Litigation can be a costly and time consuming process and parties are increasingly seeking alternative forms of resolving disputes.
This article provides an overview of the main types of alternative dispute resolution (ADR) and their respective benefits and limitations.
The term ADR is used to describe dispute resolution processes that do not involve traditional litigation procedures or final adjudication of a Court or Tribunal. The aim of ADR is to provide participants with a quicker and cheaper alternative to going to Court.
There are many different forms of ADR, including the following:
The commercial world has been seeking alternative forms of dispute resolution in order to avoid the costs of litigation and the executive time and energy expended on lengthy court procedures. Many commercial contracts contain arbitration, mediation or expert determination clauses making it a requirement that the parties commence an ADR process if a dispute materialises and as a prerequisite before commencing legal proceedings.
However, both the Courts and legislature have also driven the increasing trend of using ADR in order to try and alleviate the cost of litigation and the pressures of case management. This has further been encouraged by the obligation on prospective litigants in many jurisdictions to take ‘genuine steps’ to resolve their disputes before litigation is commenced. It is suggested that genuine steps include considering whether the dispute may be resolved before litigation through some form of alternative dispute resolution.
ADR processes can deliver efficient and cost effective results which provide satisfactory outcomes for the parties involved. The primary advantages include:
The disadvantages of ADR include:
There are clear benefits to parties utilising alternative processes for resolving disputes. If you are considering whether ADR is suitable for a dispute you are involved in, we recommend that seek legal advice from your lawyer.
If you or someone you know wants more information or needs help or advice, please contact us on (02) 9274 8820 or email firstname.lastname@example.org.