Alternative Dispute Resolution

The term Alternative Dispute Resolution (ADR) is used to describe structured methods for resolving disputes without going through a formal court-based hearing. In these procedures, the concept of "success" can have a range of possible meanings and be measured in many different ways. The culture of litigation predisposes participants to be satisfied with a "win" before the judge, but this assumes that the winning party always gets all that he or she wanted. More often than not, ambition or greed comes unstuck and the judge imposes a more realistic set of outcomes, representing a more fair and reasonable balance between the parties than perhaps the "stronger" party would have preferred.

In both ADR and court cases, it is always possible to measure settlement rates and to ask the parties whether they are satisfied. But it is difficult to compare ADR with litigation because it is not clear what each aims to achieve, and so comparing outcomes is problematic. In theory, both systems exist alongside each other to allow all parties to a dispute to obtain a satisfactory result. But litigation is inherently adversarial. It is aimed at producing a "winner" from the pack of parties, whereas ADR is more consensual and is probably better suited to achieving a more balanced result between the parties. Thus, whereas a survey of the parties’ attitudes after an exercise in litigation might find a strongly polarised reaction between satisfaction and dissatisfaction, more ADR participants often find greater satisfaction over time.

This is not to say that those engaged in litigation do not settle their cases before trial. They do. But the problem lies in the culture. Once engaged in litigation, parties can become more entrenched in their confrontational attitudes because their advisors insist on being the only ones to communicate. Clients are told that they might inadvertently say or admit something that might prejudice their cases. So all the usual dialogue between the parties that might otherwise have taken the tension out of the situation is cut off, leaving the parties to rely on their lawyers’ skills to "win the day".

ADR, on the other hand, begins with the premise that the best solution is likely to be the one negotiated by the parties and offers mediation and conciliation to help them to do it. If greater intervention seems appropriate, the power of the intermediary to impose a settlement can be ratcheted up. But this option never loses sight of the right of the parties to settle the case themselves. So Expert Determination and Arbitration can always be suspended in favour of mediation if the parties wish. ADR seeks to restore and then build on the goodwill that first encouraged the parties to enter into their contract. Commerce has always relied on trust and the willingness to compromise in the interests of maintaining trading links. Experience shows that long-term relationships are better than winner/loser situations which sour relationships.