5.1 Alternative Dispute Resolution (1)
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Alternative dispute resolution or ADR is used to refer to a number of different ways of resolving disputes without going to trial.
Negotiation is generally the first stage of dispute resolution when both parties discuss the issues, usually without prejudice. Lawyers may attend to represent or advise their client. Negotiation can be conducted either in person or by phone.
Mediation involves a neutral third party who attempts to assist both parties to reach a settlement. This mediator does not judge nor comment on the merits of each side's case. Additionally, the mediator refrains from making their own suggestions as to how best to resolve the matter. Instead, the process involves the mediator moving between the parties, helping them to define their positions and assisting them to identify areas of common ground from which a settlement may eventually be reached. Any settlement does not have the force of law, however and so will not be legally binding until an agreement is signed by both sides.
This is similar to mediation, whereby a neutral third party interacts with each side, however, the conciliator can be more proactive than the mediator and is able to suggest ways to solve the dispute. Like mediation, the settlement must be formalised with the signing of an agreement before it will be legally binding.
This is a far more formal method of resolving disputes than negotiation, mediation or conciliation. Many commercial and construction contracts include an arbitration clause which binds the parties to undertake arbitration in the event of a dispute. Arbitration is governed by the Arbitration Act 1996 under which an arbitrator will be appointed and will have the final decision in the matter. The arbitrator's decision will be legally binding and can be enforced or appealed in the High Court.