Alternative Dispute Resolution
Commercial Law

Alternative Dispute Resolution – A Better Way to Resolve Commercial Disputes

Alternative dispute resolution (ADR) is a popular concept in today’s high stakes, competitive, and expensive commercial litigation industry.  I use the word industry purposefully because in some sectors, litigation is a form of business, conducted with profit and loss statements with attorneys generally on the winning side no matter what the outcome in court.

According to Commercial Lawyers Perth, ADR is meant to provide a more cost effective, and equally fair, method of resolving disputes.  ADR can take the form of mediation, arbitration, binding arbitration, and a variety of mixtures of those approaches.

In a general sense a mediation is a conference between opposing parties with an experience person (often a lawyer or a retired judge) acting as a moderator.  The mediator will ask both parties to submit documents and other information so she can be as well versed in the subject matter before the conference begins.  Then, as the meeting progresses, a mediator will shuttle between the parties looking for common ground, pointing out weaknesses in positions or arguments, and generally attempting to bring the parties close enough that they can actually reach a settlement.

Arbitration is more formal and feel more like a courtroom setting. An arbitrator is typically governed by the rules of the American Arbitration Association.  This person will ask for papers and other evidence before the arbitration, and then will listen to testimony and statements by both sides before making a final judgment, typically after a period of days or weeks considering each sides argument.

Arbitration and Mediation are good ways to accomplish the following:

  • Speed the process of litigation. In a traditional court setting it can take years to complete all pre-trial activity and final arrive in a court room for a trial.  In contrast, most ADR processes take only a few months, and sometimes just a few weeks.  Parties can have a decision much quicker so as to move on with their business without the cloud of litigation.
  • Speed means fewer costs.  Lawyers generally bill by the hour and ADR comes with less preparation time, less formality and streamlined procedures, relaxed rules of evidence and there are many more arbitrators and mediators than there are judges available to hear cases and so the bottleneck of the court system is gone.
  • Chance: Rather than leaving the decision in a case to an unknown group of strangers selected for a jury, the mediator or arbitrator is an accomplished professional, known for their fairness and expertise, who are versed in what happens in court and the expected outcomes there, and is committed to being a neutral fact-finder and decision maker.

Here are some tips and trick for Mediations:

  • The mediation should take place on neutral ground where both parties agree to conduct the conference. This may be the mediator’s office but the most important consideration is that all parties are comfortable.  Food and beverages should be provided.
  • All persons who need to be present to decide on a final resolution to the case must be present. Without all parties, and their counsel, no final decision can be made and the momentum of the mediation is lost.
  • All parties must negotiate in good faith. A mediation is not a stalling tactic or a dodge.  Patience is required, and all parties should commit to letting the process “work”.
  • Pre-mediation statement should be submitted to help the mediator understand your position but also to demonstrate to the opposing side the strength of your arguments.
  • Generally, the format of a mediation is first, hold a joint conference with all parties to introduce everyone and then splitting off into individual caucuses between which the mediator will shuffle while working with each group.
  • It is important to allow the process to “mature” through natural give and take.

Alternative dispute resolution is an effective and cost-efficient method to resolve disputes that avoids many of the pitfalls and expense of a traditional courtroom trial.  Using these tips will keep your mediation smooth and produce good results.