, and the longer the negotiation continues, the more the fees will grow for both parties. This can lead to the parties not being able to afford the costs incurred which would then lead to it taking even longer to come to an agreement on settlement. As well as using negotiation, parties are able to use the Citizens Advice Bureau who are able to give advice on when to use solicitors as well as help in finding a solicitor whose fees are affordable 2. Litigation can be used as a threat within negotiation Many settlements are agreed at the door of the court when cases have dragged on for many years and it is this circumstance that ADR intends to avoid. 1 Martin, J The English Legal System pg citor.htm#is_a_solicitor_needed

2 2 Mediation Mediation uses the help of a neutral third party, known as a mediator, to help parties to reach a compromise. This measure can be taken should negotiation fail to continue to avoid going through the courts and incurring high costs. Mediation is another voluntary form of ADR and is used to resolve varying disputes, mainly involving family matters and divorce. The mediator is used to consult with the parties and to establish common ground to try and reach a compromise solution. The mediator is impartial and is not able to force an agreement upon either of the parties or give their own personal views. Should an agreement be made on a settlement, the agreement is written down on paper and then forms a legally binding contract which states the parties agreements 3. The parties are able to either chose their own mediator or could even approach a meditation organisation which would help in the negotiation of choosing an appropriate mediator for the needs of both parties. Meetings of mediation usually take place face to face with both parties but in extreme circumstances separate rooms may be granted. The average cost of resolving property and financial disputes caused by separation is around 500 through using mediation for a publicly funded client compared to 4000 for the issue to be settled through court 4. This shows a saving of 3500 which is a drastic saving. Furthermore, the average time for a mediated case is 110 days compared to 435 days for the issue to be settled through court 5. This shows that mediation is a great tool of ADR which saves the parties both time and money. Formalised settlement conferences are a formal method of mediation involving a mini trial where by each side presents their case to a panel consisting of a decision making executive from each party as well as a neutral party. Once each case has been made the panel will then evaluate the situation and try to come to an agreement. If the two executives from each side cannot come to an agreement then the neutral party acts as a mediator 6. There are also a number of commercial mediation services which many businesses use and the main one used is the Centre for Dispute Resolution which was set up in 1991 in London 7. Many businesses and large companies have taken to using this method as is has proved to save several thousands of pounds in court costs that would have been incurred, however the use of this service does not guarantee the case to be settled. As well as there being mediation services for large commercial businesses there is also services which are aimed at solving small disputes between neighbours. An example of one of these would be the West Kent Mediation Service 8. This offers a free service to neighbours with disputes such as noise, or car parking. It is run by trained volunteers who do not take sides or make judgements and try to arrange a meeting between both parties to resolve the matter. Recently 3 AS Law Elliot and Quinn, Chapter 19; pg mediation- encouraged- as- divorce- hotspots- are- revealed 5 mediation- encouraged- as- divorce- hotspots- are- revealed 6 Martin, J The English Legal System pg Martin, J The English Legal System pg Martin, J The English Legal System pg 124

3 3 there has been an idea in Online Dispute Resolution where by sites such as try to solve cases through mediation online whereby there is a vast distance between parties. Conciliation Conciliation is very much similar to mediation, where a neutral third party is used, known as a conciliator; however the conciliator is expected to take a more active role in suggesting a solution to both parties to settle the dispute. It is also similar in the fact that it is voluntary between the parties and is private. The conciliator has an important role in raising relevant issues involved with the dispute and offering a viable solution in which both parties could come to an agreement. Currently in the UK a conciliation scheme is ran by ACAS who are able to offer advice on industrial disputes. ACAS offer an independent and trusted service for dealing with disputes between groups of workers, their representatives and their employers. Furthermore they also deal with disputes whereby individuals claim their employer has denied them a legal right 9. The use of conciliation as a form of solving disputes has become more popular over time, even though it does not always lead to a resolution and court action could still be necessary. This is mainly because the conciliation is kept confidential between both parties and no publicity is involved which could damage an individuals or companies reputation. To try and encourage the wider use of ADR, the Government have stated that they will settle any of their disputes through both the use of mediation or conciliation and that court would only be used as a last resort 10. Arbitration There are two types of arbitration. One which involves an informal procedure in which the courts hear a case and the other where parties agree to submit their claim to private arbitration to solve the dispute. This section will focus upon where parties agree to submit their claim to private arbitration. Section one of the Arbitration Act 1996 govern private arbitration and it sets out that: The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without the unnecessary delay or expense The parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest 11 The Arbitration Act 1996 only applies to written arbitration agreements. When agreeing to use arbitration, this can be made at any time by any party. Many commercial contracts include what is known as the Scott v Avery clause where the parties in their original contract agree that should a dispute arise that that it would be AS Law Francis and Quinn, Chapter 19, pg Martin, J The English Legal System pg 125

4 4 settled through the use of arbitration 12. When this has been signed in the contract, a court will refuse to deal with the dispute and it must be settled by the parties where the arbitrator will make the final decision which is legally binding. Parties are able to choose the arbitrator that they use however this choice must be that the arbitrator is not connected to either parties to ensure impartiality. The decision that the arbitrator makes is called the award and is legally binding therefore the courts can be used to enforce this decision should it come to that. There are two different types of arbitration that are used and the parties can chose between which one they use, the first is a paper arbitration where parties both submit their arguments in writing to the arbitrator. The role of the arbitrator in this circumstance is to read the documents and then make their decision upon what both parties have submitted. The second is where parties submit their documents to the arbitrator and then attend a hearing whereby their case can be supported by the use of witnesses. Tribunals Tribunals operate alongside court, and although they are not a direct method of ADR, if it is decided to use a tribunal then it is not possible to go through court to resolve the dispute so it does avoid going to court and is also not as expensive. Experts are also used to help present and prepare cases, furthermore tribunals only allow for people to represent themselves as there is not a need for representation by a lawyer. This is what keeps the costs down and the losing party therefore do not have to pay the winning parties lawyer s fees. Tribunals were created to give people a method of enforcing their entitlement to certain social rights and an example of this would be the right not to be discriminated against because of one s sex, race, age or disability 13. The Tribunals, Courts and Enforcement Act 2007 reformed the way in which the tribunal system works. It introduced two different structures. The first tier tribunals are split into 7 chambers and hear cases. This tier hears around 300,000 cases per year which is why there is the need for 7 different chambers 14. The upper tribunals are divided into four chambers and hear appeals that come from the first tier. In conclusion, the wider use of ADR in the civil justice system has allowed for fewer cases to be taken to court where costs are incurred that neither party want. Furthermore the cases are dealt with much quicker than compared to court and allow for the parties to engage in solving the dispute whenever they chose rather than following a strict timetable set by a judge. 12 Martin, J The English Legal System pg Martin, J The English Legal System pg Martin, J The English Legal System pg 128

5 5 Discuss the Advantages and Disadvantages of using Arbitration rather than the Courts. Arbitration is the oldest form of Alternative Dispute Resolution (ADR) and uses a neutral third party, known as an arbitrator, to make the final decision. This final decision is a binding decision which means that it is final and can even be enforced through the use of the courts. Advantages When arbitration takes place between two parties, it is possible for the parties to choose their own arbitrator. This means that according to the case presented, it can be decided whether it is best for a technical expert to deal with it, or whether a lawyer or professional arbitrator would be more appropriate. Furthermore should there be a question of quality in the case then an expert in the particular field being presented could decide upon what is correct and what isn t. This in turn saves the expense of calling expert witnesses for both parties as well as having to explain the many technicalities involved to the judge. Another advantage of using arbitration over going to the courts is that the time and place of the hearing can be arranged to suit both parties. This saves travelling expenses for the parties because a place that is close to both can be decided upon. The procedure of arbitration itself is also very flexible which means that the parties can choose the best time that suits them to avoid any clashes in timetables and for their life to carry on as normal without any huge disturbance. This then results in an informal hearing compared to court with a relaxed atmosphere. This plays a part in keeping the relationship between the parties because after arbitration many wish to sustain a relationship with the other party. Arbitration is conducted completely privately with no publicity at all and this works to a large businesses advantage because they are able to deal with disputes without the fear of their reputation being damaged. Many large companies now use the Scott v Avery clause in their contracts with customers because this means that the dispute cannot go to court and a court will not accept the dispute 15. This means that the company are able to avoid publicity and deal with the matter privately. This works to the advantage of the company however it does not always have the customers interests because these large corporations are able to hire an arbitrator and consistently use them which would build a relationship and put the customer at a disadvantage. Proceedings for arbitration are typically cheaper than going to court and do not take as long to conduct. An arbitration hearing lasts around 7 or 8 months 16. However on 15 Martin, J The English Legal System pg faqs/arbitration- mediation- faqs/arbitration/how- long- does- arbitration- process- take.html

6 6 average taking a dispute to court typically takes 14 months or even more in some cases 17. This shows a vast difference in time; however it depends upon the complexity of a case and the timetable as to how quickly it is dealt with. Once the award has been made by the arbitrator this decision is final and is legally binding. This decision can also be enforced by the courts. Disadvantages However even though there are advantages to using arbitration rather than the courts, arbitration also presents disadvantages. Even though both parties are able to choose the arbitrators that are used, when large corporations use the Scott v Avery clause in their contracts this puts the other party at a disadvantages because the corporation will have built up a relationship with the arbitrator which means that the outcome may not be completely fair. Using arbitration does not involve following specific points of law, and is only based upon the case presented by the parties. This means that when an unexpected legal point in the case arises it may not be suitable for the chosen arbitrator to make the decision as they are uninformed on the law. When going through arbitration because it does not involve going through the courts this means that legal aid is not supplied to those in need. If the parties were not on equal footing, like a company against an individual of a low income, that the individual is at a disadvantage as they would not be able to present their case as well as the company would as they could afford legal advice which would damage the outcome. Though it is said that arbitration is cheaper than going through the courts, this is not always the case because if it is decided that a professional arbitrator will be used, then these fees can be substantial. The London Court of International Arbitration charges an administration fee of 1750 on top of any hourly fees that the arbitrator charges 18. When a formal hearing is chosen, this involves witnesses giving evidence as well as lawyers to represent both sides which incur further costs, so it could be cheaper at court. Once the arbitrator has made the final decision, this is binding to both parties however the rights to appeal are highly limited meaning that the decision is final in most cases. In conclusion, the use of arbitration presents many advantages instead of using the courts however there are also disadvantages. Whilst arbitration can suit large businesses well through the use of the Scott v Avery clause and with complete privacy it can put an individual of a low income at a disadvantage when facing these companies due to the no legal aid being provided, where the courts to in fact provide this. 17 Martin, J The English Legal System pg

7 7 Bibliography Sites 1. _legal_action_e/using_a_solicitor.htm#is_a_solicitor_needed Books 1. Jacqueline Martin The English Legal System (2010) 2. Elliot & Quinn AS Law (2002)

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