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ADR and Mediation
Lord Wolfe’s 1986 report, “Access to Justice” identified the need for a fair, speedy and proportionate need to resolve legal disputes. These principles which are at the core of the Civil Procedure Rules laid the foundation for the implementation of Alternative Dispute Resolution in the United Kingdom in April 1999. The CPR introduced references to ADR in rules of court and introduced pre-action means of settlement before court proceedings were issued. Lord Wolfe quoted "The results show that the opposing sides do have a common interest in the creation of an accessible and affordable civil justice system. Tactical delays and the withholding of information benefit no-one - they are not in the interests of justice. I am particularly concerned about the level of public expenditure on litigation, especially in medical negligence and housing. Substantial amounts of public money which are now absorbed in legal costs could be better spent on enhanced medical care and on improving standards of public housing.” The purpose of the inquiry was to improve access to justice and reduce the cost of litigation; reduce the complexity of the rules and modernize terminology; and to remove unnecessary distinctions of practice and procedure between the High Court and county courts.
Arbitration is a process of attempting to resolve a business/commercial dispute by bringing in a disinterested third party to hear the evidence by both parties and then to make a fair decision based on that evidence presented. Arbitration decisions can be binding if the parties agree that it should be binding. Arbitration is used in place of litigation to save time and money in reference with going through long and exhaustive court battles. Do not confuse arbitration with mediation, for a mediator is a third party brought in that is there to resolve the differences of the involved parties. Evidence is not heard by the mediator and the decision the mediator makes or infers is not binding in a court of law. The costs for arbitration are limited to the fee of the arbitrator (exclusive of the claim amount), expertise of the arbitrator (experience and ability) and her/his expenses related to the arbitration. Litigation in court can run into thousands of dollars and then so a party may not be happy with the outcome of the final award or judgment. Parties decide jointly on the arbitrator they want to hear their case, whereas in court the judge is appointed to hear the case. The arbitrator controls what evidence is allowed whereas in litigation full disclosure of evidence is required to both parties. Attorney’s representation is limited in arbitration for the arbitrator makes the decision on the evidence gathered and submitted prior to the arbitration date. Attorney’s represent the client fully in all aspects if the client options for litigation. There is no right to appeal in arbitration unless the parties have included a right to appeal in the arbitration clause. In litigation, there are always more options to appeal a judgment. If it be deemed that an arbitrator was biased in any fashion, the judge may vacate the order.
An indirect benefit of using arbitration versus litigation is the benefit to the consumer. Savings are passed onto the consumer in the form of lower prices because of the money saved using arbitrators versus attorney fees. On the average a court based resolution costs the taxpayers $3000.14 or £2117.48.
In employment related claims, arbitration can help to keep confidentiality of situations if the conflict is settled early on. Confidentiality provisions in arbitration agreements protect companies and employees from disclosure of public information that may be damaging and from false allegations. In the United States, [The Family and Medical Leave Act and Disabilities Act] have created protection of employees by expanding the rights under the doctrine of employment at-will. This has increased the number of employment claims and companies have looked to alternative ways of settling claims other than in litigation. [The Federal Arbitration Act] (FAA) requires federal courts to enforce arbitration clauses in contracts. Arbitration is favored in settling labor disputes, however it should be considered if the advantages of compulsory arbitration outweigh the disadvantages as seen in the landmark case of [Gilmer v. Interstate/Johnson Lane Corp. (90-18), 500 U.S. 20 (1991)].
A mediator is a non-biased third party brought in to resolve misunderstandings between parties. The decision of the mediator is not legally binding in the courts of law. The mediator helps both parties to explore their options in a private and non-confrontational, low-pressure atmosphere. Sometimes the mere fact of knowing you are going to court against another party adds undue stress thus mediation can help eliminate this situation. Parties split the costs for mediation and if the situation can be resolved it will be cheaper than continued litigation. Ending the disagreement with an agreeable resolution at the mediation stage promotes future healthy relationships between the parties especially in family law matters because the battle of litigation in court was eliminated. In the United States about 85% of cases that go to mediation are settled there. It is a healthy alternative before striking an ugly court battle.
Examining mediation a little deeper, mediation is particularly useful in family law with attempting to resolve differences where children involved. It teaches parents to negotiate with each other during times of crisis, how to present a unified front so that children will feel safe and protected, helps parents to anticipate the future needs of the children with respect to children’s’ educational needs, medical needs, school vacations, dating, etc. Mediation promotes Mom and Dad to become lifelong partners rather than a split of the union that normally occurs with a divorce or separation during co-habitation break-ups. Mediation also teaches each parent how to successfully manage their finances alone now that they are separated from the other spouse/partner which will be in the best interest for the children. Collaborative problem solving skills that are learned during this process pave the road for leaving each partner with skills that make them feel a sense of empowerment.
Did you know that a startling fact in the United Kingdom is that only 7% of managers in small to medium sized business organizations have admitted to using mediation in the workplace as a form of resolving conflict disputes and 56% say that they have heard of mediation but never really looked into the process? Why do these educated professionals choose to keep themselves in the dark about this process that can save time, money and keep conflict to a minimum in the workplace, thus keeping the privacy of the company in tact? Surprisingly research shows that the main reason these companies have not used mediation in their workplace is because they have not had situations suited to use mediation (87%). Managers also state that if circumstances arose in the future to warrant using mediation, they would consider using it (79%) compared to (29%) that have never heard of it before. The majority of UK managers agreed that the use of mediation might reduce the number of Employment Tribunal claims in the UK. Majority of managers felt that mediation should be used as a last resort, though.
Collaborative law is a form of ADR that began in the specialty area of Family Law with hopes of resolving disputes whereby parties agree they would not go to court or would not threaten to do so. It was historically introduced by Minnesota, United States Family Lawyer, Stu Webb in 1990. Both parties make every effort to reach a fair agreement through joint sessions with their lawyers and with neutral experts if needed. The focus of the meetings is to identify the issues and to progress towards making a settlement that is consistent with the goals and needs according to the standards that the parties set. It is believed that the parties can make the best decisions about their families and children and that is the reason this system is supported. More than 1,250 lawyers in England have completed training in Collaborate law in England since 2005.
The key document in Collaborative law is the Participation Agreement that is signed by both of the parties. It sets forth the rules of the binding agreement as follows:
a. The disqualification process serves as the key element of the collaborative agreement because it ensures that the lawyers’ interests are aligned with the clients’ interests in reaching a fair settlement by eliminating an incentive for litigation. It also ensures that the lawyers will work diligently to reach a settlement because if they do not they will be relieved of their legal services.
b. The purpose of not taking advantage of the others’ mistakes is to facilitate a relationship of trust. This is too based on the idea that when children are involved there is a clear need to pursue a continued positive relationship between the parties. short term advantage that a litigator may obtain from a mistake may lead to a long-term disadvantage for all parties involved concerning the children.
c. Freely disclosing information in an open and trusting atmosphere reduces legal costs.
d. Collaborative process respects the privacy of private financial information versus revealing it in open court process.
e. Money and time are saved by hiring only one expert versus bringing in two experts in court litigation.
f. Collaborative process promotes a healthy relationship between the parties in the future.It is possible in the collaborative process for one person to attempt to try to use the process to be dishonest or take advantage of the other party. It also happens in the conventional legal system of representation. If this happens, the agreement requires the representing attorney to withdraw his/her client from the process and the case must go to litigation under the fact that the client did not participate in ‘good faith’ efforts. An example of this situation would be if a client deliberately withheld or altered documents in order to delay matters for economic gain. The lawyers have agreed in advance that they would not continue to represent the client in this situation, therefore the client not acting in good faith would have to find another attorney and the attorney would be out of a job in reference to this particular client. Thus, it keeps a system of checks and balances on both parts of the attorney and client relationship.
Collaborative Law attorneys don’t act as ‘hired guns’ or ‘cut throat’ traditional stereotyped attorneys in litigation, rather they focus to achieve the highest good faith problem solving behavior from themselves and their clients and they state their integrity on that through their advice and their deliverance of their representation offered to their clients. Lawyers work together towards a common goal with a certain trust factor between each other while still maintaining allegiance to their client’s interests. The common goal is finding a solution that is acceptable to each individual client that is also acceptable to both clients as a whole. There must be a common ground that is reached and this is ascertained through careful professional negotiation techniques. To contrast collaborative law with mediation, the mediator cannot give legal advice; he/she is not trained to do so, therefore when there is an issue that arises where one person becomes unreasonable or stubborn, emotionally unbalanced or unable to negotiate, the mediation can become unbalanced and the mediator may seem biased, the mediation may break down and an agreement may not be reached or the agreement reached may seem unfair. Collaborative law possesses skilled negotiators that help to level the playing field by working with their clients to ensure the environment stays positive and productive. The average collaborative divorce is settled in seventeen weeks as compared to the average litigated divorce in seventeen months. Testifying in court is known to assure that spouses will remain enemies after litigation. Having friends, business associates and family choose sides leads to damage to the relationship that often is irreparable. Judges are required to follow strict rules when dividing property that often do not make sense to parties. Collaborative Law allows individuals to make decisions about the division about their property amongst themselves geared toward a resolution that they both can accept and feel that a fair bargain was reached. Interest based discussions work better than positional bargaining. This promotes generosity between parties.
Collaborative Law solicitors in the United Kingdom follow a code of practice of resolving disputes in a non-confrontational manner and in a manner which is constructive and designed to preserve people’s dignity and to encourage agreements.
They are required to:
• Conduct matters pertaining to the dispute in a constructive and non-confrontational way with regards to settling the dispute
• Encourage clients to put the best interests of the children first and above their own interests
• Emphasize to clients the importance of being open and honest in all dealings for the interest of settling the dispute and coming to an agreement
• Keep financial and children issues separate; for they are separate legal issues
• Inform clients of the options e.g. counseling, family therapy, round table negotiations, mediation, collaborative law and court proceedings; all are available to ensure that a fair resolution is reached between the parties
• Abide by the Resolution Guides to Good Practice
• Avoid use of inflammatory language both written and spoken
• Retain professional objectivity and respect for everyone involved for the best interest to reach an agreement and continued relationship to exist between clients
• Take into account the long term consequences of actions and communications as well as the short term implications with respect to the common goal
Conciliation is a less formal process than arbitration. The common goal is to bring two opposing sides together to reach a compromise in order to avoid litigation. In arbitration, parties agree in advance to remedy the situation by contract through the process of arbitration. Conciliation is used in labor disputes before arbitration and in other areas of the law. It is a suggestion of how disputes may be settled without the formal process of litigation. After the conciliator hears both parties’ views and proposals to settle the dispute, he/she prepares a report or conclusion, delivers it to both sides and considers their views. It is not binding unless they choose to adopt it. Under the [Public Service Labour Relations Act S.C., 2003, c.22, s. 2] it is stated to be a different form of mediation. This act mandates that a conciliator will “endeavour to assist the parties to the dispute or entering into or a collective agreement” and “submit a report to the ... as to its success or failure in assisting the parties to the dispute and as to its findings and recommendations.” There are three types of conciliation schemes one might come across in the United Kingdom:
1. Acas conciliation in employment disputes where the parties do not meet together, but the conciliator speaks to the parties separately over the telephone to try to reach a resolution to the issues at hand.
2. The Disability Conciliation Service where the parties meet face to face to discuss a possible resolution to their problems they face with each other.
3. The Furniture Ombudsman scheme for disputes about furniture, kitchen and disputes relating to bathrooms. The first stage of dispute resolution with reference to these issues is called conciliation where the conciliator contacts each party separately in hopes to gain useful information to settle the dispute in the future stages of the ADR process.
Conciliation appears to be similar to negotiation, but in negotiation the negotiator represents one side of the dispute through negotiation techniques, whereas in conciliation, the conciliator is an independent and impartial person whose common purpose is to facilitate an agreement without any representation of either party. Conciliation is with close resemblance to mediation. With respect to internal complaints, the conciliator acts as a representative for the company rather than an independent representative for the parties involved with the disputes. This would be with particular classification for the initial stage of internal business complaints such as a complaint against another employee that would be made through the Human Resources Department of an organization that was covered under contract by a Union Contract. If the dispute could not be settled at this stage of conciliation, the next stage would be to have it reviewed by the Arbitration Committee of the Union with respect to the “arbitration clause” of the contract and at the meeting a union representative, employee representative, employee and employee attorney being present. An example might be an action brought for breach of contract and misrepresentation due to change of work hours or work conditions after a labor contract was signed with arbitration clause having validity in contract. [Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1975)].
Conciliation is the phase of attempting an informal agreement before any more formal means of ADR are attempted. This method is used quite often in the American Courts of Justice and is being used in the United Kingdom Ministry of Justice more often to settle disputes because it helps separating parents to reach their own agreements about contact with their children. It consists of a brief meeting with Family Court Advisory and Support professionals. The University of East Angela’s report findings were:
1. The contact with overnight visitation with the non-custodial parent had increased since the initial conciliation intervention;
2. Two years following the conciliation (79%) of parents were in agreeance with a schedule for visitation with the children and the case had been closed;
3. However, (60%) of the initial conciliation agreements had been changed by the two year agreement and (40%) of the parents had been involved in further litigation since the original conciliation meeting
Conciliation appears to be only a short-term solution to litigation. It suggests that therapeutic based programmes might be the key solution to long term success of parental relationships.
Facilitation is another means of ADR. It is based on consensus-building collaborative problem solving conflict resolution used mainly to solve complex multi-party disputes. This type of resolution process might be useful in situations such as school board meetings or public policy meetings where the idea is to come to a consensus where all interested parties have a stake in the outcome. An example is where the school board may have a dispute over a regulation of whether a bus driver acted within their powers legally to discharge a child off of the bus that was acting inappropriate while the driver was on duty and the parent disapproved of the child being discharged from taking the school bus. The board would have to meet with the aid of the school board attorney to determine if legal procedures were followed and if it were in the scope of the powers of the bus drivers authority to do so within the best interests of the other children riding the bus or whether the child’s rights were violated by removing he/she from riding the bus. This was an issue that came up in the local town that I am from in St. James Parish, Louisiana, and United States. It was found that the bus driver was within her rights to temporarily remove the child from the bus from at the time to protect the other children on the bus and that the child was to be disciplined according to the Procedure Code of the Governing Body and if he would not obey the rules he could be permanently deprived of the right to ride the bus after certain procedures were followed.
Efficient pre-trial negotiations select cases that have the less legal expenditures in contrast to those who have the largest legal expenses preferring to settle out of court. We find that the American legal system yields the highest legal expenditures through trials than those of French and British courts. In the Different Expectations Model or “optimistic approach” Hughes and Snyder (1995) the Defendant and the Plaintiff have incomplete but symmetric information. If the Plaintiff feels more confident than the Defendant then this approach bars the likelihood of the pre-trial negotiations. The rational expectations say that every agent’s subjective belief about an idea is a conditional of this equilibrium conditional distribution, where the conditioning is based on what the agent believes. The existence of Information Asymmetries where one party has more or clearer information than the other creates an imbalance of power which can create the transaction to not be completed. A moral hazard is created to the ignorant party because of such beliefs. Osbourne supports Bushbuck’s (1984) view that if pre-trial negotiations fail it is usually due to a lack of some neglected aspects during the discovery process. Although the Rules of Civil Procedure are clear and treat Plaintiff’s and Defendant’s equally and symmetrically with respect to the right of information, they fail to create the conditions of privileged access to information nor do they prevent the existence of what information can be acquired(Osbourne, 1999). To simplify the meaning of this statement, this requires the introduction of attorney’s to obtain the documentation which introduces another cost for the parties to the contract or lawsuit. We assume that both parties enter the discovery process with different amount of discovery information available to them. This means that the party with less information available to them will have to spend ‘ex post’ a higher cost for legal production.
With respect to “behavioral law” and “economics” we are aware as individuals of our true nature of self-serving bias; however that does not necessarily mean that the very existence of this bias makes us unable to recognize its identity or to recognize the identity in our opponent. This is in contrast to Farmer and Pecorino’s view. Generally speaking in most social situations people tend to rationalize their own decisions and behaviour. Cognitive dissonance operatives as a theory of self-manipulation of one’s own beliefs. If the Defendant has been shown by facts that he/she has been negligent, the Defendant will reinterpret the situation to show he could not have prevented the situation and he/she has no other choice but to go to trial to receive just treatment. Same goes for the Plaintiff that may have received unclear evidence. He/She may file the case based on the idea that unclear evidence exists hoping for a fair settlement in the court system.
It is difficult for a client to monitor a lawyer’s input of effort or the quality of the outcome whether the solicitor has made a correct judgment as to when it is in the client’s best interest to cease pursuing a claim (Bowles, 1996). There is a conflict of interest and an asymmetry of information between them. This is particularly true when the lawyer is paid with Conditional Fees. Fee shifting can influence a client’s decision whether to negotiate a settlement or go forward with litigation. A typical fee shifting clause in a contact might state: "In the event of any controversy, claim or action between the parties, arising from or related to this agreement, the prevailing party will be entitled to receive from the other party its reasonable attorneys' fees and costs." [Wheeler vs. T.L. Roofing Inc., (No.: 02CA0713, May 22, 2003)].
Sir Richard Malins VC in [Smith v Buller (1875) LR 19 EQ 473]:
“It is of great importance to litigants who are unsuccessful that they should not be oppressed into having to pay an excessive amount of costs ... I adhere to the rule which has already been laid down that the costs chargeable under a taxation as between party and party are all that are necessary to enable the adverse party to conduct the litigation and no more. Any charges merely for conducting litigation more conveniently may be called luxuries and must be paid by the party incurring them.”
Arguments in favour of fee shifting are that it compensates the winner, helps people without means to litigate, deters frivolous and unmeritous litigation; deters delay tactics often used in process and deters misconduct and promotes settlement. Arguments against fee shifting are that the loser pays the winners fees which are quite often less, scares the unwealthy party from enforcing their rights which may be meritous and founded but they may be afraid of the idea of paying the fee shifting. Thus, justice may not be served after all. Lord Woolf in his Interim Access to Justice Report (June 1995, Chapter 25, paragraph 11) stated in relation to the fee shifting rule that research had shown:
“... that the existing rule has the tendency to increase expenditure on cases when compared with a system where each party bears its own costs ... any propensity to litigate which our rule might encourage tends to be associated with more meritorious cases and greater expectations of success than does the American rule under which win or lose each party generally bears his own costs.”
Fee shifting can be used as a way to promote settlement, but I firmly believe that the increased cost relating to the discovery of documents, interrogatories, oral depositions, expert testimonies and other preparations for trial are perhaps one of the most influential reasons aside from the important reason to keep the relationship for future reasons in tact.
We have basically examined negotiators role in domestic relations but briefly I would like to express the negotiators powerful bargaining power in the international trade negotiations between the EU and the United States. International negotiation addresses the process of negotiations concerned with political, security, ethnic, economical, business, legal, scientific and cultural issues and conflicts among nations, international and regional organizations, multi-national organizations and other non-state actors. They are aimed at principle non-violent means to manage international disputes and search for mutually accepted agreements. These are not ‘one shot’ negotiations and there are a number of negotiators involved in these processes and several ‘independent’ negotiators available during the entire process to speed the negotiation process along.
No matter what the contractual issue presents, the main goal is to settle the dispute with an amicacable and non-violent outcome with consideration to the costs the parties will incur if litigation has to take place. Argument exchange is essential when various assumptions about agent rationality cannot be satisfied. Therefore, it is essential to exchange arguments which influence each others state of mind. It is never too late to begin the ADR process, but it is always profitable to begin with a clear, just and open mind! The key to success in ADR is to keep the ‘cut throat’ mentality out of the bargaining process and keep the long term goal in mind while negotiating.
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