Litigation can be defined as a contest between and among persons
Litigation certainly has disadvantages. First of all, litigation is time consuming. Litigation process is a very complicated process. It needs to go through many steps and stages before the trial start. It takes long time to complete the pre-trial stages. According to the report written by Arthur (2008), Edition of the New York Times in 23 March 1983, an experienced lawyer was explaining to young potential lawyers what they can expect in litigation practice. He said, “You spend years and years in pre-trial motion practice. I smother the other side with papers and they smother me with papers until we wear each other out and the judge knocks my head against his head and we settle. It takes around three or four years."
Litigation is very costly and financially. Every citizen has the right to seek satisfaction for his or her grievances in the courts. The problem is paying the bills. A trial of a complex business case normally takes months; some have gone far for more than a year. Examples of the fees and expenses required to pay are lawyers’ fees, expert witnesses’ fees and others associated fees. Notably, the pre-action stage of proceedings can often be a very time-consuming and an enormously costly exercise. In addition, the uncertainty of the period of time that a trial might use will raise the expenses and fees time to time.
Other disadvantage of litigation is it is more benefit to wealthier party. Litigation is not a process of solving problems, but a process of winning arguments. Wealthier party is enable and affordable to hire an experienced and good lawyer to engage in the lawsuit. Judge and jury can be easily convinced by a good lawyer whom has strong convincing skill.
Besides that, litigation is unsuited to disputes involving technical issues. The fact that neither the judge or the jury may not have enough knowledge nor experience with the subject matter of the dispute between the parties. The expertise might relate to physicians, accountants, engineers, economists and others professions. Lack knowledge of jury and judge might cause resulting in wrong decisions and consequential appeals to higher forums.
Litigation is adversarial, which means less regard to fair solution. Court decisions might not acceptable to either party, result in disturbance of commercial relationship. Adjudication of court results in win-lose scenario and not a mutually acceptable decision. Hence, a party who is dissatisfied with the result may seek an appeal following trial.
Alternative dispute resolution, commonly referred to as ADR, is the collective term for the option that parties can resolve civil disputes, with the help of an independent third party and without the need for a formal court hearing. The independent third party will become the mediator between the complainant and the respondent, that is, the party against whom the complaint is being made.
ADR is a fast growing area within the justice system. In 1970s, ADR was reinvented in the US. More and more people became increasingly concerned that the traditional method of resolving legal disputes in the United States in the late 1980s and early 1990s. (The free dictionary, 2011) Since 1990, ADR became the fashionable development in England and Wales. Many Judiciary and legal profession took a very active interest in ADR. It is because the parties and lawyers and courts realized that ADR could always help them resolve legal disputes in a quickly and cheaply way than conventional litigation which is too expensive, too slow, and too cumbersome for many civil lawsuits.
By 1996, a significant push came from Lord Woolf's 1986 report 'Access to Justice', that identified the need for fair, speedy and proportionate resolution of disputes. This has been increased the importance of using ADR in the UK, as it has been judged that it has the capacity to increase the level of access to the justice system amongst the general public.
Those principles lay at the heart of the Civil Procedure Rules, which came into force in April 1999. The Civil Procedure Rules included references to ADR in rules of court and introduced pre-action protocols, with their emphasis on settlement, even before court proceedings are issued. Civil Procedure Rule 1.4(2) (e) now requires the court, as part of its responsibility to actively manage cases and encourage the parties using an ADR procedure if the court considers it appropriate and to facilitate the use of such procedure. (Delia, 2011)
There are many types of ADR. In general, there are conciliation, mediation, and arbitration. It included other types of ADR such as adjudication, ombudsman, early neutral evaluation, expert determination, Med-arb and Med-rec schemes.
Conciliation is a good first step in the ADR process. Conciliation involves an impartial third party, known as conciliator, who helps the people in dispute to resolve their problem. Conciliator will generally be a member of the trade association of which the company in question is a member. Conciliation is not legally binding upon the complainant. Therefore, the complainants are free to reject the decision and take further action to enforce their rights after the outcome of the conciliation process. Conciliation often used in disputes about access for disabled people to goods and services. It aims to secure a resolution in response to a particular incident of alleged discrimination which is satisfactory to the complainant.
The term conciliation is often used interchangeably with mediation. But, conciliator takes a more interventionist role than mediator in bringing the two parties together and suggesting possible solutions. Basically takes mediation a step further and gives the mediator power to suggest grounds for compromise and a possible basis for a conclusive agreement. Conciliation is an assertive, rights-focussed process that fundamentally aims to enable the complainant to exercise his or her rights in law.
Furthermore, conciliation is generally free to the consumer. As a result, this tends to be a good place to start.
Another potential alternative is mediation. Mediation, also known as conciliation, is the fastest growing ADR method in UK and Europe. It offers solutions beyond those that a court could ordinarily impose. Mediation provides a forum in which parties can resolve their own disputes and strike their own bargain, with the help of a neutral third party, mediator or facilitator. Mediator's job is to keep the parties talking and help them to move through the difficult points of contention instead of impose a decision upon the parties. The advantage of mediation is that the dispute is over when the parties reach agreement. They face no appeals, delays, continuing expenses, or unknown risks. Unlike litigation, which focuses on the past, mediation looks to the future. The parties can move forward again. Thus, a mediated agreement is particularly valuable to parties who have an ongoing relationship, such as a commercial, employment or neighbour relationship.
In arbitration, an impartial third party will hear both the respondent and the complainant in a dispute and makes a decision to resolve it. The outcome of arbitration is final and legally binding on both sides. Therefore, it is impossible to go to court if they are disagreeing with the decision. However, there is an exception for legal binding. If there are serious flaws in the arbitrator’s decision, or they have acted contrary to the rules in the Arbitration Act 1996, an appeal may be made to the High Court.
Arbitration is quite similar as litigation with it an essentially adversarial process and the fact that the ultimate decision made by third party is binding. However, arbitration is a step away from formal litigation. Arbitration is private rather than public. Hearings are less formal than court hearings, and some forms of arbitration do not involve hearings but are decided based on the help of documents only.
Ombudsmen exist in a number of fields, generally in relation to public such as the Local Government Ombudsmen or quasi-public bodies such as the Banking Ombudsman or the legal Services Ombudsmen. Function of ombudsmen is to investigate complaints in the relevant sector, for instance, maladministration by any government department. They may have powers to award compensation or only make recommendations to the body against whom the complaint is make out. The majority of recognised ombudsman schemes are set up by statute; others are voluntary non-statutory schemes set up on the initiative of the service sectors concerned. For example, services provided by insurance companies, banks and building societies are all covered by the Financial Ombudsman Service (FOS).
Adjudication involved an independent third party, adjudicator who is usually an expert in subject matter in dispute. Adjudicators are not bound by the rules of litigation or arbitration. Their decisions are often interim ones. It means that they can be finalised using arbitration or another process. Adjudication decisions are usually binding on both parties by prior agreement.
In relation to construction contracts, adjudication is a statutory procedure by which any party to the contract has a right to have a dispute decided by an adjudicator. It is intended to be quicker and more cost effective than litigation or arbitration. The right arises by virtue of the Housing Grants Construction and Regeneration Act 1996.
Early Neutral Evaluation (ENE) differs from arbitration in that the opinion non-binding and has greater informality. Unless the Parties agree, otherwise it is not subject to “due process", hence, it is more flexible. In particular there is no need for a trial-type hearing. Unless the Parties agree that it should be, the Evaluator may conduct investigations independently of the Parties, and make the recommendation based on those investigations without reference to the Parties. Parties should obtain legal advice when embarking on an ENE, but do not strictly need to be legally represented during the procedure.
In expert determination, third party will consider the claims made by each side and issue a binding decision. The third party is usually an expert in the subject of the dispute and is chosen by the parties. Like adjudication, the parties should agree at the outset to be bound by the expert's decision. It is most suitable for determining technical aspects of a complex dispute. A straightforward example of this method of ADR is sometimes used in boundary disputes. The parties agree to be bound by the decision of an independent expert, in the example, a surveyor who comes to a conclusion as to the correct sitting of the boundary.
Other types of ADR are Med-arb. As the name suggest, this is a combination of mediation and arbitration. The parties begin by mediating. If they fail to resolve the dispute by mediation, they have agreed in advance to submit the dispute to binding arbitration. In some cases the same person acts as mediator and arbitrator; in others a different neutral is brought in to arbitrate.
Med-rec is one of the forms of mediation in which the mediator gives the parties a recommendation for resolving the dispute. Mediation is conducted in the usual way, with the mediator encouraging the parties to reach their own agreed resolution. If they do not, they can ask the mediator to recommend a resolution. This recommendation can be accepted or not. If accepted by both parties it can become a binding settlement.
In my opinion, I am agree that Alternative Dispute Resolution (ADR) is a better alternative in a wide range of civil conflicts, such as commercial disputes, professional liability cases, personal injury matters, insurance problems and family disputes. It should be note that ADR is not a suitable solution for criminal disputes; these will almost always require a full court hearing.
In the aspect of civil conflicts, there are some common agreed benefits of ADR as compared to litigation that makes me believe that ADR is better option to litigation. First of all, Courts may have the risk to make a bad situation worse. Using ADR system, it can let both parties talk to each other. This let both sides increase their understanding to each other’s position. It helps each other to find a solution that both can live with. It can help preserve an ongoing relationship. This might be useful if the parties have a dispute with neighbour, ex-partner, child’s school, or landlord.
Secondly, there is a much wider range of outcomes with ADR than with courts. If the main aim of a party is an apology, an explanation, or a change in policy or practice by an organisation, mediation or an ombudsman investigation may well be more appropriate than court.
Next, procedures of ADR are more flexible than the court process. Most of the ADR procedures are without a formal hearing. For example, ombudsmen will investigate party’s complaint through letters and documents, mediators will usually bring both parties together for a face to face discussion and ACAS will try to negotiate a deal through a series of phone calls.
Besides that, ADR techniques can produce a win-win solution, however, litigation provides a win-lose situation. Mediators try to generate creative discussions about a range of options. They will try to end up with an agreement which reflects the best possible outcome for all involved, rather than just aiming for an acceptable compromise. Research on family mediation indicates that agreements reached through mediation are more likely to work out in practice, and to last longer, than those imposed by a court. Virtually all of the mediated agreements made in small claims cases are complied with, hardly need any enforcement action by bailiffs.
Furthermore, one of the ADR methods, ombudsmen has the power to investigate problems in depth. Like courts, it requires information to be provided by the organisation complained about. Unlike courts, they are free of charge to the user. Poorly performing local authorities and government departments can be named and shamed by the public services ombudsmen. Especially if the problem that faced by the parties are a symptom of much wider problems with a particular council or public body, then the ombudsman can investigate one complaint, and suggest wide-ranging changes in practice to make things better for everyone.
Last but not least, some ADR options provide a remedy where there are few other practical, affordable options; this could include issues such as neighbour disputes about noise or low-level anti-social behaviour, or complaints to the Financial Ombudsman Service about financial service providers.
It is not obligatory to seek legal advice by using alternative dispute resolution, but it is advisable. Litigation is to be viewed as a last resort with court having continuing obligation to encourage and facilitate settlement.