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Throughout many sovereign states, the courts have always been seen as the chosen method to settle civil disputes. Courts administered with rules and procedures in place and this was how each case was administered. Due to the strength of the legal system in both England and Wales, it was, therefore, alluded that this was the trusted method to resolve all cases Blake et al., (2012). However, more uncertainty was felt whether a trial was the effective way of dealing with disputes as it caused complexity and increased costs. Moreover, due to a number of cases that have settled out of court over the past decades, the increasing popularity of the various forms Alternative Dispute resolution was imminent Blake et al., (2012). Furthermore, In 1998 ADR was officially acknowledged with the Civil Procedure Rules in Part 1, which explains that courts should actively do case management. The reference to ‘case management’ further implies that courts should encourage parties to make use of alternative dispute management. Furthermore, it is the prerogative of the courts to determine which cases may make use of an alternative dispute resolution procedure Gladwell (2004). Alternative dispute resolution can be defined as a dispute resolution processes and methods which are used as a way for parties who disagree to reach an agreement in the form of a short legal process Ionescu (2015). In addition (Edmond, 1998 p.1) describes ADR as “the practices of alternative dispute resolution as increasingly displacing, infiltrating, and transforming conventional models of legal dispute resolution”. Alternative dispute resolutions have essentially pointed out to lawyers that they need to take note of the ADR options that are available for a client. How the ADR procedure works, the advantages and disadvantages of each option of ADR, the cost implications of ADR as well as the role of the lawyer with regard to the ADR process Blake et al., (2012).
There have been various options available for the use of ADR. Some of these options are outlined by Blake et al., (2012) which involve the first English statute linking to Arbitration. Tribunals were also used to decide over disputes with administrative agencies over the last centuries. Another method to dealing with disputes concerning administrative matters was the use of an ‘ombudsman’, who would act as an independent person who reviews the actions of the government that concern individuals in the society. For the purpose of this essay, we will look closely at the ADR option of Arbitration in which “a dispute submit to the binding decision of a person acting in a judicial manner in private, rather than to a court of law. Unlike other forms of Alternative dispute resolution, arbitration is governed by a statue: The Arbitration Act 1996. The arbitrations in England and Wales are governed by the act. Furthermore, Blake et al., (2012) explain that arbitration differs from litigation in two methods in that a dispute will only be called arbitration if the parties agree to go that route and when the parties appoint the arbitrator, whereas the state would normally appoint a judge. An example of an arbitration case can be referred to that of Oxford Shipping v Nippon Yusen (The Eastern Saga)  3 All ER 835. Additionally, Scalise and Engels (1988) described that commercial disagreements in arbitration have successfully been applied in areas such as construction and partnership agreements. Arbitration ultimately covers all commercial transactions. Basically, three motives emerge underpinning an interest in alternatives to traditional litigation. (1)” the conservation of time and money, while relieving the judicial system from overloading; (2) having better mechanisms by which to resolve disputes – less formal and more sensitive to the particular needs of the participants; and (3) protecting individual positions” Scalise and Engels (1988, p.54).
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Due to the rising interest of alternative methods to resolve disputes such as the process of arbitration is that the process is personalized to the specific dispute. The parties can select an arbitrator of their choice who has the relevant expertise, rather than the state nominating a judge from the courts. The process is held privately other than through a trial and therefore the parties can agree whether they want to make public statements about the case. Also, settlements reached through ADR can be reached faster as cases in courts may take many years. Although ADR‘s growing interest has been due to lower costs as it cheaper than going through the process of the court. The drawbacks of this form of ADR, as explained by Blake et al., (2012) however the benefit of lower costs may decrease if a relatively expensive form of ADR is chosen such as arbitration. The outcome of the decision is made by the arbitrator and therefore the parties do not have any control of the matter as they would have in a process of mediation. Vessenes (1997) highlighted the following drawbacks to arbitration as an option of ADR, which are as follows. Limited discovery as the parties is not allowed an in-depth finding of court litigation. This is crucial as the claimant might need extensive information to prove his or her case. Also, since formal rules of evidence will not apply, arbitrators may use evidence of items which could be rejected or detrimental in the courts. Another drawback is limited appeals, as arbitrators not giving a legal reason for the decision of a case, it makes it difficult to appeal a panel decision. Finally, Blake et al., (2012) explain that arbitration is only likely to be successful when the parties agree to the arbitration process and have taken great care in the selection of an arbitrator. However, the degree of failure on such a case would be on an arbitrator not appropriate for the case and has no knowledge or background and subsequently leaves the parties dissatisfied with the outcome of the case.
- Blake, S., Browne, J. and Sime, S. (2012) A practical approach to Alternative Dispute Resolution. 2nd ed. Oxford: Oxford University Press
- Gladwell, D. (2006) Alternative Dispute Resolution and the courts. Civil Court News.
- Ionescu, M. (2015) Alternative Dispute Resolution. V.2, pp. 89-92.
- Vessenes, K. (1997) The trouble with Arbitration. Journal of Financial Planning, V.10 (1), pp. 18-22.
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