Alternative dispute resolution is the process by which people use to resolve legal problems without recourse to the court. The court has been used as a place for resolving conflicts for a long period. In the recent past, people found out better methods of resolving minor disputes without recourse through the court. The aim of introducing ADR was to reduce the bulk of cases at the courts and to provide quick solutions to conflicts. Only major conflicts are resolved through the court1. ADR has been identified to have advantages and disadvantages depending on the type of conflict being resolved.
Types of ADR
Arbitration is the process by which a third neutral party is used to resolve disputes between the conflicting parties2. The arbitrator acts as a private judge and his role is to impose a resolution when parties fail to come to a consensus. Arbitration is explained in the content of the Scott v Avery clause3. An example is when resolving conflicts relating to consumer agreements such as credit card agreements.
Through mediation, parties to a conflict are helped by a third party to come to a consensus. The role of a mediator is to assist the conflicting parties to come to an agreement. The final resolution cannot be imposed by the mediator4. An example is a case where government leaders disagree over an issue, such as the post-election conflicts experienced in Kenya in 2007/2008. The former UN secretary-general, Kofi Annan was invited to help the two political parties to resolve their conflicts5.
In a negotiation, there is no third party involved in the negotiation process. The parties in conflict agree to end their conflict without the use of a third party6. An example of negotiation is a case where neighbors resolve their disputes by discussing among themselves instead of resolving the disputes through the court. There is no third party involved in resolving the conflicts during a mediation process.
Scott v Avery clause in business contracts
Scott v Avery clause in business contracts means that parties in a dispute must resolve the problem by the use of arbitration before proceeding to the court process. This implies that arbitration should be used as the primary dispute resolution mechanism. After the parties fail to resolve the dispute by the use of arbitration then they can use the court7.
Advantages of using ADR in business contracts
ADR is cost-efficient because there are few charges involved. The parties agree on the most convenient place and time to resolve their disputes. The parties agree on the process which will minimize costs because they have the freedom to decide how to resolve the dispute. The process saves time in resolving disputes. Compared to courts, the parties can resolve the dispute as fast as possible without the use of many processes. There is greater satisfaction with the judgment because the entire process involves dialogue between the parties. The parties participate equally in the dispute resolution process and this satisfies their needs.
In some cases courts worsen a situation that could have been resolved by the use of an ADR. ADR allows the parties in a conflict to discuss and come to a consensus while a court only makes judgments depending on the ability of the parties to defend the case. There is flexibility when using ADR because the conflicts can be resolved according to the terms agreed upon by the conflicting parties8.
A win/win solution can be obtained when ADR is applied because the parties discuss a range of alternatives that can be used to resolve the conflicts. ADR is more private and parties can discuss in confidential places without exposing themselves to the public. Litigations are open to the public and the parties to a conflict expose their private issues. Additionally, ADRs are not formal and the parties discuss with freedom compared to court cases where strict formalities are applied9.
Disadvantages of using ADR in business contracts
ADR cannot be applied in all cases because some conflicts require the use of courts. Mediation and negotiation do not create legally binding contracts and this makes them less effective in solving serious cases. The solutions obtained in mediation or negotiation cannot be used as precedents in the future. Differences in power between the conflicting parties may hinder ADR because one party feels inferior while the other feel superior and this may affect the results of dispute resolution. There is no regulation on the people offering ADR services and this creates a risk of offering poor services to the clients. This makes it impossible for the conflicting parties to decide the best ADR providers to use. It may be impossible to come to a consensus during negotiation or mediation because the parties are not bound to resolve the conflict10.
Adrnow. Pros and cons of ADR. 2009. Web.
Biegon, Japhet. Electoral violence and fragility in Africa: drawing lessons from Kenya’s experience in the 2007/2008 post-election violence. Paper for presentation at the poster session of the conference on ‘Financial Markets, Adverse Shocks and Coping Startegies in Fragile Countries’, Accra, Ghana.
Branch, Alan and Samuel Richardson. Australia: Arbitration Clauses. 2009. Web.
Fiadjoe, Albert K. Alternative dispute resolution: a developing world perspective. Routledge, 2004. Web.
Duhaime. Scott v Avery Clause definition. Web.
Nieuwmeijer, L. Negotiation: methodology and training. HSRC Press, 1992. Web.
Ransom, Damany. Legal Affairs Alternative dispute resolution. Smart Business Atlanta | 2008. Web.
Stitt, Allan. Mediation: a practical guide. Routledge, 2004. Web.
- Albert K. Fiadjoe. Alternative dispute resolution: a developing world perspective. Routledge, 2004. Web.
- Alan, Branch and Samuel Richardson. Australia: Arbitration Clauses. 2009. Web.
- Damany Ransom. Legal Affairs alternative dispute resolution. Smart Business Atlanta | 2008. Web.
- Allan Stitt. Mediation: a practical guide. Routledge, 2004. Web.
- Japhet Biegon. Electoral violence and fragility in Africa: drawing lessons from Kenya’s experience in the 2007/2008 post-election violence. Paper for presentation at the poster session of the conference on ‘Financial Markets, Adverse Shocks and Coping Strategies in Fragile Countries’, Accra, Ghana. para 14.
- Nieuwmeijer, L. Negotiation: methodology and training. HSRC Press, 1992. Web.
- Duhaime. Scott v Avery Clause definition. Web.
- Adrnow. Pros and cons of ADR. 2009. Web.
- Damany, Ransom. Legal Affairs Alternative dispute resolution. Smart Business Atlanta | 2008. Web.
- Adrnow. Pros and cons of ADR. 2009. Web.