Going to court is not the only method for resolving disputes. The high costs, long delays, aggravations and loss of privacy involved in going to court are just a few of the reasons why more and more people with disputes are turning to more effective ways to settle their differences.
Alternative Dispute Resolution (ADR) refers to any means of settling disputes outside the courtroom. Normally ADR are Cost Effective, Fast, Flexible and Fair. There are various forms or ways of resolving disputes under ADR.
The most common form of dispute resolution is negotiation. By this means alone nearly all disputes are resolved. If negotiations fail, it is necessary to seek the assistance of a neutral third party or several neutral third parties to facilitate a solution.
Conciliation and Mediation
Conciliation / Mediation involve the appointment of a third party to assist the disputing parties to reach a settlement of their difference. It is a process in which a neutral third person, the mediator, encourages and facilitates the resolution of a dispute between two or more parties. It is an informal and non-adversarial process, which has the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement. It is less expensive and less tolling on emotions.
The use of binding and non-binding mediation has increased greatly in both the private and public sectors, particularly for legal and business disputes. Many companies have chosen to insert mediation clauses into standard contracts as a preliminary dispute resolution step before arbitration or litigation. Mediation has proven an outstandingly successful management tool for resolving difficult disputes and should always be considered when negotiations fail before proceeding to arbitration or litigation. It is a means by which the parties can re-learn the basis of communication with which they can then resolve future disputes. More about mediation / conciliation.
Arbitration is a legal process, which takes place outside the courts, but still results in a final and legally binding decision similar to a court judgment. Parties involved in arbitration are effectively opting out of the court system and submitting their case for resolution by a neutral, third party arbitrator. Arbitration is generally faster, less expensive and more informal than going to court. It also has the advantage of being private and confidential.
Arbitration is a legal process, which results in an award being issued by the arbitrator or arbitrators. Arbitration awards are final and binding on the parties and can only be challenged in very exceptional circumstances. An award has a status very much like a court judgment and is enforceable in a very similar manner. More about arbitration.
In the absence of an arbitration agreement or other consensual means of dispute resolution, the parties may commence proceedings in the courts. The decision of the Court of First Instance is not, however, final as an aggrieved party has an automatic right of appeal to the Court of Appeal and then again to the High Court and Supreme Court.
Dispute Prevention & Management (DPM)
Prevention is always better than cure. IIAM believes that an effective litigation management practice and risk management tool will avoid 50 – 70% of the litigation expenses of a company / industry. IIAM Dispute Prevention & Management (DPM) is intended to prevent legal risk and enhance business compliance. Designing and structuring ADR clauses is as important as choosing the right mode of dispute resolution. Customized ADR clauses tailored to fit particular situations or hybrid-clauses will help the parties to have clarity on the dispute resolution process and resolve the disputes in a time bound manner.