ZAFAR & ASSOCIATES - LLP | Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) refers to any means of settling disputes outside of the courtroom typically includes arbitration and mediation.

Alternative Dispute Resolution (ADR) or external dispute resolution (EDR) refers to any means of settling disputes outside of the courtroom, ADR / EDR typically includes early neutral evaluation, negotiation, arbitration, mediation and conciliation, public courts may be asked to review the validity of ADR methods but they will rarely overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them.

The phrase "alternative dispute resolution," or "ADR," is frequently used to denote a wide range of dispute settlement techniques that are either less formal or less formal than traditional judicial proceedings. The word can apply to anything from assisted settlement negotiations, in which disputants are urged to engage directly with each other prior to engaging in any other legal process, to arbitration systems or minitrials that resemble courtroom proceedings. Processes aimed at reducing community conflict or facilitating community development can also be included under the ADR umbrella. Negotiation, conciliation/mediation, and arbitration systems are the three types of ADR systems.

Negotiation systems provide a framework for encouraging and facilitating direct negotiation between disputants without the need for a third party. Mediation and conciliation methods are similar in that they include a third party to mediate a specific issue or reconcile a relationship between disputants. Mediators and conciliators may simply facilitate dialogue or assist in the direction and form of a settlement, but they do not have the right to make a decision or rule on one. Arbitration systems allow a third person to decide how to resolve a dispute.

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It's crucial to understand the difference between binding and non-binding ADR. Negotiation, mediation, and conciliation programmes are non-binding and rely on the parties' willingness to achieve an agreement on their own. Arbitration programmes might be either legally binding or not. Binding arbitration results in a third-party ruling that the parties must abide by, even if they disagree with the outcome, similar to a judicial decision. Arbitration is a non-binding process that results in a third-party decision that the parties can accept or reject.

It's also crucial to understand the difference between mandatory and voluntary processes. Prior to going to court, several judicial systems require litigants to negotiate, conciliate, mediate, or arbitrate. Parties may also be required to use ADR as part of a prior contractual arrangement. Submission of a dispute to an ADR process is totally dependent on the parties' will in voluntary processes.

Advantages of using ADR

1. Increase popular satisfaction with dispute resolution

The approach to ADR methods is more professional and diplomatic as compared to litigation, it preserves the relationship of both of the parties and settle on the result which is fair to both, it doesn’t produce an “all or nothing” end-result. This also curbs antagonistic behavior of the disputed parties as both are committed to achieve a “peaceful resolution” by cooperating in good faith to attain just results.

2. Increase access to justice for disadvantaged groups

Dispute resolution is an important aspect of justice, which has significantly improved access to justice as one of the main objectives of ADR is to facilitate the justice needs of poor and the disadvantaged groups, this also helps to counterbalance the effect of power imbalances between the parties. This is also justice in relation to equality of access and equitable outcomes.

3. Reduce delay in resolving disputes

Due to the immense influx of cases in courts, which opens floodgates of litigation, this phenomenon can delay the time of the case being presented before the courts, whereas ADR is a speedy remedy to resolve disputes without the hassle of time-consuming court hearings. According to the American Arbitration Association, U.S. District Court cases took 12-16 months longer to get to trial than cases using arbitration.

4. Reduce the cost in resolving disputes

ADR compared to litigation is less expensive since, a trial requires various steps to be taken such as the attorney/expert fees and other miscellaneous expenses associated with a trial, it avoids the formalities and complexity of litigation. The disputed parties can further save costs by getting the case resolved earlier through the process of ADR, as supposed to when bringing a case to court.

5. Support and complement court reform

Where no settlement can be found, the process of ADR promotes early resolution of disputes, this can aid to reduce case backlog and complex procedures which adversely affects court effectiveness, this area can be managed by using ADR and lessen the existing caseload therefore, increasing the overall efficiency of courts.

6. By-pass ineffective and discredited courts

As mentioned earlier above, ADR can help reduce delay in resolving disputes by avoiding the inconvenience of a traditional litigation procedure, ADR can assist parties to settle their disputes earlier by choosing arbitration or mediation. There is no need to include jury and courtrooms, moreover, since there is no involvement of litigation and courtrooms, the involved parties have a choice to keep all the proceedings and outcomes confidential.

7. Flexible resolution of disputes

The nature of ADR is flexible, ADR methods can be altered to the specific needs of each party, this also gives greater control to the disputed parties over the situation and allows for direct participation, for example, how the dispute should be resolved? This leverage of ADR gives the parties an outcome of their preference which best-fits them according to the situation at hand.

Disadvantages of using ADR

1. ADR is unable to address unfairness, discrimination, and human rights violation

It is argued that the individualized form of the complaint procedures, combined with the confidentiality of arbitration results, limits the potential for social reform of human rights and anti-discrimination laws. This method can sometimes be unfair as a compromise is expected from each party, which leads naïve and ill-informed parties to make decisions against their interests, if unjust conclusions are reached, it can’t be appealed, unless a there is an appeal process in the written agreement, in very limited circumstances a binding ADR procedure lacks the ability to appeal the decision, the essence of this makes it unfair for the disadvantage party. ADR reflects the social norms of the society, which can also include discrimination against specific groups, if the social norms are upheld then this discrimination can’t be avoided.

2. Resolving disputes between parties with power imbalances

One of the most prominent limitations of ADR methods are of power imbalances, in a seminal article, Owen Fiss argued that ADR exacerbates imbalances of power between the parties. The party with more monetary resources and power will usually have more benefit over a disputed party who doesn’t have sufficient finances, this imbalance gives an advantage to the party with more, leading to unjust outcomes as ADR systems do not include legal or procedural protections for weaker parties.

3. Resolve situations requiring public penalty

The results of ADR programs are private, ADR programs are not suitable for cases that should result in official sanctions or penalties. Especially for violent and repeat offenders. So, the interests of society and individuals may be better served by court-sanctioned punishments such as imprisonment.

4. Defining, refining establishing and promoting a legal framework

Courts usually rely on years of judicial precedent to determine and guide the outcome of the process, In the case of ADR case law is merely suggestive which is based on the social norms and what is “fair” and “reasonable” in the eyes of society. In addition to this ADR results are private and rarely published if there is a separate judicial mechanism that defines, codifies and protects appropriate standard of justice, ADR programs can resolve local disputes which are relatively smaller however in disputes where clear and normative standards have not been established, ADR may not resolve the power imbalance or the underlying normative disagreements between the parties at dispute. Furthermore, this can be a stalling tactic too since, the process isn’t binding.

5. Parties who refuse or are unable to participate in ADR processes

It is argued that ADR techniques such as mediation are well-suited for resolving international investment disputes because they are accessible to the stakeholders abroad in developing countries where traditional courts such as civil courts may not be available or competent enough, however, ADR may not be appropriate for public and private multi-party disputes if all stakeholders can’t be involved in the process as all the interested parties can’t be involved in the process.

Alternative Dispute Resolution Services in Pakistan

ZA-LLP has provided alternative dispute resolution services throughout the Pakistan since 1975 through its team of professional arbitrators, mediators and training staff, and providing a wide range of dispute resolution services to the legal community, insurance industry, private businesses and government agencies across the country.

Services available through ZA-LLP include arbitration, mediation, settlement conferences, neutral fact-finding, statutory discharge hearings, grievance-based hearing procedures, mini-trials, class action administration, dispute resolution system design and consulting, negotiation skills, conflict management and mediation training, and discovery management.

Characteristics of ADR Approaches

Despite the differences in characteristics between negotiated settlement, conciliation, mediation, arbitration, and other forms of community justice, they all share a few fundamental qualities that distinguish them from the formal judicial framework. These features enable them to meet development goals in a different way than judicial systems.

Informality

ADR procedures are, in general, less formal than judicial procedures. In most cases, there are no formal pleadings, comprehensive written record, or rules of evidence, hence the rules of procedure are flexible. This informality appeals to certain people and is vital for broadening access to dispute resolution for others who are scared or unwilling to participate in more official processes. It's also crucial for lowering the time and expense of resolving disputes. The majority of systems function without any kind of formal representation.

Application of Equity

ADR programmes, on the other hand, are tools for applying equity rather than the rule of law. Each case is adjudicated by a third party or negotiated between disputants themselves, depending on principles and terms that appear equitable in the given situation rather than consistently applied legal norms. ADR procedures are unlikely to set legal precedent or bring about changes in law or social standards. ADR methods are more likely to achieve efficient settlements at the price of fairness and consistency.

The disadvantages of an informal approach to justice may not be significant in cultures where large segments of the people do not obtain any genuine measure of justice within the formal legal system. Furthermore, the broader justice system can reduce the concerns by ensuring that disputants have access to formal legal safeguards if the informal system's resolution is unjust, and by reviewing the informal system's outcomes for consistency and fairness.

Direct Communication & Participation between the Disputants

Other characteristics of ADR systems include greater direct participation by disputants in the process and in designing settlements, more direct dialogue and for reconciliation between potentially higher levels of confidentiality because public records are not typically kept, greater flexibility in designing creative settlements, less power to subpoena information, and less direct power of enforcement.

Even in the United States, where ADR procedures have been utilised and studied more extensively than in most developing countries, the influence of these traits remains unclear. Many contend, however, that negotiated and mediated settlements achieve higher levels of compliance and satisfaction than court-ordered rulings. Higher reported rates of compliance and satisfaction appear to be due to disputants' participation in the settlement choice, the potential for reconciliation, and the flexibility in settlement design.

Goals and Possible Uses of ADR

ADR systems can be tailored to achieve a wide range of objectives. Some of these objectives are directly tied to enhancing the administration of justice and resolving specific conflicts. Some, on the other hand, are tied to other development goals, such as economic restructuring or community management of tensions and disputes. For example, an AID mission's dedication to improving the rule of law may make finding an effective, consensual means to resolve land disputes vital, not because land conflicts endanger the country's social and economic stability. Similarly, where judicial delays or corruption stymie foreign investment and economic restructuring, efficient dispute resolution procedures may be important to achieving economic development goals.

ADR programmes can help with the following in the context of rule of law initiatives:

• Increase popular satisfaction with dispute resolution

• Increase access to justice for disadvantaged groups

• Reduce delay in resolving disputes

• Reduce the cost of resolving disputes

• Support and complement court reform

• By-pass ineffective and discredited courts

• Increase popular satisfaction with dispute resolution

ADR programmes can help communities:

• Increase civic engagement and create public processes to facilitate economic restructuring and other social transformation

• Help lessen tension and conflict in a community

• Manage disputes and conflicts that may directly hamper development initiatives

The Limitations of ADR

While ADR programmes can be beneficial in many development endeavours, they are ineffectual, if not downright harmful, in achieving particular goals connected to rule of law projects. ADR, in particular, is ineffective for:

Defining, refining, establishing, & promoting a legal framework

Alternative Dispute Resolution (ADR) programmes do not establish precedent, develop legal norms, or establish wide community or national standards, nor do they encourage the uniform application of legal principles.

Address systemic unfairness, discrimination & human rights violations

ADR programmes are unable to address systematic unfairness, discrimination, or human rights violations.

Resolve disputes between parties with vastly different degrees of power and authority

When there is a significant power imbalance between the parties, ADR systems do not work well.

Resolve situations requiring public penalty

Alternative Dispute Resolution agreements have no educational, punitive, or deterrent effect on the public.

Resolve issues involving disputants or interested parties who refuse or are unable to participate in the ADR process

Using ADR to resolve multi-party issues in which some of the parties or stakeholders do not engage is incorrect. Alternative Dispute Resolution may jeopardise other judicial reform efforts.

Conclusion

ADR programmes can help to achieve a variety of goals related to the rule of law and other aspects of development. ADR programmes that are well-designed and implemented under the right circumstances can help support court reform, expand access to justice, boost disputant satisfaction with outcomes, minimise delay, and lower the cost of resolving disputes. ADR programmes can also aid in the preparation of community leaders, the promotion of civic engagement, the facilitation of public processes for managing change, the reduction of community tension, and the resolution of development conflicts.

Informal ADR systems have the advantage of being less expensive and frightening for underprivileged populations, resulting in increased access to justice for the poor. These systems are also less expensive for the state and may be more easily put in areas where underserved populations can benefit. Based on current statistics, it is impossible to fully assess ADR's capacity to enhance access or its cost in comparison to formal legal procedures. This inability to correctly measure the impact does not, however, imply that it is not apparent or substantial.

Although ADR programmes can do a lot, no single programme can achieve all of these objectives. They can't take the place of formal judicial systems, which are required to establish a legal code, address fundamental social inequality, offer governmental sanction, and serve as a court of last resort for disputes that can't be handled by voluntary, informal means.

Furthermore, even under ideal settings, even the best-designed ADR programmes are labour-intensive and require substantial management.

When contemplating the potential effects of ADR, there are a number of issues to consider. For starters, some people are afraid that ADR programmes may cause citizens to abandon conventional, community-based dispute resolution processes. This research discovered a number of examples of ADR programmes that effectively built on, and in some cases improved, previous informal methods. Second, while ADR programmes are incapable of resolving disagreements between parties with vastly different levels of power, they can be constructed to ameliorate class discrepancies; for example, third parties can be used to balance out inequalities between disputants. Third, there is no evident link between ADR efficacy and national income distribution. In economies as different as the United States, Bangladesh, South Africa, and Argentina, ADR programmes provide essential social functions.

Finally, the evidence to date does not indicate whether ADR programmes are better suited to civil or common-law jurisdictions. ADR programmes are beneficial in both, but there is insufficient evidence to compare success rates under the two legal systems.

While previous and current ADR efforts have contributed valuable insights into ADR, there is still plenty to learn. More research is needed into the various techniques for employing alternative dispute resolution to support judicial reform, minimise power imbalances, and overcome discriminatory norms among disputants. Another key topic for research is how ADR programmes can be copied and scaled up to the national level while still preserving adequate human and financial resources.

Only by assessing evidence acquired from ADR projects can these and other questions concerning ADR's effectiveness be adequately answered. In both developing and established countries, effective monitoring and evaluation of ADR systems is difficult to come by. Systematic monitoring and evaluation methods should be in place for current and future ADR programmes to guarantee that not only effective programs, but also continued learning.

ADR's ability to achieve development objectives other than the rule of law is mentioned in this Guide, such as encouraging economic, social, and political transformation, lowering community tension, and handling conflicts that stymie development projects. To provide a full understanding of the extent of ADR's applications, more research into non-rule of law applications is needed. Development experts and anyone seeking to understand the strengths and limitations of ADR programmes in developing and transitional cultures would benefit greatly from more in-depth research and analysis in this area.

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