Around the World in 80 ideas

Around the World in 80 Ideas

PUBLIC ADMINISTRATION
71: Judgement day:
Alternative dispute resolution

The problem: costly, congested courts

All over the world, public court systems are under pressure. This can mean lengthy delays for litigants, which increases the worry, frustration, and cost for both sides in a dispute.

The idea: alternative resolution

Angered by the red tape of the public courts, people entering into contractual agreements in the United States began searching for ways to by-pass the courts and resolve any disputes between them more quickly and more cheaply. Before long, specialist dispute-resolution services arose to service this need. About 60,000 cases a year in the US are now handled through alternative dispute resolution - ADR - including industrial, commercial, environmental, and even international disagreements.

Example: private arbitration

The rapid growth of ADR started in 1925 when Congress passed the Arbitration Act. The American Arbitration Association was born a year later, but there are a number of other provider bodies, such as the National Institute for Dispute Resolution.

Most private ADR services follow a fairly simple procedure. First, the parties contact each other and agree to work through ADR rather than the courts to resolve their disagreement. Together with the ADR service they choose the kind of process they want, an objective neutral intermediary, and a timetable. They sign a confidentiality agreement to ensure that the maximum amount of information is divulged to the mediator, and agree to share costs and accept the outcome.

The exact process can take many forms, such as: · conciliation, in which the intermediary merely tries to bring the disputants back to agreement; · mediation, in which the intermediary proposes terms for a settlement; or · a tribunal, in which each side puts its case through lawyers and the intermediary sits as a judge. Again, the parties can decide how formal they wish to be: whether judgement will be made on the basis of documentary submissions only, or on oral hearings, or after private meetings with the intermediary.

Quite often, ADR intermediaries tend to be retired judges or lawyers who have experience in arbitration procedures.

The existence of quicker and lower-cost ADR options has caused the public courts in the US to adopt some of the same approaches. Thus courts may mandate the use of out-of-court arbitration before agreeing to schedule a trial date; or they may set up a mock jury to hear the arguments informally, in a non-binding and private forum, in the hope of reaching a decision without the need for a trial.

Using ADR does not preclude the losing parties from going to the public courts if they still feel that they have not reached a just settlement, though it may colour the opinion of the courts. In some jurisdictions, ADR is treated as the first, lower court, so that any continuing dispute about the decision can be taken straight to the appeal courts - reducing duplication and cost all round.

The ADR principle is becoming accepted in other countries too. In the United Kingdom, which has had a Chartered Institute of Arbitrators since 1915, it handles everything from highly emotional personal disagreements to complex and technical multi-party international disputes.

Also in the UK, the recent Woolf report on the legal profession proposed that British lawyers should point out to clients where ADR might serve them better than the courts, and judges now have power to stay court proceedings where ADR is in progress. Meanwhile, government departments are testing or encouraging ADR for procurement, planning, employment, and other disputes. The UK's Housing Ombudsman, for example, uses the Centre for Dispute Resolution as an independent mediation service.

Assessment: better justice

The benefits of ADR to people in a dispute are clear. Because they can decide their own rules of evidence, and because they can scrap the need for juries and for serried ranks of lawyers, the whole thing is very much cheaper.

Traditional systems result in the disputants losing control of the process and becoming frustrated and dissatisfied. ADR keeps them in control, creates a safe negotiating environment, and cuts short a costly - and often unpredictable - process.

And as business becomes more globalized, complex, and fast-moving, the public courts are often simply not up to the job. ADR offers a truly global decision-making system that can resolve disputes quickly so that international businesses can quickly get back to their principal functions.

For further information:

Thierer, Adam (1992) Judgement Day, London: Adam Smith Institute.
The Centre for Effective Dispute Resolution has a useful website at www.cedr.co.uk, as does the American Arbitration Association (www.adr.org) and the Chartered Institute of Arbitrators UK (www.arbitrators.org).
Other interesting websites include the Hong Kong International Arbitration Centre at www.hkiac.org, the Singappore International Arbitration Centre at www.siac.org.sg and that of the Dispute Resolution Centre of Massey Unviversity, New Zealand at www.gsb.massey.ac.nz.