The Benefits of Alternative Dispute Resolution

Courts will generally expect parties to engage in ADR so it is important to be open to ADR for this reason alone. However, in a practical sense, there are numerous benefits and advantages to resolving a dispute via ADR rather than going down the court route.

What is ADR?

ADR is ultimately focussed around discussion, negotiation, and compromise. ADR can take place by way of any of the below:

-          Without Prejudice correspondence: Parties can write to each other marking the correspondence “Without Prejudice”. Effectively, this means that the correspondence that is put forward can be “Without Prejudice” to the open position put forward. Without Prejudice correspondence cannot be referred to in court when deiding a case – however, they can and often is referred to on the issue of costs. Without Prejudice correspondence and meetings can allow parties to discuss settlement options openly.

• Mediation: This is a more formal process. In a mediation, the mediator, who is to remain a neutral party, will enable conversations between the parties in order to reach a settlement. The mediator will often challenge each parties’ case whilst remaining impartial.  A common misconception is that mediation has to involve parties being in the same room – often times, parties will be in separate rooms with the mediator going between rooms and taking the parties’ positions.

• Arbitration: Some contracts will contain arbitration clauses. In arbitration, an arbitrator will consider evidence and the positions of both parties, which, whilst not dissimilar to the court process, is faster and a lot more flexible with less procedural rules.

ADR is ultimately focussed around discussion, negotiation, and importantly, compromise.

What are the benefits of ADR in Commercial Litigation?

One of the benefits of ADR in Commercial Litigation is that ultimately, the parties are in control of the outcome. Litigation carries with it risk and uncertainty when going through to trial – parties, through ADR, have much more of a say. Another benefit is that the parties can come to some form of compromise through ADR, which a judge would not be able to order – whilst judges can award damages, judge’s powers cannot go far beyond this. Parties can be more creative in terms of what a good outcome would look like for them.

The key benefits however is that ADR can forego costly and time-consuming litigation - and perhaps, if utilised in an appropriate manner and at the correct juncture, go some way to restoring the Commercial relationship between the parties.

Contact us

As stated from the outset of this article, courts will generally expect parties to engage in ADR. The difficulty in litigation is that, once matters have become contentious between parties and the relationship is fraught – settlement discussions and negotiations may seem difficult. We at Forbes can advise you on your dispute and assist with ADR, to allow an expeditious resolve to your Commercial Litigation.