Do you think the courts offer the best means of solving disputes?
Written by Harry Messenger
In recent years there has been a significant increase in the use of Alternative Dispute Resolution (ADR). This growth has revolved around the costs involved in resolving disputes through the courts in terms of money and time.
Proceedings in the courts may also be traumatic and damaging to business relationships. Courts can be an inappropriate environment for the matter especially when concerning disputes of a highly technical nature, which may be determined better by specialists in the field rather than judges. These main factors aswell as several others have seen the surge in demand for Alternative Dispute Resolution.
The courts are keen to promote the idea of using ADR as an alternative to the court process which is slow, expensive, inconvenient and generally inaccessible. They view ADR as a means of justice for those who would not otherwise follow up or resolve disputes because they are deterred by the courts. Until recently if you had a legal problem you would have to go to court or a tribunal in what is called litigation. This is still a common way of sorting out such problems but now there are alternative ways, the courts encourage people to try these sorts of schemes before they resort to the courts.
The courts are pushing people to view courts as a last resort, they have also shown in Dunnett v Railtrack 2002 that they will penalize those who ignore ADR. Dunnett and Railtrack had a dispute, which was resolved in court. Railtrack won the case but because they had previously refused mediation they were not awarded costs, this has become a precedent. The Woolfe report recommends that civil procedure rules involving litigation should now require parties to pursue alternative methods of dispute resolution.
These are not an alternative to the courts system but operate alongside them. Unlike ADR where parties have decided not to use the courts, parties in tribunal cases canít go to court to settle their dispute and must use the tribunal procedures. Tribunals can be either Administrative or Domestic.
These tribunals have been created by statue to enforce rights, which have been granted through social and welfare legislation. As new rights and responsibilities are created so a tribunal is created to control and judge disputes arriving from the application of the law. Tribunals have been formed as the welfare state has developed and there are now 70 different types of tribunal.
Each tribunal is headed by a legally qualified chairperson who sits with two independent members, representing the views of either side. Individuals are encouraged to bring their own cases and avoid using lawyers. Representation by a lawyer increases the costs of the process and can crteate an imbalance to the equality of the parties. Procedures vary for each tribunal, generally there are no formal rules of evidence and procedure but the rules of natural justice apply, allowing both parties an equal chance to state their side. Tribunals make an award rather than giving a judgment.
Domestic Tribunals
These are set up and used by private bodies usually for their own disciplinary control. They must keep to the rules of natural justice and their decisions are subject to judicial review. They are staffed by senior members of the profession and have the powers to fine, suspend or prevent from practicing.
Tribunals have been set up to prevent overloading of the courts, they are vital within the legal system as they handle six times the number of cases dealt with by the courts. Although they cant substitute the court system they support it and combat many of the flaws of the court. They are cheaper, quicker, private and informal, they also provide a blend of legal and lay expertise on the panel.
Costs are kept low by the encouragement not to use lawyers but to represent themselves and costs are not usually awarded by the panel so the applicant need not fear a large bill in defeat. However applicants who arenít represented have a lower chance of winning their case than those who arenít represented. This is not a problem within the courts as everyone is represented and it seems strange that representation is optional when really there should be set rules on the issue. This can lead to unbalanced hearings with businesses or large firms taking their own lawyer creating inequality. The speed of the hearings is considerably quicker than that of the courts however the process still can take a long time with part time lay members and a large workload.
There is a simple procedure due to the informality of the hearings, the flexibility and lack of strict rules of evidence. The chairman is expected to take an inquisitorial role, helping establish the points the applicant wishes as the individuals find themselves presenting their own cases in an unfamiliar and confusing environment. Tribunals are also flawed by not having to give reasons for their decisions, not following a system of precedent and having no rights of appeal for some tribunals. Tribunals and the court system are not directly linked because the applicant uses one or the other and not a combination of the two. So you cant compare them against each other they are both set up to resolve different disputes.
A dispute can be resolved directly through two people by negotiation. This has advantages such as privacy, speed and cost. However if parties canít come to an agreement and solicitors are instructed to negotiate the settlement proceedings can become costly. Negotiation is usually carried on up till the last moments before courts action is started but a worrying aspect is the number of cases which drag on for years only to be settled on the morning the trial is due to start.
The aim of negotiation is to decide what each side wants so as to avoid going to court and straining relations. It is designed to save costs in terms of time and money, but if unsuccessful then the whole process is a waste as court proceedings begin. If successful however parties can speedily compromise on the solution saving resources and maintaining a good relationship. Negotiation should be considered by every party before court action is commenced as a civilized means of agreement. Negotiation is usually considered a good first step and more than 9 out of 10 legal claims are settled without a trial.
This is a modern form of dispute resolution which is quite informal and is an attempt to bring the parties together to find common ground with the help of a neutral mediator. As the system is not adversarial but with the two parties working together to find a solution, the process is less traumatic and commercial or personal relationships can be maintained.
The mediator will explore the positions of the two parties going between them carrying offers in confidentiality. The mediator will not tell the parties of his opinions and will act as a facilitator so that the parties reach an agreement. Mediation will only work if there is a hope that the parties will cooperate.
Mediation has advantages over the courts that decisions will not be strictly legal and is more likely to be based on common sense and compromise. It will make it easier for future business, which canít happen in the courts that are only concerned with the present dispute. The maintaining of relations is helped because there is no winner looser scenario, which result in the courtroom.
The main disadvantage of the mediation process is that there is no guarantee the matter will be resolved and the parties may have to go to court to settle. There now is an added cost and delay through the failed mediation process. However mediation can be used aswell as going to court to narrow down the issues that divide people and make it easier for you to reach an agreement or for a judge to make a decision.
Conciliation involves bringing the parties together in an informal setting to try and find a way, which their dispute may be reso
lved. It has similarities with mediation in that a neutral third party to help resolve the dispute.
The difference is the more active role this conciliator plays. He will suggest grounds for compromise and the possible basis for a settlement. Conciliation does not always lead to an agreement and the dispute may have to be continued in court.
This is sometimes described as the private version of going to court. The parties agree to submit their claims to private arbitration, which is another way of resolving a dispute without going to court. Arbitration is the voluntary submission by the parties of their dispute to the judgment of an arbitrator. This process is so flexible that the precise way which arbitration is carried out is left almost entirely to the parties to agree.
In many commercial or business contracts the parties insert a clause stating that in the event of a dispute the matter will be referred to arbitration in the hope of avoiding litigation, this is called a Scott v Avery clause. The parties can agree on the number of arbitrators whether one two or three. There are many forms of hearing as the actual procedure is left to the parties.
Arbitration is extremely flexible with the date, time and place for all matters for the parties to agree whilst consulting the arbitrator. The arbitrators decision is called an award and is a binding agreement which can be enforced through the courts. There are several advantages from the court procedure, because the parties can choose their own arbitrator and decide whether a technical expert, lawyer or professional arbitrator is most appropriate and should be appointed. However if in a court set up time would be wasted explaining the technicalities of a point to a judge whereas in arbitration an expert could decide. It is also better having the technical expert making the decision than a judge who may have little or no knowledge in the subject matter. Arbitration can be personalized to the specific case, which makes each unique. The time and place is arranged to suit both parties unlike being given a date by a court and having to attend. It also has the advantage over a court proceeding of speed and privacy, because unlike a court setup its not open to the public. It will not amount to the large costs of going to court and the award will be enforced through the courts.
Arbitration too has its failings, because legal aid is not available it may disadvantage an individual in a case between a business. If this was taken to court, a person on a low income would have been entitled to legal aid. If an unexpected legal point arouse it would not be suitable for a non lawyer arbitrator to decide. Professional arbitrators are expensive and a formal version of arbitration would be expensive with witnesses and lawyers representing both sides. The rights of appeal under arbitration are limited and the delays for commercial and international arbitration may be nearly as great as those in the courts if a professional arbitrator and lawyers are used.
Arbitration has lost its popularity with companies as a method of ADR due to the problems of delay and expense but Arbitration is ideal in commercial disagreements between two companies where there is little hope of using mediation and provided there is no major point of law involved.
Ombudsmen are independent referees who look at complaints about public and private organizations, they are often a last resort when problems canít be sorted out through an organizations own complaints procedure. Ombudsmen are free to use and wonít consider your complaint unless you have first used the complaints procedure of the organization you have a problem with. They make decisions that are not binding so you are free to go to court or use another dispute resolution process if you are not happy with their decision. Each Ombudsman has responsibility for their own area of concern dealing with issues of maladministration. Ombudsman do not have the power to deal with individual complaints and canít be approached directly by an individual. Their role is to investigate the way in which such a complaint was originally dealt with. Referrals can only be made through an MP or local councillor. The ombudsmen have little real power and are only able to report on an issue rather than interfere with the out come of the case. However their reports carry considerable weight and can lead to changes.
The civil process too has its advantages and disadvantages, it has strict time limits and procedures although this doesnít suit all disputes parties can be prepared and so know what to expect. It also has the strengths of legal representation so professional assistance can be taken in preparing and representing cases. The use of precedent unlike any of the mentioned methods of arbitration provides certainty for making settlements, there are effective methods of enforcement and a clear route of appeal.
The court process weaknesses include its formality which could ruin business relationships and simple disputes can become complex court cases. Although, with to legal aid all people have access to legal advice, legal representation is slow, formal and expensive and there will be imbalance between the two sides. The precedent can be too rigid which could lead to individual injustice and the appeal routes are slow and expensive.
The failings of the court process created the need for alternatives. It can be slow, expensive, inconvenient and inaccessible so the alternative methods of resolution are available and provides justice for many people who may not have access to the courts.
The process of negotiation seems very sensible especially for minor disputes where it isnít necessary for a full on court battle and where high costs and wasted time are avoided. The parties can sit down and find common ground and attempt to resolve the argument, this is all before court so litigation can still take place but at least it attempts to avoid it.
Mediation is slightly more complex with a neutral third party helping to reach a compromise solution and in conciliation the conciliator will play more of an active role in resolving the dispute. Arbitration involves an actual hearing in which the parties present their sides to the arbitrator. The arbitrator is the key to the process and can be chosen by the parties. Tribunals are not a court alternative as they are used in different situations and canít be linked with each other.
The courts have been solving disputes for decades whereas these methods of resolution are relatively new. They are all for different situations and would be used for different reasons. All ADR methods require the parties to have contact with each other enough to agree on the many points for the arrangements. If theyíve had a large dispute It is difficult to imagine them meeting up and agreeing on the points. Court is for the most serious and complex issues but to go there it will require a sacrifice of money and time. The courts are encouraging the use of these alternatives but they need to make more people aware of the efficiency and effectiveness of them as a dispute settling process. All people applying to go to court should give mediation or negotiation a try to explore the severity of the argument. Disputes should not be allowed to be processed unless a form of ADR has been tried. This would save time and money and at the same time speed up the courts as less claims would be brought.
You can get different things from going to court than from Alternative Dispute Resolution, from going to court you might get an order that something be done or stopped, compensation or a judgment from the court about who is right and who is wrong. But by using ADR you might get a change in the way a person or organization behaves, an apology, an explanation, a mistake corrected, compensation, something fixed or a promise a person or company wonít do something. For all ADR cases both sides must be willing to take part in the process and if the other side is not willing to take part it wonít be possible, unlike the courts were both parties have to attend.
February 2003