Alternative Dispute Resolution

 Alternative Dispute Resolution

Definition

·         Alternative dispute resolution (“ADR”) mentions to some procedure of settling without law suit. ADR accumulate all procedure and manners of disputes resolve that happen outside of any administration. The most famous

·         ADR methods are the following:

·         Mediation, Arbitration, Conciliation, Negotiation, and Transaction. 

All ADR techniques have usual quality – i.e., entitle the parties to find acceptable solutions to their dispute outside of conventional legal / court proceedings, but are governed by different rules. For example, in negotiation there is no third party who mediate to help the parties reach an agreement, unlike in mediation and conciliation, where the motive of the third party is to encourage an cordial agreement between the parties. In arbitration, the third party (an arbitrator or several arbitrators) will play an main role as it will provide an arbitration award that will be obligatory on the parties. In comparison, in conciliation and mediation, the third party does not impose any binding decision.

If all the ADR methods are distinct, they should not be collating and challenged because in practice, the parties combine the use of these different ADRs. For instance, the parties may stipulate in their contracts that in the affairs of a dispute they will first submit to an effort at friendly settlement (conciliation/mediation) and only in the case of not settlement will they use to a judicial method of resolution, which may be arbitration or recourse to the State justice system. ADRs therefore come into play at different levels and have a complementary character.

The important advantages of ADR are rapidity, secretes and pliability.

Public courts may be asked to review the validity of ADR methods, but they will infrequently overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them.

Overview

Alternative Dispute Resolution ("ADR") defined to any source of settling disputes beyond the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As Expanding court queues, increasing costs of litigation, and time spoil continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory.

• Negotiation

Negotiation is the greatest mode of dispute resolution. While the two most known forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute resolution is that it allows the parties themselves to control the process and the solution. Negotiation is much less formal than other types of ADRs and allows for a lot of flexibility.

• Mediation

Mediation is also an informal substitute to litigation. Mediators are individuals trained in negotiations, who bring opposing parties together and attempt to work out a resolve or agreement that both parties accept or reject. Mediation is not binding. Mediation is used for a wide gamut of case-types ranging from juvenile felonies to federal government negotiations with Native American Indian tribes. Mediation has also become a significant method for resolving disputes between investors and their stock brokers. See Securities Dispute Resolution.

• Arbitration

Arbitration is one of the most symbolic and growing forms of ADR. Arbitration is more formal than mediation and has a lot of resemblance with conventional court proceedings, involving limited discovery and simplified rules of evidence (ex. hearsay is usually admissible in arbitration).

Different types of arbitration exist: 

• national arbitration: for example American arbitration, French arbitration or German arbitration.
• international commercial arbitration: usually used to settle disputes that arise from commercial contractual relations between buyers and sellers who are in two different states;
• Investor-State arbitration: unilateral referral by private individual investors to an arbitral tribunal against a host State of their investment. ​

Other types of arbitration and areas of specialization for this ADR exist, such as construction arbitration, post M&A arbitration, etc.

Arbitration relies on the consent of the parties; therefore, the arbitration agreement is emblematic because it is the gateway to the particular system that is arbitration. Prior to the dispute occurring, parties usually enter into a binding arbitration agreement or any other form of agreement with an arbitration clause, that allows them to lay out major terms for the arbitration process (number of arbitrators, arbitration forum; arbitration rules; fees etc.). 

If parties still have disputes about certain terms before entering into an arbitration they can petition to a court to resolve a dispute. Arbitration can be held ad hoc or with the administrative support from one of the institutional providers like American Arbitration Association (AAA) or JAMS when the arbitration is national. 

The arbitration is headed and decided by an arbitral panel or a single arbitrator, depending on the agreement of the parties. Arbitrators do not have to be lawyers, parties can select arbitrators from other fields that they consider more suitable for the resolution of the dispute, which usually occurs when the arbitration deals with a very specialized topic such as construction or pharmaceutical issues. Indeed, parties can for example choose an arbitrator with an engineering background to arbitrate a construction dispute. 

To comprise a panel, either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third. Arbitration hearings usually last between a few days to a week, and the panel only meets for a few hours per day. The panel or a single arbitrator then deliberates and issues a written binding decision or arbitral award. Opinions are not public record. Arbitration has long been used in labor, construction, and securities regulation, but is now gaining popularity in other business disputes. For national arbitration, Title 9 of the U.S. Code establishes federal law supporting arbitration. It is based on Congress's plenary power over interstate commerce. Where Title 9 applies, its terms prevail over state law. There are, however, numerous state laws on ADR. Forty-nine states have adopted the 1956 version of the Uniform Arbitration Act as state law. The act was revised in 2000 and subsequently adopted by twelve states. The arbitration agreement and award is now enforceable under both state and federal law.

In 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, or the "New York Convention", was drafted to aid in the enforcement in domestic courts of awards granted in foreign countries. In 1970, the United States joined and, as of November 2021, there are 156 countries participating in the convention.