Dr.

SHAKUNTALA MISRA NATIONAL REHABILITATION

UNIVERSITY
Lucknow
Faculty of Law

RESEARCH Alternative Dispute Resolution, advantage & disadvantage and its

features

PROJECT ON

For

COURSE ON “Alternative Dispute Resolution, advantage ”

SUBMITTED BY- SUBMITTED TO-

Roopam singh Dr. Shail Shakya
B.Com. LL.B/15-16/4 FACULTY OF LAW
Roll No. – 154140041

ACKNOWLEDGEMENTS

I would like to express my special thanks of gratitude to my teacher Dr.

Shail Shakya who gave me the golden opportunity to do this wonderful
project on the topic Alternative Dispute Resolution, advantage & disadvantage ”l ,
which also helped me in doing a lot of Research and I came to know about so
many new things I am really thankful to them.
Secondly, I would also like to thank my friends & Parents who helped me a
lot in finalizing this project within the limited time frame.
Table Of Contents
 Introduction
 Definition of ADR
 Types of ADR:
 Advantages to Arbitration:
 Disadvantages of ADR:
 Conclusion:
 Bibliography:
 Introduction

Other than court system there are other ways in which disputes can be solved.
Disputes often happen every now and then so it is very important that it should
be handled carefully. Judgment is very important in this world and proper
judgment is very effective. One judgment can change the whole situation around.
Similarly judgment can change the life of a person completely. It can take away
someone’s respect and then again can give a person the deserved respect. The
word “dispute” means “disagreement” and the word “resolution” means “the
action of solving something.” Alternative dispute resolution is a form of
agreement. Alternative dispute resolution consists of a variety of ways to dispute
resolution. In many of these approaches there is a neutral individual who assists
disputing parties in resolving their disagreements. ADR increases the parties’
opportunities to resolve disputes prior to or during the use of formal
administrative procedures and litigation. It is not intended to replace the
traditional approaches and it can provide a long term solutions to employee-
employer conflicts through stakeholder’s participation and buy-in. It is at times
very helpful when it comes to making judgment. At times it is very helpful then
again it does have some flaw backs

Definition of ADR

Alternative Dispute Resolution includes alternative methods of helping people

resolve legal problems before going to court. There is an involvement in of an
independent third person, called a “neutral” who tries to help resolve or narrow
the areas of conflict in ADR. Alternate Dispute Resolution means the wide variety
of methods by which conflicts and disputes are resolved other than through
litigation.Alternative Dispute Resolution refers to any means of settling disputes
outside of the courtroom. ADR typically includes early neutral evaluation,
negotiation, conciliation, mediation, and arbitration. As burgeoning court queues,
rising costs of litigation, and time delays continue to plague litigants, more states
have begun experimenting with ADR programs. Some of these programs are
voluntary; others are mandatory.
Types of ADR:

There are four forms of ADR:

 Mediation
 Arbitration
 Negotiation
 Conciliation

Mediation

The most popular form of ADR is mediation. Mediation is a process of dispute

resolution focuses on effective communication and negotiation skills. The
mediator role is to help the parties in communicating and negotiating more
effectively, thereby enhancing their ability to reach a decision. It is not the
mediator’s role to adjudicate the issues in dispute and indeed the mediator has
no right to do so. Mediation is not a process to force compromise, although
compromise is an element of the process. Each party’s limitations are respected
and a party is only expected to make a change in its approach to the problem if it
becomes convinced that it is reasonable to do so. Today mediation is the most
fast growing form of ADR. It is being used in almost every conceivable type of
dispute resolution and comes in different forms. The process has also been
effectively adapted for multiple party dispute resolution with tremendous
success. On average the success rates of mediation processes range from 80% to
85%. In an attempt to capitalize on the success rates, legislation is slowly being
amended to include provisions for mediation of disputes.

The advantages of mediation are many. Some of the benefits mediation offers
include:

 Effective Process: Mediation generally enjoys an 80%-85% success rate.

 Better Results: The resolution is created by the parties.
 Speed: Mediation is focused in resolving the problem quickly.
  Cost: Mediation is not expensive.

Act of mediation in divorce

Mediation plays an important role in family matters. When it comes to solving

divorce cases, mediation has been used to enable both parties to work out an
agreed settlement rather than having one of them imposed outside by the court.
The importance of mediation was supported in the Family Law Act 1996, but it is
important to rectify that there are some potential problems regarding mediation.
In marriage management, mediation is to be provided on a funded basis, by the
Legal Aid Board. Mediation will not to be accepted until and unless it appears to
be suitable for the case. There is a Code of Practice which must keep the chances
of understanding under review throughout the mediation and let clients know
about the availability of the independent legal advice. Mediation is to be offered
at a primary stage in the new process. This will be done by inviting the party filing
in the Statement to come and attend a meeting with a mediator to see whether
advantage can be taken of the facility or not. The court will be able to postpone
proceedings for the meeting with the mediator so that the court may be informed
whether the appointment was held and whether mediation will be used. It
remains to be seen whether the introduction of mediation will be a success story.
While debate in the House of Commons rumbled on to the effect that ‘it is better
to have mediation than to have lawyers arguing about costs’, in the House of
Lords it was noticed that success depends very much on the qualities and
background experiences and training of the mediator.

Arbitration

Arbitration is a process for the resolution of disputes on a private basis through

the appointment of an arbitrator, an independent, neutral third person who hears
and considers the qualities of the dispute and renders a final and binding decision
called an award. The process is similar to the litigation process as it involves
adjudication, however, the parties select their arbitrator and the manner in which
the arbitration will proceed. For example, if the dispute is fairly straightforward
and does not involve any factual questions, the parties may agree to waive a
formal hearing and provide the arbitrator with written submissions and
documentation only, called a documents only arbitration, whereas in other cases
the parties may wish a full hearing. Therefore, the parties create their own
adjudicatory forum which is tailor made to the particular needs of the parties and
the nature of the dispute.

The advantages of arbitration over court adjudication can include the following:

 Expertise of the Decision-Maker: The parties can choose an arbitrator who

has expert knowledge of the law, business or trade in which the dispute has
arisen.
 Low Cost: Arbitration is not expensive if the process is kept simple.
 Speed: Arbitration can be arranged quickly and does not take time as long
as litigation.

Negotiation

Settlement is the primary way people adjust dispute, alter ownership, and
rearrange their relationships. Because we reach settlements by negotiating,
bargaining pervades personal, commercial, social and politica The simplest form
of Alternative Dispute resolution. Where both parties have a dispute they can
negotiate a solution themselves. There is no third party of middle man who
facilitates the resolution process or imposes a resolution. Negotiation can also be
defined as: a non-binding procedure involving direct interaction of the disputing
parties where in a party approaches the other with the offer of a negotiated
settlement based on an objective assessment of each others position.

Conciliation

This is very much similar to mediation where a neutral third party helps the
parties resolve their dispute. The conciliator plays a more active role in the
process. Conciliation is not legally binding on the parties.

Advantages to Arbitration:
1. More flexibility. In the case of arbitration, the parties have far more flexibility

to select what procedural and discovery rules will apply to their dispute (they can
choose to apply relevant industry standards, domestic law, the law of a foreign
country, etc.).

2. Select your own Arbitrator or Mediator. The parties can often select the

arbitrator or mediator that will hear their case, typically selecting someone with
expertise in the substantive field involved in the dispute. The arbitrator (or panel
members) need not even be an attorney. In this way the focus can be on the
substantive issues involved rather than on technical procedural rules. In normal
litigation, the parties cannot select the judge, and the judge and/or jury may often
need expert witnesses to explain extremely complex issues. The greater the
expertise of the arbitrator, the less time that needs to be spent bringing him up to
speed.

3. A jury is not involved. Juries are unpredictable and often damage awards are
based solely on whether they like the parties or are upset at one party because of
some piece of evidence such as a photo that inflames the passion of the jury.
Juries have awarded claimants damages that are well above what they would
have received through alternative dispute resolution; and they have also done the
opposite.
4. Expenses are reduced. Attorneys and expert witnesses are very expensive.
Litigating a case can easily run into the tens of thousands of dollars. Alternative
dispute resolution offers the benefit of getting the issue resolved quicker than
would occur at trial – and that means less fees incurred by all parties.

5. ADR is speedy. Trials are lengthy, and in many states and counties it could take
years to have a case heard by a judge or jury. Appeals can then last months or
years after that. In a matter of hours, an arbitrator often can often hear a case
that otherwise may take a week in court to try with live witnesses. With
arbitration, the evidence can be submitted by documents rather than by
testimony presented through witnesses. ADR can be scheduled by the parties and
the panelist as soon as they are all able to meet together.

6. The results can be kept confidential. The parties can agree that information
disclosed during negotiations or arbitration hearings cannot be used later even if
litigation ensues. The final outcome can also be made private if the parties so
stipulate and agree. On the other hand, most trials and related proceedings are
open to the public and the press.

7. Party participation. ADR permits more participation by the litigants. ADR allows
the parties the opportunity to tell their side of the story and have more control
over the outcome than normal trials overseen by a judge. Many parties desire the
opportunity to speak their piece and tell their side of the story in their own words
rather than just through counsel.

8. Fosters cooperation. ADR allows the parties to work together with the neutral
arbitrator or mediator to resolve the dispute and come to a mutually acceptable
remedy.

9. Less stress. ADR is often less stressful than expensive and lengthy litigation.
Most people have reported a high degree of satisfaction with ADR.

10. Conclusion. Because of these advantages, many parties choose ADR (either
mediation or arbitration) to resolve disputes instead of filing or even proceeding
with a lawsuit after it has been filed. It is not uncommon after a lawsuit has been
filed for the court to refer the dispute to a neutral before the lawsuit becomes too
costly. ADR has also been used to resolve disputes even after trial, while an
appeal is pending.

Disadvantages of ADR:

1. There is no guaranteed resolution. With the exception of arbitration, alternative

dispute resolution processes do not always lead to a resolution. That means it is
possible that you could invest the time and money in trying to resolve the dispute
out-of-court and still end up having to proceed with litigation and trial before a
judge or jury. However, you will certainly better understand the other side’s
position!

2. Arbitration decisions are final. With very few exceptions, the decision of a
neutral arbitrator cannot be appealed, with fraud being an obvious exception.
Additionally, some states will not enforce decisions of arbitrators that are
patently unfair, a high standard to meet. Another ground for setting aside an
award is if the arbitrator’s decision exceeded the scope of the arbitration clause
or agreement. Some arbitration clauses are broad, others are narrowly limited to
specific disputes. Decisions of a court, on the other hand, usually can be appealed
to an appellate court for a variety of legal grounds and for numerous alleged
procedural errors.

3. Limits on Arbitration Awards. Arbitrators can only resolve disputes that involve
money. They cannot issue orders compelling one party to do something, or
refrain from doing something (also known as injunctions). For example,
Arbitrators generally cannot change title to real property. Of course this is subject
to the specific language of the arbitration clause.

4. Discovery limitations. Some of the procedural safeguards designed to protect

parties in court may not be present in ADR, such as the liberal discovery rules
used in U.S. courts, which make it relatively easy to obtain evidence from the
other party in a lawsuit.
5. Fee for the Neutral. The neutral mediator or arbitrator charges a fee for his or
her services. Depending on the arbitrator or mediator selected, the fees can be
substantial (of course the parties typically agree to divide the fees between
themselves). Depending on the contract language and state law, a prevailing party
can be awarded fees and costs. A judge on the other hand, charges no fees for his
services.

6. May have no choice. Often the contract in dispute contains a broadly worded
mandatory arbitration clause. Many lease agreements and employment
contracts, for example, contain mandatory arbitration provisions, as do operating
agreements and other types of business contracts. Unless both parties waive
arbitration, most states will compel arbitration at the request of any party.

7. Non-binding arbitration. Sometimes the court may order nonbinding or Judicial

Arbitration. This means that if a party is not satisfied with the decision of the
arbitrator, they can file a request for trial with the court within a specified time
period after the arbitration award. Depending on the process ordered, if that
party does not receive a more favorable result at trial, they may have to pay a
penalty or fees to the other side.

8. Warning. The parties pursing ADR must be careful not to let a Statute of
Limitation run while a dispute is in any ADR process. Once the statute expires,
judicial remedies may no longer be available.
 Conclusion:

There is no single answer as to whether to pursue litigation or ADR. Instead, the

circumstances of each case need to be weighed and carefully analyzed by all
concerned parties. Knowing all the options is an important first step. This can be
done by considering the advantages and disadvantages of each proposed ADR
method and discussing it with trusted and experienced legal counsel. Through this
topic I got to learn a new term called alternative dispute resolution (ADR). I have
tried to provide as much details as possible regarding my topic. I found out what
alternative dispute resolution means, how many types of ADR are there, what are
the advantages and disadvantages of ADR. I have also provided some examples
and tried to relate Alternative Dispute Resolution with respect to Bangladesh.
Litigation should be the last resort and utilized only if the ADR procedures fail. It is
essential, however, that all of the parties involved in the claim or dispute
approach ADR with an open mind and a willingness to compromise if it is to have
any chance of success. Mediation is mostly used. Arbitration is very useful when it
comes to handling family matters.

Bibliography:

 http://www.lorman.com/newsletter/article.php?article_id=1155&newslett
er_id=248&category_id=8&topic=LIT
 http://www.duhaime.org/LegalResources/CivilLitigation/LawArticle-
18/Alternative-Dispute-Resolution-ADR-An-Introduction.aspx
 http://www.law.cornell.edu/wex/alternative_dispute_resolution
 http://www.mncourts.gov/?page=303
 http://www.wipo.int/amc/en/center/advantages.html
 http://www.justice.govt.nz/publications/global-publications/a/alternative-
dispute-resolution-general-civil-cases/4-advantages-and-disadvantages-of-
adr
 http://www.life123.com/career-money/business-
law/contracts/disadvantages-of-alternative-dispute-resolution.shtml
 http://suite101.com/article/advantages-and-disadvantages-of-adr-a58925
 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration
_law_in_bangladesh.htm
 http://www.lawteacher.net/arbitration-law/essays/alternative-disputes-
resolution.php