Litigation is a costly and inefficient process, and there is always a risk that you may not receive the outcome you would like. What are the alternatives to litigation that may resolve these issues? The alternative dispute resolution (ADR) processes of negotiation, mediation, conciliation and arbitration will be discussed in this article, highlighting the benefits of each. In some circumstances, ADR can be court ordered. It is beneficial to exhaust all ADR methods where appropriate, as this can have an impact on cost awards.
Negotiation is the process in which parties and their legal representatives discuss an issue without a mutual third party present. The parties attempt to determine or express each other’s needs and interests as distinct from their positions. Negotiations are the least formal method of alternative dispute resolution, but they also give parties maximum control over the outcomes. The benefits of negotiation is that it is a quick process, in contrast to lengthy litigation. It is also significantly more cost efficient. However, it may be inappropriate in situations where there is inequality of bargaining power, or in situations where the relationship between the party is hostile. On the other hand, negotiations can have the benefit of maintaining and repairing relations between parties which may be irreparably damaged through acrimonious court battles.
Mediation involves a neutral third party who can advise the parties in an effort to facilitate discussion helping resolve the dispute, and produce a mutually beneficial outcome. The emphasis is still on the discussions between the parties, and the mediator’s role is to advise on the rights and obligations of the parties when necessary to do so. Mediation is a beneficial process as it can provide the parties with a neutral professional who can assist in repairing fractured relationships, and assisting the parties in maintaining constructive and relevant discussions. Mediators can also engage in ‘shuttle diplomacy’ where it is inappropriate to have the parties in one room. In these circumstances, the mediator will carry messages between the parties who may be in different rooms. Mediation can produce a binding outcome if the parties want to sign one. An agreement can be signed between the parties, which is binding through contractual principles.
Conciliation is similar to mediation, only the conciliator takes a more active approach to discussions, advising the parties on the merits of proposals and the risks associated with particular courses of action. This may be preferred by parties seeking a more formal dispute resolution process, in comparison to negotiation and mediation. Conciliation can also produce a binding outcome if the parties want to sign one.
Arbitration is a viable and efficient alternative to litigation in Australia. It is a process through which parties to a dispute present their arguments and evidence to an impartial arbitrator who makes a final and binding determination. Arbitration presents many benefits that may be attractive to potential litigants. Significantly, the process is private and can be confidential. Confidentiality is greatly beneficial to parties who wish to keep their affairs private. Privacy cannot be guaranteed in a court of law. Furthermore, arbitration is flexible and efficient, in contrast to the lengthy litigation process. It can also be used to resolve domestic and international disputes. Arbitration offers a final and binding decision, making awards enforceable.
In addition to this, Oppenheim Legal can assist you with communicating with the other party on your behalf via more informal means of communication, such as sending letters, emails, or telephone calls.
The alternative dispute resolution processes of negotiation, mediation, conciliation and arbitration have unique benefits. When commencing dispute resolution, parties should consider their aims to best determine what process should be undertaken.
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This article was authorised by Warwick Heeson.