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Alternative Dispute Resolution (ADR) is a collective term used to describe various methods of solving a legal dispute without using the traditional method of going to court (known as litigation). Until recently, if you had a legal problem, you had to go to court to get it resolved – which could be expensive and time-consuming. This has now changed. ADR provides other options to litigation which are beneficial to both parties and are often lower in cost and less stressful for everyone involved. This is particularly attractive for people who wish to have future relations with the person they are in dispute with (for example, neighbours, co-workers, business partners or parents who are divorcing).
In Scotland there are four forms of ADR currently in use: negotiation, mediation, conciliation and arbitration.
Most people have negotiated at some point during their life. If you have a legal problem, negotiation can be a good first step to find a solution without going to court.
Negotiation is where people involved in a dispute communicate with each other and exchange information so that they can come to an agreement.
The main benefit of negotiation is it encourages a two-way flow of information and gives each party insight into the other person’s perspective. As a result, each party’s goals can be identified and they can work together to reach an agreement that suits them both.
However, successful negotiation depends on mutual respect and compromise from both parties. For example, if you want a settlement that maximises your own gain at the other party’s expense, negotiation will not be successful. However, if you want to maintain a relationship after settlement then negotiation will be more successful.
You can employ a solicitor to negotiate on your behalf but it is not a necessity, as you can do your own negotiating.
If you wish to negotiate without a solicitor, all you need to do is start communicating with the party you are in dispute with.
If you negotiate by yourself it does not cost anything. If you employ a solicitor to negotiate, his or her fees will need to be paid. Your solicitor’s fees may be paid by legal aid advice and assistance, if you qualify.
Mediation is a popular voluntary form of ADR in Scotland. It involves people in dispute using a neutral third party to help them resolve any issues (it is sometimes also called ‘facilitated negotiation’). Although a mediator is involved, it is you and the person you are in dispute with who will sort out the problem and come to an agreement, not the mediator. The mediator’s role is to encourage communication, guide the discussion and help find solutions that are agreeable to both parties. They have no authority to decide the outcome.
Mediation involves you and the person you are in dispute with having sessions with a mediator. You will both tell your version of the dispute to the mediator who will then summarise the main issues. Mediation is based on successful communication, so the mediator will encourage dialogue between the parties and explore the matters in dispute. This helps both parties to see the issue from the other’s perspective and also understand the impact the disagreement has had on each other. The mediator will encourage both parties to come to a fair agreement that suits everyone involved. After doing so, each party will be given a copy of the agreement and the mediator will explain each person’s role in resolving the dispute. What are the Advantages and Disadvantages of Mediation?
Similar to other forms of ADR, mediation provides quicker decisions than those made by a court – and it is normally less expensive than litigation. Mediation can also offer creative solutions specific to your needs as it is not limited solely to legal remedies. Crucially, for those who want to maintain future relations with the other party involved (such as an ex-spouse, neighbour or co-worker), mediation helps both parties reach an amicable agreement of their own choosing (on the flip side, disputes settled in court rarely make relationships with the other party better). Mediation is also confidential, so you do not have to hold back any information you think may go against you if the dispute ends up in court (a mediator can be called to give evidence in court, but this is rare, as the courts are keen to protect the value of mediation and its users).
Encouragingly, research has shown that mediated agreements are much more likely to be followed than those made by a court - probably because they have been created by the parties involved.
The main disadvantage of mediation is that you may not reach a settlement agreement so the dispute will end up in court anyway. This could be because the parties find it difficult to be near each other, which means communication has little chance of being successful. Or, if one party is timid and the other aggressive, the timid party may not be awarded what is legally his or hers due to mediation being focused on compromise.
The three most common types of dispute settled by mediation are:
Mediation is frequently used in family disputes such as separation or divorce. The focus is usually on solving financial issues or child custody dilemmas. In these situations, going to court may make the situation more confrontational which will not make it any easier to resolve the dispute. If there are children involved, mediation helps the parents or guardians to find an outcome suited to their family needs, rather than handing the decision over to a judge. Also, with financial disputes in divorce or separation actions, an insight into the other party’s perspective may reveal issues that hadn’t yet been considered.
Mediation is suitable for many different workplace conflicts ranging from personality clashes between employees to employee suspension. Employers can also benefit from mediation as they avoid the expense of defending actions in an Employment Tribunal.
Community mediation is used in a wide number of disagreements including neighbourly and social housing disputes, such as noise complaints or antisocial behaviour, or where a breakdown in a relationship results in homelessness, such as between a young person and their parents. Mediation helps resolve these disagreements by encouraging all parties to come together and explore different options.
You do not need a solicitor for mediation. You can contact a mediation service at any point to settle your dispute; however, if you prefer to have your solicitor present during mediation, you can. Similarly, your solicitor could recommend mediators who specialise in your type of dispute. If you want to apply for legal aid to cover the cost of mediation, this can only be done through a solicitor (see below).
There are many different organisations that specialise in providing high quality mediation and they all have independent prices. If your dispute is complicated it may require several sessions of mediation which will cost more than a simpler dispute only requiring one session. The cost of mediation is usually shared by the parties involved. Legal aid can be awarded for mediation claims and there is no restriction on what type of dispute legal aid can be awarded to. Your solicitor will apply on your behalf for legal aid to cover the cost of mediation. The Scottish Legal Aid Board will then look at the merits of your case and your financial position and may grant financial aid towards mediation sessions.
The Scottish Mediation Network is a large organisation dedicated to mediation. It provides a public database of mediators in Scotland on behalf of the Scottish Government. There are also several independent mediators, so it may be best to research the services that different mediators offer and choose one that best suits your needs.
Conciliation is similar to mediation as it involves a third party who helps to resolve the dispute. However, the role of the conciliator is different to the mediator as he or she takes a more active role when discussing the legal problem and may recommend the best ways to resolve it.
The conciliator will communicate with both parties and decide if a remedy can be found for their dispute. The conciliator will then try to explain the legal issues involved and will analyse different possible solutions. They may identify the advantages and disadvantages of options or encourage the adoption of a specific alternative. The conciliator’s role is to proactively advise rather than merely assist; however, they cannot impose any decision.
Conciliation is required of anyone thinking of making an Employment Tribunal claim. Conciliators at the ‘Advisory, Conciliation and Arbitration Service’ (Acas) will discuss the advantages and disadvantages of a potential claim and attempt to resolve the dispute with the employee and employer involved, without having to go through the expensive and stressful process of an Employment Tribunal.
If a solution cannot be found, it is still possible to make a claim in a tribunal as long as conciliation has been tried first. This means that when making a claim, a conciliation reference number must also be submitted proving to the tribunal that there has been an attempt to resolve the dispute early.
There are only a limited number of circumstances when the required to try early conciliation can be sidestepped. These are where:
a) Another person involved has an early conciliation certificate number;
b) Acas doesn't have the power to conciliate on some or all of the claim;
c) The employer has already asked Acas to get involved in the dispute;
d) The claim concerns unfair dismissal and the person making the claim is applying for interim relief; or,
e) Where the claim is against the Security Service, Secret Intelligence Service or GCHQ.
Conciliation is similar to mediation because the aim is to find a mutually-beneficial agreement rather than one party being successful and the other unsuccessful. Conciliation is a way of resolving the dispute more quickly and less expensively than going to court.
The conciliator takes an active role in resolving the dispute and can suggest methods to resolve it. Some parties may prefer the conciliator to have a less active role, in which case mediation or negotiation may be more suitable. Some people may not like the fact that, at the end of conciliation, there is no legally binding agreement produced, and you may end up using another form of ADR or taking the dispute to litigation to get this.
A solicitor is not needed because the conciliator takes on the role of advisor for both parties and gives advice and finds a solution to benefit both sides. However, if parties feel more comfortable having their solicitor present, this may be possible.
If your dispute is employment related, the conciliation service offered by Acas is completely free. Otherwise, the cost of conciliation depends on the conciliator’s individual prices.
ACAS can appoint a conciliator to you. Or you can find many independent conciliators online.
Arbitration is a more formal type of ADR where your dispute is submitted to a private judge called an arbitrator who makes a decision which is final and legally binding. It is increasingly common for contracts, particularly commercial and construction contracts, to have an arbitration agreement clause within them that states any disputes will be settled by arbitration instead of litigation. This is because arbitration is a much more cost effective and faster way to solve a problem: the awards can be easier to enforce than court judgments, the parties can choose an arbitrator with experience relevant to their problem and the proceedings and any awards made are confidential.
At an arbitration hearing, you and the other party present your version of the dispute to an arbitrator and can produce witnesses or evidence supporting your version of the facts. The length of time that the hearing takes depends on the complexity of the dispute and the number of witnesses to be examined, although it is possible to place a time limit on how long the process will take. You may then present closing speeches to the arbitrator who must make a decision based on the hearing.
Arbitration is completely confidential whereas decisions made in court are public and are published online. If the other party breaches this confidentiality then you can bring an action against them. Another reason many people choose arbitration over going to court is that both parties can select the arbitrator. This can be advantageous because a court judge is an expert on the law but may not have real life experience in the area of your dispute.
However, although the arbitrator’s decision is legally binding, there are some limited appeal options after an arbitrator has made a decision. These include errors of law, errors in jurisdiction of the arbitrator or if there has been a serious irregularity.
In Scotland the Arbitration (Scotland) Act 2010 provides a structured framework to arbitration procedures. As a result of this Act, the awards arbitrators can give are less flexible and arbitration has become more formal. However, there are two main advantages that still exist: speed and money. A case that goes to court can take several years to finally have a concrete decision while arbitration cases may be resolved within months. This keeps costs down as the process is not stretched over a long period of time. This allows you to resume your usual business activities or solve a family dispute immediately, for example.
Arbitration is a type of ADR that bears most similarities with litigation. The process involves presenting your case, submitting evidence and persuading the arbitrator that your argument is stronger than the other party’s. As a result, it is fairly formal and a solicitor may be advisable to help you through the arbitration procedure. However, you do not need to have a solicitor and can instead represent yourself at an arbitration hearing.
The cost of arbitration depends on several factors, including the complexity of your dispute. The cost of hiring an arbitrator for a hearing may be expensive depending on his or her rates. If you opt for a solicitor to aid the arbitration process, you will also have to pay the solicitor fees on top of the arbitration fees, although legal aid may be available to help cover the costs of your solicitor.
Scotland has a Chartered Institute of Arbitrators who can help you find an arbitrator suited to your dispute. www.ciarb.org/scotland/arbitration/
All of the ADR options mentioned are applicable across the UK. The main difference is the funding options. While some types of ADR are free (such as the early conciliation service offered by Acas for employment disputes), others must be paid for. Although legal aid may be available, the procedures for being granted it are different in Scotland compared to England and Wales and the funding available is always changing. You should visit www.gov.uk/check-legal-aid to check if your dispute is covered by legal aid.
The other difference is the organisations which offer ADR. The government website www.civilmediation.justice.gov.uk/ can help you find a mediator in the UK. When seeking an appropriate arbitrator or conciliator the same advice applies to the whole of the UK.