Alternative Dispute Resolution

Alternative dispute resolution, or external dispute resolution, typically denotes a wide range
of dispute resolution processes and techniques that act as a means for disagreeing parties to
come to an agreement.

What is an Alternative Dispute Resolution?

Alternative Dispute Resolution (ADR) is a technique to resolve disputes and disagreements

between the parties by arriving at an amenable settlement through negotiations and
discussions. It is an attempt to establish an alternative mechanism other than the traditional
methods of dispute resolutions. The ADR mechanism offers to facilitate the resolution of
matters of business issues and the others where it has not been possible to initiate any process
of negotiation or arrive at a mutually agreeable solution.

In India, ADR is established on the basis of Article 14 (Equality before law) and Article 21
(Right to life and personal liberty) under the Constitution of India. The Directive Principles
of State Policy (DPSP) of Equal justice and free legal aid as engraved in Article 39-A of the
Indian Constitution can also be achieved by the ADR.

Types of Alternate Dispute Resolution mechanisms

Various Alternative Dispute Resolution mechanisms can be classified as:

1. Arbitration
2. Conciliation
3. Mediation
4. Judicial Settlements inclusive of Lok Adalats
5. Negotiations
Arbitration

Under this form of Alternative Dispute Resolution mechanism, both the parties involved in
the dispute, choose the person to hear and determine their dispute through a consensus. The
objective of arbitration is to arrive at a fair resolution through an unbiased tribunal speedily
and in a cost-effective manner.

Go through the following links in relation to Arbitration –

1. The Arbitration and Conciliation (Amendment) Bill

2. Permanent Court of Arbitration (PCA)
Advantages of arbitration:

 Flexibility- Arbitration proceedings are flexible and more economically feasible

compared to litigation.
 Time-Consuming- Arbitration proceedings occur at an expeditious rate as compared
to Litigation; therefore, it saves time for both parties.
 Confidentiality- The disputes which are subject to arbitration are treated with privacy,
and are not released to the public.
 Arbitrator- The parties have the liberty to choose an arbitrator to handle their dispute.
 Enforceability- Arbitration awards are generally easier to enforce as compared to
court verdicts.

Disadvantages of arbitration:

 If arbitration is mandatory as per the contract between the parties, then their right to
approach the court is waived.
 There is a very limited avenue for appeals.
 Arbitration does not provide for the grant of interlocutory applications.
 Arbitration awards are not directly enforceable; they are executable subject to judicial
sanction.

Conciliation

Conciliation is a method of dispute resolution wherein the parties to a dispute come to a

settlement with the help of a conciliator. The conciliator meets with the parties both together
and separately to enter into an amicable agreement. Here, the final decision may be taken by
reducing tensions, improving communications, and adopting other methods. It is a flexible
process, therefore allowing the parties to define the content and purpose of the proceeding. It
is risk-free and is not binding upon the parties unless they sign it.

Under the process of conciliation, the intention is to facilitate the settlement between the
parties. The parties, however, are not obliged or are not bound by the conciliation, in a sense
that negotiations can be carried out until the parties arrive at a mutually pleasing settlement.
The process is handled by an impartial individual termed as the conciliator. He is an active
participant in the process of conciliation and is involved in discussing the issues, negotiating
and bringing about an amicable settlement.

Advantages of conciliation:

 Flexibility: Since the conciliation process is informal, it is flexible.

 The conciliator is often an expert in the disputed field.
 Conciliation proceedings, like any other form of ADR, is economical as compared to
litigation.
  The parties to the dispute have the liberty to approach the court of law, if unsatisfied
with the proceeding.

Disadvantages of conciliation:

 The process is not binding upon the parties to the dispute.

 There is no avenue for appeal.
 The parties may not achieve a settlement to their conflict.

Mediation

Mediation is a mode of dispute resolution, where an amicable decision arises with the help of
a third party known as a 'mediator,' without recourse to the court of law. It is a voluntary
process, and unlike arbitration, it is more flexible; therefore, the parties to the dispute are
under no obligation to agree to the settlement. Thus, an agreement taken via mediation shall
be binding upon the parties, only as long as they agree to it. There may be instances where
parties are advised to adhere to Mediation, however, under such circumstances, the result is
up to the parties. Therefore, Mediation is a process where the parties are in total control over
their final settlement. Here, the mediator only acts as a facilitator and does not interfere in the
decision of the dispute. Therefore, it is a win-win pact.

A mediator is involved in assisting the parties in dispute to reach an agreement. The parties in
dispute themselves set the conditions of the settlement to be reached. The third-party does not
impose any decisions on the parties but merely acts as a facilitator involved in improving the
dialogue between the parties.

Advantages of mediation:

 Parties have complete control over the settlement.

 Less stress as compared to litigation and arbitration.
 The relationship between the parties isn't overly damaged.
 Mediation proceedings are confidential.
 The process resolves the dispute quickly.

Disadvantages of mediation:

 Since the decision is at the discretion of the parties, there is the possibility that a
settlement between the parties may not arise.
 It lacks the support of any judicial authority in its conduct.
 The absence of formality- Mediation proceedings are lacking in any procedural
formality since they are not based on any legal principle.
 The truth of an issue may not be revealed.
Lok Adalats

The establishment of Lok Adalat system of dispute settlement system was brought about with
the Legal Services Authorities Act 1987 for expediting the system of dispute settlement. In
Lok Adalats, disputes in the pre-litigation stage could be settled amicably.

Negotiations

Negotiation is a method of dispute resolution whereby a dispute between two individuals or

groups is settled amicably by an impartial third person called as a negotiator, using different
techniques. The negotiator, in this form of resolution, uses various communication methods
to bring the parties of the dispute to a settlement. The primary aim of this type of dispute
resolution is to reach an agreement that is fair and acceptable by the parties. The parties
engage in the dispute with each other until they reach a desirable outcome for all involved.

It is the most common method of alternative dispute resolution. A non-binding procedure in

which discussions between the parties are initiated without the intervention of any third party
with the object of arriving at a negotiated settlement to the dispute. Negotiation occurs in
business, non-profit organizations, government branches, legal proceedings, among nations
and in personal situations such as marriage, divorce, parenting, and everyday life.

Advantages of Negotiation:

 Flexibility: since negotiation is an informal process, it is relatively flexible.

 Quick resolutions as compared to litigation.
 It facilitates in maintaining a healthy relationship between the disputing parties.
 Takes place in a private environment

Disadvantages of Negotiation:

 The parties to the dispute may not come to a settlement.

 Lack of legal protection of the parties to the conflict.

Imbalance of power between the parties is possible in negotiation.

Collaborative Law

In a collaborative law process, the parties and their separate attorneys agree to settle their
differences without going to court by negotiating and coming up with solutions. The
emphasis is on collaboration and coming up with original solutions that satisfy the
requirements of all parties. In many ways, collaborative law may be seen as negotiation as
long as the parties seem to be in stronger correlation to how resolution is to be met.
Mini-Trial

In a mini-trial, each party's representatives present their case to an impartial third party. That
third party is usually a senior executive or an impartial advisor, and this presentation is part
of a structured negotiating process. In order to assist the parties in reaching a settlement, the
third party offers an assessment or opinion on the likely course of the case. Though this may
mirror a formal court proceeding, it is done in a much more private setting with many fewer
parties.

Arbitration is more formal than mediation and resembles a trial, albeit with greater
flexibility and the ability to act outside of federal rules.

Advantages of Alternation Dispute Resolutions ADR

 It is more viable, economic, and efficient because the procedural flexibility saves
valuable time and money and there is no stress of a conventional trial
 Helping maintain confidentiality as the resolution of disputes takes place usually in
private.
 The possibility of ensuring that specialized expertise is available on the tribunal in the
person of the arbitrator, mediator, conciliator, or neutral adviser.
 The result is often creative solutions, sustainable outcomes, greater satisfaction, and
improved relationships.
 Further, it offers greater direct control over the outcome. Personal relationships may
also suffer less.

Appropriate and Inappropriate Uses of ADR

Though ADR may sound favorable in many cases, there are numerous situations in which it
not advised or an appropriate litigation option. At its core, ADR can be used to settle civil
law difficulties involving your neighbors, an insurance claim, a landlord and tenant, or a
construction contract.

ADR is also frequently employed to settle problems involving child support, visitation
rights, spousal support, the division of marital property, or eldercare issues. It is also an
appropriate option when considering employment disputes. Conflicts including workplace
discrimination, pay disputes, breaches of employment contracts, or workplace grievances
may be resolved using ADR techniques like mediation or arbitration.

In other cases, ADR just doesn't make sense as an option. In general, ADR is not appropriate
for resolving criminal matters involving grave violations, such as murder, assault, or
significant fraud charges. It is also not typically acceptable in circumstances involving
domestic abuse, sexual harassment, or where one side has a lot of negotiating power over the
other.
In certain situations, ADR may not be appropriate for resolving disputes concerning topics
of public concern. For example, consider constitutional questions, environmental laws, or
policy choices requiring a more comprehensive look at society in which the general public
would benefit by the issue at hand being fully investigated. This may also include situations
where there have been violations of human rights, illegal detentions, or constitutional rights.

Pros and cons of ADR

Pros of ADR

 It is less expensive.
 It is less time consuming.
 It is free from the technicalities that are present in the court system.
 The parties are free to differ in their opinion and can discuss their opinions with
each other, without any fear of disclosure of this fact before the courts.
 There is no feeling of enmity between the parties as there is no winning and losing
side. They also get their grievances redressed and their relationship remains as it
was before, therefore, they can conduct future business deals with each other.
 ADR is more suitable for multi party disputes, as all the parties can put forward
their opinions at the same place and in one go, rather than going to court again and
again. Also, it provides for a wider perspective of the dispute.
 The parties often have the choice of the ADR method to be used. They sometimes
also have the choice to select the individuals or bodies who will settle the dispute.
 The process is also very flexible, according to what suits the parties.
 The parties also have the option of being confidential. The ADR system also
enables the parties to put focus on practical solutions.
 A wider range of issues are considered and shared future interests of the parties are
protected.
 ADR system also allows for risk management.

Cons of ADR

 ADR is not helpful where a dispute is to be decided on the basis of a precedent.

 When there is a need for court and interim orders, ADR would not be useful.
 ADR is less suitable when there is a need for enforcement.
 When there is a need for live and expert evidence and analysis in a case, then ADR
would not be useful.
  When there is an imbalance of power, between the parties in the dispute, then
ADR would not work.
 If the case is of a complex nature, then the adjudicating body must look into minor
details and may need expert advice and suggestions. Here, ADR would probably
not work.

Which Disputes Can Be Settled by Alternative Dispute Resolution?

ADR processes are commonly used in a wide variety of civil disputes between individuals
and/or organizations. These disputes may involve such topics as:

 Family and divorce

 Housing
 Neighborhood
 Environment
 Employment
 Business
 Consumer issues
 Personal injury

Some countries also use alternative dispute resolution in certain criminal matters, such as
juvenile crime.

What Are the Benefits of Alternative Dispute Resolution?

Depending on the particulars of the dispute and the type of alternative dispute resolution
used, ADR may offer a number of potential benefits compared to lawsuits:

 Less costly
 Less time-consuming and fewer delays
 Less formal and more flexible than court proceedings
 Less need for an attorney in some simple disputes
 Less adversarial, helping to preserve relationships between opposing parties
 Greater privacy than court records allow
 Greater control over the outcome and the ability to create “win-win” solutions that satisfy
both parties
Why you should consider ADR

Time: Whilst pursuing litigation can take months or years, most forms of ADR can be
undertaken within a few days. This can pose a significant saving of time for your case.

Costs: Similarly, due to the time savings, most matters can be resolved efficiently saving
both sides significant costs.

Control: With ADR the parties have control over how they proceed with their matter, as they
can decide which form best suits their interests. For example, whether or not they want the
decision to be legally binding.

Confidentiality: The aforementioned procedures are usually conducted confidentially, which

enables full and frank negotiations.

Business Relationships: Pursuing ADR as a form of reaching a settlement increases the

likelihood of maintaining relationships, as settlements are reached with consent of both
parties.

Requirement: Parties in contentious disputes are required by the Courts to attempt ADR and
may make adverse costs orders against parties which refuse.