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Adr final project

  1. 1. Alternative Dispute Resolution (ADR) GROUP 5 LN COLLEGE OF MANAGEMENT & TECHNOLOGY Academic Year 2007-2008 Semester –I Topic “ALTERNATIVE DISPUTE RESOLUTION (ADR)” Project Guide: Prof. Ranjith Krishnan For: MBA (MASTER IN BUSINESS ADMINISTRATION) Submitted By: COMPLAN GROUP MBA (FULL TIME) SEMESTER I 1
  2. 2. Alternative Dispute Resolution (ADR) GROUP 5 CERTIFICATECERTIFICATE II Prof. Ranjith Krishnan Hereby certify that the GroupProf. Ranjith Krishnan Hereby certify that the Group No. 5 First Year of Master in Business AdministrationNo. 5 First Year of Master in Business Administration (MBA) of LN College of Management & Technology(MBA) of LN College of Management & Technology has completed their project titled Essential ofhas completed their project titled Essential of Management in the academic year 2007-08. TheManagement in the academic year 2007-08. The information submitted herein is true, satisfactory andinformation submitted herein is true, satisfactory and original to the best of their knowledge.original to the best of their knowledge. MBA (FULL TIME) SEMESTER I 2
  3. 3. Alternative Dispute Resolution (ADR) GROUP 5 Project Guide Prof. Ranjith Krishnan ACKNOWLEDGEMENT WE express thanks to everybody who helped us by their direct or indirect contribution have helped us in converting my thought into reality It is really impossible to acknowledge all the help us have received in preparing this project. We take this opportunity to express my gratitude towards my PROFESSOR RANJITH KRISHNAN for her encouragement and guidance to prepare project of “ALTERNATIVE DISPUTE RESOLUTION (ADR)” FOR THE FIRST YEAR OF “MASTER IN BUSINESS ADMINISTRATION (MBA”) specialization course in “LN College OF MANAGEMENT & TECHNOLOGY” (2007-2008) MBA (FULL TIME) SEMESTER I 3
  4. 4. Alternative Dispute Resolution (ADR) GROUP 5 And, last but not least we would like to express our humble thanks to friends and family member for their encouragement and boosting which they have given to us. CONTENTS Sr.No. Topic Page No. 1. Introduction 1. 2. Alternate Dispute Resolution- An Indian Perspective 4. 3. An Overview 6. 4. Impact Of ADR 18. 5. Types of ADR Techniques 20. 6. ADR Procedures 56. 7. Key Elements to Implementing a Successful ADR Program 58. 8. Conclusion 60. MBA (FULL TIME) SEMESTER I 4
  5. 5. Alternative Dispute Resolution (ADR) GROUP 5 Group Members Sr.N o Name 1. Amit Panwar 2. Mazhar Khan 3. Manoj Nangalia 4. Shrikank Sharma 5. Sarvesh Upadhayay MBA (FULL TIME) SEMESTER I 5
  6. 6. Alternative Dispute Resolution (ADR) GROUP 5 ALTERNATIVE DISPUTE RESOLUTION (ADR) “A better way for resolving conflict” “One way to resolve a dispute!” “A more modern form of dispute resolution!” “ADR - The best way to resolve disputes.” INTRODUCTION MBA (FULL TIME) SEMESTER I 6
  7. 7. Alternative Dispute Resolution (ADR) GROUP 5 Did you know that 95 percent of all civil cases filed in court are resolved without going to trial? Many people use processes other than trial to resolve their disputes. These alternative processes, known as Alternative Dispute Resolution or ADR, are typically less formal and adversarial than trial, and many use a problem-solving approach to help the parties reach agreement. Although it is human nature to avoid conflict where possible, conflict is not all bad. Conflict can be constructive and a catalyst for growth. It also is inevitable, so the real question is how best to manage conflict. In our world, litigation too often has been the primary game plan for dealing with conflict. But the need for an alternative to litigation was evident at least 150 years ago, when Abraham Lincoln said: “Discourage litigation because the nominal winner often is a loser, in both time and money.” It took a long time after President Lincoln’s admonition before a new framework was constructed that recognizes litigation is not, and should not be, inevitable. That framework is alternative dispute resolution (“ADR”). ADR is an umbrella term encompassing a range of processes that provide alternatives to traditional litigation. ADR processes, in general, give parties the opportunity to play a more active role in collaborating to create mutually agreeable decisions or crafting a resolution to their disputes. Mediation, a commonly used ADR process, highlights the benefits of this opportunity. Through mediation, those individuals who best know the facts, the issues, and the vested interests involved in an issue or dispute are the very people balancing priorities and crafting a resolution that reflects their interests. The result is a durable resolution, created and endorsed by those MBA (FULL TIME) SEMESTER I 7
  8. 8. Alternative Dispute Resolution (ADR) GROUP 5 who will implement it. Oftentimes, the result also includes improved relations between the parties to a dispute, particularly important for parties who have ongoing business relationships. MEANING Alternative dispute resolution (ADR) includes dispute resolution processes and techniques that fall outside of the government judicial process. Despite historic resistance to ADR by both parties and their advocates, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In fact, some courts now require some parties to resort to ADR of some type, usually mediation, before permitting the parties' cases to be tried. The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR imposes fewer costs than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute. Alternative Dispute Resolution (ADR) - Definition ADR - Alternative dispute resolution has greatly expanded over the last several years to include many areas in addition to the traditional commercial dispute in the form of arbitration; mediation has become an important first step in the dispute resolution process. Arbitrators and mediators have an important role in resolving disputes. Mediators act as MBA (FULL TIME) SEMESTER I 8
  9. 9. Alternative Dispute Resolution (ADR) GROUP 5 neutrals to reconcile the parties’ differences before proceeding to arbitration or litigation. Arbitrators act as neutral third parties to hear the evidence and decide the case. Arbitration can be binding or non-binding. Overview of Alternative Dispute Resolution - Cornell Law School Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes arbitration, mediation, early neutral evaluation, and conciliation. 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. Alternate Dispute Resolution- An Indian Perspective Inspired by the United Nations Commission on International Trade Law's Conciliation Rule, adopted by the General Assembly of the United Nations in 1985, and the recommendation made by the General Assembly, Parliament of India passed the Arbitration and Conciliation Act, 1996 which came into force on 25th January, 1996. The said Act intends to achieve MBA (FULL TIME) SEMESTER I 9
  10. 10. Alternative Dispute Resolution (ADR) GROUP 5 consolidation and amendment of the law relating to domestic arbitration, international arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and the matters connected therewith or incidental thereto. Proceedings pending on arbitration commenced on or before January 25, 1996 will continue to be governed by the Act of 1940. Therefore the book deals with the Act of 1940 as well as arbitration law. For the promotion and development of Arbitration and other Alternate Dispute Resolution techniques, Indian Society of Arbitrators (hereinafter referred to as ISA) was constituted. ISA has contributed substantially to the formulation and enactment of the Arbitration and Conciliation Act 1996, and is a leading arbitral institution in the country Alternative dispute resolution in India is not new and it was in existence even under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to accommodate the harmonization mandates of UNCITRAL Model. To streamline the Indian legal system the traditional civil law known as Code of Civil Procedure, (CPC) 1908 has also been amended and section 89 has been introduced. Section 89 (1) of CPC provides an option for the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement. Philosophy & Implementation in India ADR is by no means a recent phenomenon in India, though it has been MBA (FULL TIME) SEMESTER I 10
  11. 11. Alternative Dispute Resolution (ADR) GROUP 5 organized and systematized, expressed in clearer terms, employed more widely in dispute resolution in recent years than before. In earlier times, disputes were peacefully decided by intervention of kulas (family or clan assemblies), srenis (guilds of men following the same occupation), parishads (assemblies of learned men who knew law) before the king came to adjudicate on disputes. There were Nyaya panchayats at grass root level before the advent of the British system of justice. Later on, Lok Adalats (people's court) have provided speedy and inexpensive justice in both rural and urban areas in India. In India, laws relating to resolution of disputes have been amended from time to time to facilitate speedy dispute resolution. The Judiciary has also encouraged out of court settlements to alleviate the increasing backlog of cases pending in the courts. To effectively implement the ADR mechanism, organizations like ICA, ICADR were established, Consumer redressal forums and Lok Adalats revived. The Arbitration Act, 1940 was repealed and a new and effective arbitration system was introduced by the enactment of the Arbitration and Conciliation Act, 1996.This law is based on the United Nations Commission on International Trade Law (UNCITRAL) model law on International Commercial Arbitration. The Legal Services Authorities Act, 1987 has also been amended from time to time to endorse use of ADR methods. Section 89 of the Code of Civil Procedure as amended in 2002 has introduced conciliation, mediation and pre-trial settlement methodologies for effective resolution of disputes. Mediation, Conciliation, Negotiation, Mini Trial, Consumer Forums, Lok Adalats and Banking Ombudsman have already been accepted and recognised as effective Alternative dispute resolution methodologies. MBA (FULL TIME) SEMESTER I 11
  12. 12. Alternative Dispute Resolution (ADR) GROUP 5 Abraham Lincoln puts the philosophy of Alternate Dispute Resolution systems by declaring "discourage litigation; persuade your neighbours to compromise whenever you can. Point-out to them how the normal winner is often a loser in fees, expenses, cost and time." Further, the Constitution of India has defined and declared the common goal for all of us as — "to secure to all the citizens of India Justice social, economic and political; Liberty; Equality and Fraternity". ADR is a vehicle to achieve these principles and objectives. Alternative Dispute Resolution (ADR): An Overview Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes arbitration, mediation, early neutral evaluation, and conciliation. 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. The two most common forms of ADR are arbitration and mediation. Arbitration is a simplified version of a trial involving no discovery and simplified rules of evidence. Either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third to comprise a panel. Arbitration hearings usually last only a few hours and the 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. “It is the spirit and not the form of law that keeps the justice alive.” LJ Earl Warren MBA (FULL TIME) SEMESTER I 12
  13. 13. Alternative Dispute Resolution (ADR) GROUP 5 The disillusionment and frustration of people over the inordinate delay in dispensation of justice today looms large as a great threat to erode the confidence of people in the justice system of the country. It is the constitutional obligation of the judiciary to exercise its jurisdiction to reaffirm the faith of the people in the judicial set up. Therefore, evolution of new juristic principles for dispute resolution is not only important but imperative. International Scenario A brief look at the international scenario of ADR Mechanism reveals the popularity of its usage in various countries. The seeds of ADR in the UK can be traced to the work of the advisory, conciliation and arbitration service which was formed in 1974.In China and Japan mediation was used as primary means of conflict resolution. The Chinese principle was the influence of Confucian view of harmony and dispute resolution by morals rather than coercion. Informal dispute resolution was used in many cultures of the world including India, Africa and Israel. In Japan, Judges intervene extensively during the in-court settlement; every Japanese Judge is expected, both by law and by litigants, to move a case towards settlement. This has the force of statutory law. At least 40% of the cases are settled. The Judge, who decides to switch the litigation to a settlement mode, takes off his robe and acts as mediator. In 1976, Rosco Pound Conference was held to commemorate the anniversary of his dissertation on “Public dissatisfaction with the American Legal system”. It was this conference that the current ADR movement MBA (FULL TIME) SEMESTER I 13
  14. 14. Alternative Dispute Resolution (ADR) GROUP 5 actually started in America and now these methods are so successful that nearly 93% of the civil disputes are settled outside the courts. Even in Europe, mediation is seen as a potentially promising mechanism for the resolution of both simple and complex disputes. In 1995, France expanded the legislative basis for judicial conciliation and mediation. The Hong Kong International Arbitration Centre, most probably the largest arbitration service centre in Asia, has held the view “arbitration as compared to litigation has become very popular for resolving the disputes. Similarly, conciliation and mediation find an increasing measure of support in future.” The Concept & its efficacy The concept of Conflict Management through Alternative Dispute Resolution (ADR) has introduced a new mechanism of dispute resolution that is non adversarial. A dispute is basically ‘lis inter partes’ and the justice dispensation system in India has found an alternative to Adversarial litigation in the form of ADR Mechanism. MBA (FULL TIME) SEMESTER I 14
  15. 15. Alternative Dispute Resolution (ADR) GROUP 5 New methods of dispute resolution such as ADR facilitate parties to deal with the underlying issues in dispute in a more cost-effective manner and with increased efficacy. In addition, these processes have the advantage of providing parties with the opportunity to reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict in a peaceful manner, and achieve a greater sense of justice in each individual case. The resolution of disputes takes place usually in private and is more viable, economic, and efficient The Alternative Dispute Resolution Mechanism has proven to be one the most efficacious mechanisms to resolve commercial disputes of an international nature. Transcending national boundaries it renders proportionate judgements over the merchants’ disputes, as the Law Merchants of Medieval ages rendered justice in light of “fair price”, good commerce, and equity. Infact the Law merchant precepts have been reaffirmed in new international mercantile law. Visualizing the participatory nature of such laws the ADR method is also formulated in the similar vein. “Increased awareness of ADR is the need of the hour” As per data provided by the Registry of Supreme Court of India, as on 31.10.2006, more than 2, 53, 80,757 cases were pending in our subordinate Courts. The figure of pending adjudication is indeed staggering. To deal with these cases, we have less than 15000 judges and judicial officers in the country. The ratio of judge per million populations in India is the lowest in the world. The Law Commission of India in its 20th Report examined the MBA (FULL TIME) SEMESTER I 15
  16. 16. Alternative Dispute Resolution (ADR) GROUP 5 problem of under-staffing of the judiciary. The Commission found that India has 10.5 judges per million populations; the corresponding figure in England was 50.9, Australia 57.7, Canada 75.2 and the U.S.A. 107. The main reason of delay in disposal of cases is inadequate judge-population ratio. Despite many advantages of using Alternative dispute resolution mechanisms, our society has been reluctant to give it its due recognition .The predominant reason being that a litigation ridden society is generally unable to explore consensual dialogue or arrive at an amicable solution. The ADR practitioner therefore acts like a healer of conflicts rather than a combatant. It is similar to the Panchayat system we have in our villages. The resolution of disputes is so effective and widely accepted that Courts have more often recognised them. In Sitanna v. Viranna, AIR 1934 SC 105, the Privy Council affirmed the decision of the Panchayat and Sir John Wallis observed that the reference to a village panchayat is the time-honoured method of deciding disputes. It avoids protracted litigation and is based on the ground realities verified in person by the adjudicators and the award is fair and honest settlement of doubtful claims based on legal and moral grounds. Awareness of ADR through seminars, workshops and other means and its supervised and systematic implementation should be encouraged so that its effectiveness is proved and the message reaches a large section of population. Also, apart from a good law that provides for resolution of disputes, it is rudimentary to extend or create facilities, services, and infrastructure that shall enable the implementation of such rules and lead to effective ADR practice. Effective coordination both at operational and structural level is a prerequisite of any successful ADR mechanism. Pre-trial MBA (FULL TIME) SEMESTER I 16
  17. 17. Alternative Dispute Resolution (ADR) GROUP 5 conciliation and fixing the targets for dispensation of justice are imperative for successful implementation of any ADR mechanism. Proper training of the Mediators, Negotiators, and Conciliators should be a mandatory requirement for the understanding of the disputes/ cases and its efficient handling. The specialized firms or organizations are certainly more promising and reliable in this sphere and people choose to consult them and engage their services for dispute resolution. There are some important organizations making significant contribution in promoting ADR services in India which need a special mention herein namely ICA and ICADR, the Federation of Indian Chambers of Commerce and Industry, Indian Chamber of Commerce, the Bengal Chambers of Commerce and Industry. The Indian Council for Arbitration (ICA) established on April 15, 1965 provides arbitration facilities for all types of domestic and international commercial disputes and conciliation of international trade complaints received from Indian and foreign parties, for nonperformance of contracts or noncompliance with arbitration awards. It maintains comprehensive international panel of arbitrators with eminent and experienced persons from different lines of trade and professions for facilitating choice of arbitrators. The council has launched on internet a special web site called COMLAWNET to provide information on arbitration and commercial laws. We need more organizations such as the ICA, ICC and FICCI that render specialized services and promote ADR. One would agree that these organizations have a vital role to play in resolving disputes, in particular, commercial disputes across the globe! MBA (FULL TIME) SEMESTER I 17
  18. 18. Alternative Dispute Resolution (ADR) GROUP 5 FEATURES OF ADR ADR is generally classified into at least four subtypes: negotiation, mediation, collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as well, but for present purposes it can be regarded as a form of mediation. See conciliation for further details.) The salient features of each type are as follows: MBA (FULL TIME) SEMESTER I 18
  19. 19. Alternative Dispute Resolution (ADR) GROUP 5 • In negotiation, participation is voluntary and there is no third party who facilitates the resolution process or imposes a resolution. • In mediation, there is a third party, a mediator, who facilitates the resolution process (and may even suggest a resolution, typically known as a "mediator's proposal"), but does not impose a resolution on the parties. In some countries (for example, the United Kingdom), ADR is synonymous with what is generally referred to as mediation in other countries. • In collaborative law or collaborative divorce, each party has an attorney who facilitates the resolution process within specifically contracted terms. The parties reach agreement with support of the attorneys (who are trained in the process) and mutually-agreed experts. No one imposes a resolution on the parties. • In arbitration, participation is typically voluntary, and there is a third party who, as a private judge, imposes a resolution. Arbitrations often occur because parties to contracts agree that any future dispute concerning the agreement will be resolved by arbitration. This is known as a 'Scott Avery Clause'. In recent years, the enforceability of arbitration clauses, particularly in the context of consumer agreements (e.g., credit card agreements), has drawn scrutiny from courts. Although parties may appeal arbitration outcomes to courts, such appeals face an exacting standard of review. MBA (FULL TIME) SEMESTER I 19
  20. 20. Alternative Dispute Resolution (ADR) GROUP 5 "Alternative" dispute resolution is usually considered to be alternative to litigation. It also can be used as a colloquialism for allowing a dispute to drop or as an alternative to violence. ADR can increasingly be conducted online or by using technology. This branch of dispute resolution is known as online dispute resolution (ODR). It should be noted, however, that ODR services can be provided by government entities, and as such may form part of the litigation process. Moreover, they can be provided on a global scale, where no effective domestic remedies are available to disputing parties, as in the case of the UDRP and domain name disputes. In this respect, ODR might not satisfy the "alternative" element of ADR. Advantages of ADR ADR has its own set of advantages and disadvantages when compared to court procedures, some of the potential advantages of using ADR: MBA (FULL TIME) SEMESTER I 20
  21. 21. Alternative Dispute Resolution (ADR) GROUP 5  Save Time: A dispute often can be settled or decided much sooner with ADR; often in a matter of months, even weeks, while bringing a lawsuit to trial can take a year or more.  Save Money: When cases are resolved earlier through ADR, the parties may save some of the money they would have spent on attorney fees, court costs, and experts’ fees.  Increase Control over the Process and the Outcome: In ADR, parties typically play a greater role in shaping both the process and its outcome. In most ADR processes, parties have more opportunity to tell their side of the story than they do at trial. Some ADR processes, such as mediation, allow the parties to fashion creative resolutions that are not available in a trial. Other ADR processes, such as arbitration, allow the parties to choose an expert in a particular field to decide the dispute.  Preserve Relationships: ADR can be a less adversarial and hostile way to resolve a dispute. For example, an experienced mediator can help the parties effectively communicate their needs and point of view to the other side. This can be an important advantage where the parties have a relationship to preserve.  Increase Satisfaction: In a trial, there is typically a winner and a loser. The loser is not likely to be happy, and even the winner may not be completely satisfied with the outcome. ADR can help the parties find win-win solutions and achieve their real goals. This, along with all of ADR’s other potential advantages, may increase the parties’ overall satisfaction with both the dispute resolution process and the outcome. MBA (FULL TIME) SEMESTER I 21
  22. 22. Alternative Dispute Resolution (ADR) GROUP 5  Improve Attorney-Client Relationships: Attorneys may also benefit from ADR by being seen as problem-solvers rather than combatants. Quick, cost-effective, and satisfying resolutions are likely to produce happier clients and thus generate repeat business from clients and referrals of their friends and associates.  Flexibility with rules and procedures: The procedures may be designed to suit the dispute, rather than follow the "one size fits all" Rules of Court. A mediator assists the parties to negotiate their own solution. An arbitrator is not bound by the Rules of Court, but must allow the parties an equal and fair opportunity to present their cases, and make a decision in accordance with the law governing the dispute.  Choice of decision maker: The parties choose their mediator or arbitrator. It generally makes sense to appoint someone who knows the business or has other relevant expertise. The parties can have an experienced professional appointed by them mutually or an autonomous body such as Indian Council of Arbitration, the International Chambers of Commerce (ICC) etc.  Certainty and enforceability: An arbitral award is final and binding, and enforceable as an Order of the Court.  Relationship: Mediation and Arbitration are less damaging to business relationships than litigation in Courts. The procedures are less adversarial, and more supportive of a continuing relationship. Because it is quicker the dispute is finished sooner, allowing the parties to get on with business. MBA (FULL TIME) SEMESTER I 22
  23. 23. Alternative Dispute Resolution (ADR) GROUP 5  Confidentiality: The process is not open to the media or any other third parties for that matter, except by agreement.  Efficient resolution  Less emotional stress  ADR helps in clearing the bottlenecks within the domestic judicial system. Because of these potential advantages, it is worth considering using ADR early in a lawsuit or even before you files a lawsuit. Disadvantages However, as with everything else, ADR also has disadvantages, which are as follows:  Parties cannot be compelled to go in for ADR unless they sign an agreement to resolve their disputes by ADR.  Success of ADR depends upon the good faith of the parties and their attorneys; however, unrepresented and/or uninformed party are at disadvantage of succeeding in an ADR.  ADR does not any precedent value. Usually in ADR proceedings, precedents are not given much importance.  The outcomes of ADR can vary, depending on arbitrator / mediator and other factors.  In ADR rules of evidence are not strictly applicable.  Poor mediator / arbitrator (qualifications, style, attitude) can result in unsuccessful resolution, and can defeat the purpose of ADR. MBA (FULL TIME) SEMESTER I 23
  24. 24. Alternative Dispute Resolution (ADR) GROUP 5 IMPACT OF ADR In a celebrated case, there was a dispute regarding copyright of a photograph between a person who conceptualized and arranged for the photograph shoot (the “arranger”) and the photographer who actually took the photograph. The two went into litigation and it took years for the matter to get resolved. His verdict was in favor of the arranger, but by then, the photograph lost its relevance as it was taken for a specific purpose. Had this dispute been referred to ADR, it would have been resolved much faster and would have involved less costs and most importantly the photograph would not have lost its relevance. For years for which the matter was in litigation, the copyright period of the photograph was running simultaneously and this benefit of the copyright to the author was lost. Thus, this case demonstrates that ADR can expedite resolution of dispute and prevention of products and/or services from losing its relevance and marketability. ADR aims to prevent anti monopolistic activities. Lets consider an illustration. There is dispute between a large company, which is financially sound against a company which is financially not as sound as the large company. It is easy for the large company to bear the rising costs of litigation, however, it would be back breaking for the smaller company to fight the litigation, as these litigation costs add up to its bottom line. In this scenario, the financially stronger company tends to have an upper hand, as it’s able to afford litigation, and more often than not, will be interested in prolonging the case in court, so that smaller company with efflux of time and also due to rising costs of litigation will tend to lose out. Now, once this MBA (FULL TIME) SEMESTER I 24
  25. 25. Alternative Dispute Resolution (ADR) GROUP 5 happens, and the smaller company can virtually be wiped out of the market, due to the reasons aforesaid. Thus, the larger company could get inclined towards creating a monopoly and take advantage of its financials and the situation. ADR can considerably solve this problem, as through ADR, the matter will be disposed off much sooner than it would do by litigation and it would work out to be much cheaper also. Similarly, ADR is very effective for trans-border disputes. This is all the more because, the parties to the dispute will belong to different laws and in litigation it becomes difficult to decide which law will apply to resolve the dispute. Many a times even the concept of Renvoi is not able to give a favorable solution to such issues of law. In such cases, by way of ADR and by using principals such as lex mercatori a favorable solution to the dispute can be arrived at. When disputes are in litigation, money gets locked in this process, which has an adverse affect on the economy. Thus, in view of the aforesaid reasoning, if disputes are referred to ADR, they will not only be resolved faster, but at much lower costs and could prevent locking of working capital of disputing parties. For example, I was involved in arbitration (in which the firm I work was the Counsel for the Claimant) where stakes were high and involved voluminous documentation. Had this dispute been referred to litigation it would approximately 10 –15 years to get disposed off, causing loss and hardships to Claimant. However, through arbitration it got resolved in just over a years time and the Claimant recovered its money from the Respondent. This way Claimants’ capital was not affected or locked, which MBA (FULL TIME) SEMESTER I 25
  26. 26. Alternative Dispute Resolution (ADR) GROUP 5 would have a case in litigation. This demonstrates the effectiveness of ADR system. Types of ADR Techniques The Commission does not mandate the use of a particular ADR technique in an agency's ADR program. As such, numerous ADR techniques are available for use by agencies in their programs. The Commission requires, however, the ADR technique must be used in a manner that is consistent with the core principles outlined in Chapter III of the Management Directive (MD)-110. One fundamental core principle provides that ADR techniques must be voluntary; i.e., the parties (the complainant and the agency) must mutually agree to participate and a binding decision cannot be issued by a third party. In addition, the use of an ADR technique must not diminish the complainant's rights protected under Part 1614 regulations. For example, an ADR program many not require a complainant to waive his/her right to an investigation, hearing, or to appeal the final decision to the Commission. Below is a description of various ADR techniques and the agencies which utilize them. Agencies are not limited to using only one technique in their program; rather, they are encouraged to experiment with these techniques by using various methods in combination to reach effective resolutions.  Mediation  Ombuds  Peer Review  Fact Finding MBA (FULL TIME) SEMESTER I 26
  27. 27. Alternative Dispute Resolution (ADR) GROUP 5  Early Neutral Evaluation  Settlement Conference  Facilitation  Minitrial  Conciliation  Arbitration 1. Mediation In mediation, an impartial person called a “mediator” helps the parties try to reach a mutually acceptable resolution of the dispute. The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves. Mediation leaves control of the outcome with the parties. Mediation is presently the most popular form of ADR in use by agencies in employment-related disputes. Mediation is the intervention in a dispute or negotiation of an acceptable impartial and neutral third party, who has no decision-making authority. The objective of this intervention is to assist the parties in reaching a mutually-acceptable resolution of the issues in dispute. A mediator makes primarily procedural suggestions regarding how parties can reach agreement. Occasionally, a mediator may suggest some substantive options as a means of encouraging the parties to expand the range of possible resolutions under consideration. A mediator often works with the parties individually, in caucuses, to explore acceptable resolution options or to develop proposals that might move the parties closer to resolution. MBA (FULL TIME) SEMESTER I 27
  28. 28. Alternative Dispute Resolution (ADR) GROUP 5 Mediation is a process in which a neutral person (the mediator) helps people to negotiate with each other and resolve their dispute. Cases for Which Mediation May Be Appropriate: Mediation may be particularly useful when parties have a relationship they want to preserve. So when family members, neighbors, or business partners have a dispute, mediation may be the ADR process to use. Mediation is also effective when emotions are getting in the way of resolution. An effective mediator can hear the parties out and help them communicate with each other in an effective and nondestructive manner. Cases for Which Mediation May Not Be Appropriate: Mediation may not be effective if one of the parties is unwilling to cooperate or compromise. Mediation also may not be effective if one of the parties has a significant advantage in power over the other. Therefore, it may not be a good choice if the parties have a history of abuse or victimization How does it work? • Mediation is confidential, and can only work if everyone is prepared to work towards a resolution • Everyone involved in the dispute comes together for a face-to-face meeting • The mediator runs the process and the people in dispute decide what they want to talk about • The mediator helps identify issues and possible options • The people in dispute work out a solution with the help of the mediator • Mediators don't impose a decision MBA (FULL TIME) SEMESTER I 28
  29. 29. Alternative Dispute Resolution (ADR) GROUP 5 When is it used? Mediation can be used when individuals (such as businesses, Neighbours, family members or work colleagues) have clear conflicts with one another. The benefits which have been identified with mediation are as follows:  Effective Process: Mediation generally enjoys an 80%-85% success rate.  Better Results: The resolution is created by the parties and is therefore tailored to their specific needs. This tends to result in a lower incidence of breach of the agreement reached.  Speed: A mediation can be arranged in a relatively short period of time and has the effect of bringing settlement negotiations "to a head" much more quickly than negotiations directly between parties, resulting in a faster disposition.  Cost: Time, money and emotion can be saved through early resolution of the dispute. Furthermore, the cost of mediation can be included with taxable costs and disbursements payable to the successful party.  Choice of Mediator: A mediator can be chosen who has expertise in negotiation, effective dispute resolution and in the particular areas of dispute, which expertise may be of assistance to the parties in resolving the dispute.  Freedom to Negotiate: Because the process is confidential and takes place on a without prejudice basis the parties have the freedom to develop and consider innovative settlement ideas. MBA (FULL TIME) SEMESTER I 29
  30. 30. Alternative Dispute Resolution (ADR) GROUP 5 2. Ombuds Ombuds are individuals who rely on a number of techniques to resolve disputes. These techniques include counseling, mediating, conciliating, and fact finding. Usually, when an ombud receives a complaint, s/he interviews the parties, reviews files, and makes recommendations to the disputants. The Ombuds do not impose solutions. The power of the ombud lies in his/her ability to persuade the parties to accept his/her recommendations. An individual not accepting the proposed solution of the ombud is free to pursue a remedy in other forums for dispute resolution 3. Peer Review Peer Review is a problem-solving process where an employee takes a dispute to a group or panel of fellow employees and managers for a decision. The decision is not binding on the employee, and s/he would be able to seek relief in traditional forums for dispute resolution if dissatisfied with the decision. The principal objective of peer review is to resolve disputes early before they become formal complaints. Typically, the panel consists of employees and managers who volunteer for this duty and who are trained in listening, questioning, and problem-solving skills as well as the specific policies and guidelines of the panel. A peer review panel may be a standing group of individuals who are available to address whatever disputes employees might bring to the panel at any given time. Other panels may be formed on an ad hoc basis through some selection process initiated by the employee, e.g., blind selection of a certain number of names from a pool of qualified employees and managers. MBA (FULL TIME) SEMESTER I 30
  31. 31. Alternative Dispute Resolution (ADR) GROUP 5 4. Fact Finding Fact Finding is the use of an impartial expert (or group) selected by the parties, by the agency, or by an individual with the authority to appoint a fact finder, in order to determine what the "facts" are in a dispute. The fact finder may be authorized only to investigate or evaluate the matter presented and file a report establishing the facts in the matter. In some cases, s/he may be authorized to issue either a situation assessment or a specific procedural or substantive recommendation as to how a dispute might be resolved. If used as an ADR technique, the findings of fact must remain confidential. 5. Early Neutral Evaluation In neutral evaluation, each party gets a chance to present the case to a neutral person called an “evaluator.” The evaluator then gives an opinion on the strengths and weaknesses of each party’s evidence and arguments and about how the dispute could be resolved. The evaluator is often an expert in the subject matter of the dispute. Although the evaluator’s opinion is not binding, the parties typically use it as a basis for trying to negotiate a resolution of the dispute. Early Neutral Evaluation uses a neutral or an impartial third party to provide an objective evaluation, sometimes in writing, of the strengths and weaknesses of a case. Under this method, the parties will usually make informal presentations to the neutral party to highlight their respective cases or positions. MBA (FULL TIME) SEMESTER I 31
  32. 32. Alternative Dispute Resolution (ADR) GROUP 5 Cases for Which Neutral Evaluation May Be Appropriate: Neutral evaluation may be most appropriate in cases in which there are technical issues that require special expertise to resolve or the only significant issue in the case is the amount of damages. Cases for Which Neutral Evaluation May Not Be Appropriate: Neutral evaluation may not be appropriate when there are significant personal or emotional barriers to resolving the dispute. 6. Settlement Conferences Settlement conferences may be either mandatory or voluntary. In both types of settlement conferences, the parties and their attorneys meet with a judge or a neutral person called a “settlement officer” to discuss possible settlement of their dispute. The judge or settlement officer does not make a decision in the case but assists the parties in evaluating the strengths and weaknesses of the case and in negotiating a settlement. Settlement conferences are appropriate in any case where settlement is an option. Mandatory settlement conferences are often held close to the date a case is set for trial. Settlement conferences are meetings which are typically conducted by a settlement judge or referee to assist the parties in reaching a mutually acceptable settlement of the disputed matter. Agencies may have their own settlement conferences without the presence of an EEOC administrative judge, provided the parties agree. The role of the settlement judge is similar to that of a mediator in that the judge assists the parties procedurally in negotiating an agreement. Some judges may provide the parties with specific MBA (FULL TIME) SEMESTER I 32
  33. 33. Alternative Dispute Resolution (ADR) GROUP 5 substantive and legal information about what the disposition of the case might be if it were to go to court or hearing. The judge may also provide the parties with possible settlement ranges for their consideration. 7. Facilitation Facilitation involves the use of techniques to improve the flow of information in a meeting between parties to a dispute. The term facilitator is often used interchangeably with the term mediator, but a facilitator does not typically become as involved in the substantives issues as does a mediator. The facilitator focuses more on the process involved in resolving a matter. The facilitator generally works with all of the participants at once and provides procedural directions as to how the group can efficiently move through the problem-solving steps of the meeting and arrive at the jointly agreed upon goal. The facilitator focuses on procedural assistance and remains impartial to the topics under discussion. How does it work? • Everyone involved comes to one, or several meetings, run by the facilitator • The facilitator helps to identify problems to be solved and tasks to be accomplished • Facilitators don't impose a decision • The people at the meeting make a group decision on actions and outcomes MBA (FULL TIME) SEMESTER I 33
  34. 34. Alternative Dispute Resolution (ADR) GROUP 5 When is it used? Facilitation can be used to avoid a dispute by providing a forum for different points of view to be discussed. It can be used for complex planning and environmental matters. It can also be used where people are having difficulty working together, e.g. in: • Clubs • Body corporates • Workplace & Community organizations. 8. Minitrials Minitrials involve a structured settlement process in which both parties present abbreviated summaries of their case before the other party and/or their representatives who have authority to settle the dispute. The summaries contain explicit data about the legal bases and the merits of the case. The process generally follows more relaxed rules for discovery and case presentation than might be found in a court, and the parties usually agree on specific limited periods of time for presentations and arguments. 9 Conciliation Conciliation is a process in which the people in dispute try to reach an agreement with the assistance and advice of an impartial person (the conciliator). The conciliator usually has some experience of the subject of the dispute and can advise the parties what their rights and obligations are. Discussions are confined to the subject matter of the dispute. How does it work? MBA (FULL TIME) SEMESTER I 34
  35. 35. Alternative Dispute Resolution (ADR) GROUP 5 • Conciliation can only work if both parties are prepared to work towards a resolution • It is confidential • The conciliator may advise on how the conciliation process should take place • They can often advise on what people's legal rights and responsibilities are and what a reasonable outcome might be • They may then act as a 'go-between' by talking to each person separately and relaying offers or proposals between them • Ultimately the outcome is up to the individuals involved. The conciliator does not impose a decision When is it used? Conciliation can use for disputes where you need to uphold your rights, or need advice on what your rights and responsibilities are, e.g.: • Work cover • Equal Opportunity • Consumer disputes 10. Negotiation Negotiation is an informal bargaining process. It takes place directly between the people in dispute, but can be assisted by others e.g. lawyers, advocates. MBA (FULL TIME) SEMESTER I 35
  36. 36. Alternative Dispute Resolution (ADR) GROUP 5 How does it work? The people involved in the dispute communicate directly to try and reach an agreement. Communication may be written or spoken and may take some time. Effective negotiators know that it is hard to reach an agreement unless everyone feels they get some benefit (a 'win-win' situation). When is it used? Negotiation is a good first step for almost any type of dispute, including family, neighbourhood, commercial, and consumer disputes. If negotiation fails, you might benefit from other more formal types of ADR. 11. Arbitration In arbitration, a neutral person called an “arbitrator” hears arguments and evidence from each side and then decides the outcome of the dispute. Arbitration is less formal than a trial, and the rules of evidence are often relaxed. Arbitration may be either “binding” or “nonbinding.” Binding arbitration means that the parties waive their right to a trial and agree to accept the arbitrator’s decision as final. Generally, there is no right to appeal an arbitrator’s decision. Nonbinding arbitration means that the parties are free to request a trial if they do not accept the arbitrator’s decision. “An Arbitration is a reference to the decision of one or more persons of a particular matter in difference between the parties”. Arbitration is a simplified version of a trial involving no discovery and simplified rules of evidence. Either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third to comprise a panel. MBA (FULL TIME) SEMESTER I 36
  37. 37. Alternative Dispute Resolution (ADR) GROUP 5 Arbitration hearings usually last only a few hours or a few sessions and the opinions are not public record. Arbitration has long been used in construction, commercial recovery cases, insurance matters, employment contracts, securities regulation and so on, but is now gaining popularity in other business disputes. In the Indian context, the Arbitration and Conciliation Act, 1996 (the “Act”) was a natural outgrowth of the process of economic liberalization that began in 1991. Foreign investment and trade grew rapidly during the early 1990’s as a result of the economic reform process. But it soon became clear that the Indian Arbitration Act, 1940 did not provide a speedy, effective and transparent mechanism to address disputes arising out of foreign trade and investment transactions. Infact, the Code of Civil Procedure, 1908 (amended in 2002) has laid down that cases must be encouraged to go in for ADR so as to lessen the burden of the courts. In the 1940 Act, there was no provision for enforcement of Foreign Awards and one had to rely upon the Foreign Awards (Recognition and Enforcement) Act, 1961. Furthermore, there was vast scope for judicial intervention in the 1940 Act, which was an impediment for ADR. In order to remedy such disabilities in the 1940 Act, the Act of 1996 was enacted, which aims to minimize judicial intervention and also has provisions for enforcement of foreign awards. The Act is in keeping with the provisions of the Geneva Convention and the New York Convention. India being a signatory to both the conventions, has to safe guard the interests of other member and signatory nations, else its interests would be jeopardized in other member states. MBA (FULL TIME) SEMESTER I 37
  38. 38. Alternative Dispute Resolution (ADR) GROUP 5 Further, it is interesting to note that almost any type of civil dispute can be settled by ADR. Some of the most common types of disputes that can be arbitrated (or resolved through any other method of ADR) are: • Property • Insurance • Contract (including employment contracts) • Business / partnership disputes • Family disputes • Construction • Commercial recoveries However, in India, cases involving insolvency, matrimony, criminal matters, torts etc.,1 [13] cannot be arbitrated and / or resolved by means of ADR. Cases for Which Arbitration May Be Appropriate: Arbitration is best for cases where the parties want another person to decide the outcome of their dispute for them but would like to avoid the formality, time, and expense of a trial. It may also be appropriate for complex matters where the parties want a decision-maker who has training or experience in the subject matter of the dispute. Cases for Which Arbitration May Not Be Appropriate: 1 MBA (FULL TIME) SEMESTER I 38
  39. 39. Alternative Dispute Resolution (ADR) GROUP 5 If parties want to retain control over how their dispute is resolved, arbitration, particularly binding arbitration, is not appropriate. In binding arbitration, the parties generally cannot appeal the arbitrator’s award, even if it is not supported by the evidence or the law. Even in nonbinding arbitration, if a party requests a trial and does not receive a more favorable result at trial than in arbitration, there may be penalties. MBA (FULL TIME) SEMESTER I 39
  40. 40. Alternative Dispute Resolution (ADR) GROUP 5 As we have seen the different technique of adr. Let us see the most important adr technique which is used worldwide. Those are mediation & arbitration which are discussed in detail below:- MEDIATION  Purpose  Case Selection/Objection  Listing of Mediators: Commission Registry of mediators  Selection of Mediators  Qualifications of Mediators  Mediation Costs  Mediation Procedure  Rules of Evidence  Discovery  Sanctions  Confidentiality  Purpose Mediation under this section involves the confidential process by which a neutral, acting as a mediator, selected by the parties or appointed by the court, assists the litigants in reaching a mutually acceptable agreement. The role of the mediator is to assist in identifying the issues, reducing misunderstanding, clarifying priorities, exploring areas of compromise, and MBA (FULL TIME) SEMESTER I 40
  41. 41. Alternative Dispute Resolution (ADR) GROUP 5 finding points of agreement as well as legitimate points of disagreement. Any agreement reached by the parties is to be based on the autonomous decisions of the parties and not the decisions of the mediator. It is anticipated that an agreement may not resolve all of the disputed issues, but the process can reduce points of contention. Parties and their representatives are required to mediate in good faith, but are not compelled to reach an agreement.  Case Selection/Objection At any time fifteen (15) days or more after the period allowed for peremptory change of judge under Trial Rule 76(B) has expired, a court may on its own motion or upon motion of any party refer a civil or domestic relations case to mediation. After a motion referring a case to mediation is granted, a party may object by filing a written objection within seven (7) days in a domestic relations case or fifteen (15) days in a civil case. The party must specify the grounds for objection. The court shall promptly consider the objection and any response and determine whether the litigation should then be mediated or not. In this decision, the court shall consider the willingness of the parties to mutually resolve their dispute, the ability of the parties to participate in the mediation process, the need for discovery and the extent to which it has been conducted, and any other factors which affect the potential for fair resolution of the dispute through the mediation process. If a case is ordered for mediation, the case shall remain on the court docket and the trial calendar. MBA (FULL TIME) SEMESTER I 41
  42. 42. Alternative Dispute Resolution (ADR) GROUP 5  Listing of Mediators: Commission Registry of Mediators Any person who wishes to serve as a registered mediator pursuant to these rules must register with the Indiana Supreme Court Commission for Continuing Legal Education (hereinafter "Commission") on forms supplied by the Commission. The registrants must meet qualifications as required in counties or court districts (as set out in Ind. Administrative Rule 3(A)) in which they desire to mediate and identify the types of litigation which they desire to mediate. Two or more persons individually who are qualified under A.D.R. Rule 2.5 may register as a mediation team. All professional licenses must be disclosed and identified in the form which the Commission requires. The registration form shall be accompanied by a fee of $50.00. An annual fee of $50.00 shall be due the second June 30th following initial registration. Registered mediators will be billed at the time their annual statements are sent. No fee shall be required of a full-time, sitting judge. The Commission shall maintain a list of registered mediators including the following information: (1) Whether the person qualified under A.D.R. Rule 2.5 to mediate domestic relations and/or civil cases; (2) The counties or court districts in which the person desires to mediate; (3) The type of litigation the person desires to mediate; and (4) Whether the person is a full-time judge. The Commission may remove a registered mediator from its registry for failure to meet or to maintain the requirements of A.D.R. Rule 2.5 for non- payment of fees. A registered mediator must maintain a current business and MBA (FULL TIME) SEMESTER I 42
  43. 43. Alternative Dispute Resolution (ADR) GROUP 5 residential address and telephone number with the Commission. Failure to maintain current information required by these rules may result in removal from the registry. On or before May 31 of each year, each registered mediator will be sent an annual statement showing the mediator's educational activities that have been approved for mediator credit by the Commission.  Selection of Mediators Upon an order referring a case to mediation, the parties may within seven 7 days in a domestic relations case or within fifteen 15 days in a civil case: (1) Choose a mediator from the Commission's registry, or (2) Agree upon a non-registered mediator, who must be approved by the trial court and who serves with leave of court. In the event a mediator is not selected by agreement, the court will designate three (3) Registered mediators from the Commission's registry who are willing to mediate within the Court's district as set out in Admin. R. 3 (A). Alternately, each side shall strike the name of one mediator. The side initiating the lawsuit will strike first. The mediator remaining after the striking process will be deemed the selected mediator. A person selected to serve as a mediator under this rule may choose not to serve for any reason. At any time, a party may request the court to replace the mediator for good cause shown. In the event a mediator chooses not to serve or the court decides to replace a mediator, the selection process will be repeated. MBA (FULL TIME) SEMESTER I 43
  44. 44. Alternative Dispute Resolution (ADR) GROUP 5  Qualifications of Mediators (A) Civil Cases: Educational Qualifications. (1) Subject to approval by the court in which the case is pending, the parties may agree upon any person to serve as a mediator. (2) In civil cases, a registered mediator must be an attorney in good standing with the Supreme Court of Indiana. (3) To register as a civil mediator, a person must meet all the requirements of this rule and must have either: (1) taken at least forty (40) hours of Commission approved civil mediation training in the three (3) years immediately prior to submission of the registration application, or (2) completed forty (40) hours of Commission approved civil mediation training at any time and taken at least six (6) hours of approved Continuing Mediation Education in the three (3) years immediately prior to submission of the registration application. (4) However, a person who has met the requirements of A.D.R. Rule 2.5(B)(2)(a), is registered as a domestic relations mediator, and by December 31 of the second full year after meeting those requirements completes a Commission approved civil crossover mediation training program may register as a civil mediator. MBA (FULL TIME) SEMESTER I 44
  45. 45. Alternative Dispute Resolution (ADR) GROUP 5 (5) As part of the judge’s judicial service, a judge may serve as a mediator in a case pending before another judicial officer. (B) Domestic Relations Cases: Educational Qualifications. (1) Subject to approval of the court, in which the case is pending, the parties may agree upon any person to serve as a mediator. (2) In domestic relations cases, a registered mediator must be either: (a) an attorney, in good standing with the Supreme Court of Indiana; (b) a person who has a bachelor's degree or advanced degree from an accredited institution of higher learning. Notwithstanding the provisions of (2)(a) and (b) above, any licensed professional whose professional license is currently suspended or revoked by the respective licensing agency, or has been relinquished voluntarily while a disciplinary action is pending, shall not be a registered mediator. (3) To register as a domestic relations mediator, a person must meet all the requirements of this rule and must have either: (1) taken at least forty hours of Commission approved domestic relations mediation training in the three (3) years immediately prior to submission of the registration application, or (2) taken at least forty (40) hours of Commission approved domestic relations mediation training at any time, and taken at least six (6) hours of approved Continuing Mediation Education in the MBA (FULL TIME) SEMESTER I 45
  46. 46. Alternative Dispute Resolution (ADR) GROUP 5 three (3) years immediately prior to submission of the registration application. (4) However, if a person is registered as a civil mediator and by December 31 of the second full year after meeting those requirements completes a Commission approved domestic relations crossover mediation training program (s) he may register as a domestic relations mediator. (5) As part of the judge’s judicial service, a judge may serve as a mediator in a case pending before another judicial officer. (C) Continuing Mediation Education (“CME”) Requirements for All Registered Mediators. A registered mediator must complete a minimum of six hours of Commission approved continuing mediation education anytime during a three-year educational period. A mediator’s initial educational period commences January 1 of the first full year of registration and ends December 31 of the third full year. Educational periods shall be sequential, in that once a mediator’s particular three-year period terminates, a new three-year period and six hour minimum shall commence. (1) Mediators registered before the effective date of this rule shall begin their first three-year educational period January 1, 2004. (2) Attorney mediators may petition the Commission to align their three- year mediator educational period with their three-year continuing legal education educational period. During the period of realignment, attorney mediators must report a prorated number of continuing mediation hours. MBA (FULL TIME) SEMESTER I 46
  47. 47. Alternative Dispute Resolution (ADR) GROUP 5 (D) Basic Continuing Mediation Education Reporting Requirements. Within thirty (30) days of presenting a Commission approved basic or continuing mediation education training course, the sponsor of that course must forward a list of attendees to the Commission. This list shall include for each attendee: full name; attorney number (if applicable); residence and business addresses and phone numbers; and the number of mediation hours attended. A course approved for CME may also qualify for CLE credit, so long as the course meets the requirements of Admission and Discipline Rule 29. For courses approved for both continuing legal education and continuing mediation education, the sponsor must additionally report continuing legal education, speaking and professional responsibility hours attended. (E) Accreditation Policies and Procedures for CME. (1) Approval of courses. The Commission shall approve the course, including law school classes, if it determines that the course will make a significant contribution to the professional competency of mediators who attend. In determining if a course, including law school classes, meets this standard the Commission shall consider whether: (a) the course has substantial content dealing with alternative dispute resolution process; (b) the course deals with matters related directly to the practice of alternative dispute resolution and the professional responsibilities of neutrals; (c) the course deals with reinforcing and enhancing alternative dispute resolution and negotiation concepts and skills of neutrals; MBA (FULL TIME) SEMESTER I 47
  48. 48. Alternative Dispute Resolution (ADR) GROUP 5 (d) the course teaches ethical issues associated with the practice of alternative dispute resolution; (e) the course deals with other professional matters related to alternative dispute resolution and the relationship and application of alternative dispute resolution principles; (f) the course deals with the application of alternative dispute resolution skills to conflicts or issues that arise in settings other than litigation, such as workplace, business, commercial transactions, securities, intergovernmental, administrative, public policy, family, guardianship and environmental; and, (g) In the case of law school classes, in addition to the standard set forth above the class must be a regularly conducted class at a law school accredited by the American Bar Association. (2) Credit will be denied for the following activities: (a) Legislative, lobbying or other law-making activities. (b)In-house program. The Commission shall not approve programs which it determines are primarily designed for the exclusive benefit of mediators employed by a private organization or mediation firm. Mediators within related companies will be considered to be employed by the same organization or law firm for purposes of this rule. However, governmental entities may sponsor programs for the exclusive benefit of their mediator employees. (c) Programs delivered by these methods: satellite, microwave, video, computer, internet, telephone or other electronic methods. To be MBA (FULL TIME) SEMESTER I 48
  49. 49. Alternative Dispute Resolution (ADR) GROUP 5 approved courses must provide a discussion leader or two-way communication, classroom setting away from the mediator’s offices, opportunity to ask questions, and must monitor attendance. (d) Courses or activities completed by self-study. (e) Programs directed to elementary, high school or college student level neutrals. (3) Procedures for Sponsors. Any sponsor may apply to the Commission for approval of a course. The application must: (a) Be submitted to the Commission at least thirty (30) days before the first date on which the course is to be offered; (b)Contain the information required by and be in the form approved by the Commission and available upon request or at the Commission’s web site: www.in.gov/judiciary/cle; and (c) Be accompanied by the written course outline and brochure used to furnish information about the course to mediators. (4) Procedure for Mediators. A mediator may apply for credit of a course either before or after the date on which it is offered. The application must: (a) Contain the information required by and be in the form approved by the Commission and available upon request or at the Commission’s web site: www.in.gov/judiciary/cle; (b) Be accompanied by the written course outline and brochure used to furnish information about the course to mediators; and, (c) Be accompanied by an affidavit of the mediator attesting that the mediator attended the course together with a certification of the course Sponsor as to the mediator’s attendance. If the application for course MBA (FULL TIME) SEMESTER I 49
  50. 50. Alternative Dispute Resolution (ADR) GROUP 5 approval is made before attendance, this affidavit and certification requirement shall be fulfilled within thirty (30) days after course attendance. (F) Procedure for Resolving Disputes. Any person who disagrees with a decision of the Commission and is unable to resolve the disagreement informally, may petition the Commission for a resolution of the dispute. Petitions pursuant to this Section shall be considered by the Commission at its next regular meeting, provided that the petition is received by the Commission at least ten (10) business days before such meeting. The person filing the petition shall have the right to attend the Commission meeting at which the petition is considered and to present relevant evidence and arguments to the Commission. The rules of pleading and practice in civil cases shall not apply, and the proceedings shall be informal as directed by the Chair. The determination of the Commission shall be final subject to appeal directly to the Supreme Court. (G) Confidentiality. Filings with the Commission shall be confidential. These filings shall not be disclosed except in furtherance of the duties of the Commission or upon the request, by the mediator involved, or as directed by the Supreme Court. (H) Rules for Determining Education Completed. (1) Formula. The number of hours of continuing mediation education completed in any course by a mediator shall be computed by: MBA (FULL TIME) SEMESTER I 50
  51. 51. Alternative Dispute Resolution (ADR) GROUP 5 (a) Determining the total instruction time expressed in minutes; (b) Dividing the total instruction time by sixty (60); and (c) Rounding the quotient up to the nearest one-tenth (1/10). (2) Instruction Time Defined Instruction time is the amount of time when a course is in session and presentations or other educational activities are in progress. Instruction time does not include time spent on: (a) Introductory remarks; (b) Breaks; or (c) Business meetings (3) A registered mediator who participates as a teacher, lecturer, panelist or author in an approved continuing mediation education course will receive credit for: (a) Four (4) hours of approved continuing mediation education for every hour spent in presentation. (b) One (1) hour of approved continuing mediation education for every four (4) hours of preparation time for a contributing author who does not make a presentation relating to the materials prepared. (c) One (1) hour of approved continuing mediation education for every hour the mediator spends in attendance at sessions of a course other than those in which the mediator participates as a teacher, lecturer or panel member. (d) Mediators will not receive credit for acting as a speaker, lecturer or panelist on a program directed to elementary, high school or college MBA (FULL TIME) SEMESTER I 51
  52. 52. Alternative Dispute Resolution (ADR) GROUP 5 student level neutrals, or for a program that is not approved under Alternative Dispute Resolution Rule.  Mediation Costs Absent an agreement by the parties, including any guardian ad litem, court appointed special advocate, or other person properly appointed by the court to represent the interests of any child involved in a domestic relations case, the court shall set an hourly rate for mediation and determine the division of such costs by the parties. The costs should be predicated on the complexity of the litigation, the skill levels needed to mediate the litigation, and the litigants' ability to pay. The mediation costs shall be paid within thirty (30) days after the close of each mediation session.  Mediation Procedure (A) Advisement of Participants. The mediator shall: (1) Advise the parties of all persons whose presence at mediation might facilitate settlement; and (2) In child related matters, ensure that the parties consider fully the best interests of the children and that the parties understand the consequences of any decision they reach concerning the children. (B) Mediation Conferences. (1) The parties and their attorneys shall be present at all mediation sessions involving domestic relations proceedings unless otherwise agreed. At the discretion of the mediator, non-parties to the dispute may also be present. MBA (FULL TIME) SEMESTER I 52
  53. 53. Alternative Dispute Resolution (ADR) GROUP 5 (2) All parties, attorneys with settlement authority, representatives with settlement authority, and other necessary individuals shall be present at each mediation conference to facilitate settlement of a dispute unless excused by the court. (3) A child involved in a domestic relations proceeding, by agreement of the parties or by order of the court, may be interviewed by the mediator out of the presence of the parties or attorneys. (4) Mediation sessions are not open to the public. (C) Confidential Statement of Case Each side may submit to the mediator a confidential statement of the case not to exceed ten (10) pages, prior to a mediation conference, which shall include: (1) The legal and factual contentions of the respective parties as to both liability and damages; (2) The factors considered in arriving at the current settlement posture; and (3) The status of the settlement negotiations to date. A confidential statement of the case may be supplemented by damage brochures, videos, and other exhibits or evidence. The confidential statement of the case shall at all times be held privileged and confidential from other parties unless agreement to the contrary is provided to the mediator. In the mediation process, the mediator may meet jointly or separately with the parties and may express an evaluation of the case to one or more of the parties or their representatives. This evaluation may be expressed in the form of settlement ranges rather than exact amounts. MBA (FULL TIME) SEMESTER I 53
  54. 54. Alternative Dispute Resolution (ADR) GROUP 5 (D) Termination of Mediation The mediator shall terminate mediation whenever the mediator believes that continuation of the process would harm or prejudice one or more of the parties or the children or whenever the ability or willingness of any party to participate meaningfully in mediation is so lacking that a reasonable agreement is unlikely. At any time after two (2) sessions have been completed, any party may terminate mediation. The mediator shall not state the reason for termination except when the termination is due to conflict of interest or bias on the part of the mediator, in which case another mediator may be assigned by the court. According to the procedures set forth herein, if the court finds after hearing that an agreement has been breached, sanctions may be imposed by the court. (E) Report of Mediation: Status. (1) Within ten (10) days after the mediation, the mediator shall submit to the court, without comment or recommendation, a report of mediation status. The report shall indicate that an agreement was or was not reached in whole or in part or that the mediation was extended by the parties. If the parties do not reach any agreement as to any matter as a result of the mediation, the mediator shall report the lack of any agreement to the court without comment or recommendation. With the consent of the parties, the mediator's report may also identify any pending motions or outstanding legal issues, discovery process, or other action by any party which, if resolved or completed, would facilitate the possibility of a settlement. (2) If an agreement is reached, in whole or in part, it shall be reduced to writing and signed by the parties and their counsel. In domestic relations matters, the agreement shall then be filed with the court. If MBA (FULL TIME) SEMESTER I 54
  55. 55. Alternative Dispute Resolution (ADR) GROUP 5 the agreement is complete on all issues, a joint stipulation of disposition shall be filed with the court. In all other matters, the agreement shall be filed with the court only by agreement of the parties. (3) In the event of any breach or failure to perform under the agreement, upon motion, and after hearing, the court may impose sanctions, including entry of judgment on the agreement.  Rules of Evidence With the exception of privileged communications, the rules of evidence do not apply in mediation, but factual information having a bearing on the question of damages should be supported by documentary evidence whenever possible.  Discovery Whenever possible, parties are encouraged to limit discovery to the development of information necessary to facilitate the mediation process. Upon stipulation by the parties or as ordered by the court, discovery may be deferred during mediation pursuant to Indiana Rules of Procedure, Trial Rule 26(C).  Sanctions Upon motion by either party and hearing, the court may impose sanctions against any attorney, or party representative who fails to comply with these mediation rules, limited to assessment of mediation costs and/or attorney fees relevant to the process. MBA (FULL TIME) SEMESTER I 55
  56. 56. Alternative Dispute Resolution (ADR) GROUP 5  Confidentiality Mediation shall be regarded as settlement negotiations as governed by Ind.Evidence Rule 408. For purposes of reference, Evid.R. 408 provides as follows: Rule 408. Compromise and Offers to Compromise Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise a claim, which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. Compromise negotiations encompass alternative dispute resolution. Mediation sessions shall be closed to all persons other than the parties of record, their legal representatives, and other invited persons. Mediators shall not be subject to process requiring the disclosure of any matter discussed during the mediation, but rather, such matter shall be considered confidential and privileged in nature. The confidentiality requirement may not be waived by the parties, and an objection to the obtaining of testimony or physical evidence from mediation may be made by any party or by the mediators. MBA (FULL TIME) SEMESTER I 56
  57. 57. Alternative Dispute Resolution (ADR) GROUP 5 ARBITRATION  Agreement to Arbitrate  Case Status During Arbitration  Assignment of Arbitrators  Arbitration Procedure  Sanctions  Agreement to Arbitrate At any time fifteen (15) days or more after the period allowed for a peremptory change of venue under Trial Rule 76(B) has expired, the parties may file with the court an agreement to arbitrate wherein they stipulate whether arbitration is to be binding or non-binding, whether the agreement extends to all of the case or is limited as to the issues subject to arbitration, and the procedural rules to be followed during the arbitration process. Upon approval, the agreement to arbitrate shall be noted on the Chronological Case Summary of the Case and placed in the Record of Judgments and Orders for the court.  Case Status during Arbitration During arbitration, the case shall remain on the regular docket and trial calendar of the court. In the event the parties agree to be bound by the arbitration decision on all issues, the case shall be removed from the trial MBA (FULL TIME) SEMESTER I 57
  58. 58. Alternative Dispute Resolution (ADR) GROUP 5 calendar. During arbitration the court shall remain available to rule and assist in any discovery or pre-arbitration matters or motions.  Assignment of Arbitrators Each court shall maintain a listing of lawyers engaged in the practice of law in the State of Indiana who are willing to serve as arbitrators. Upon assignment of a case to arbitration, the plaintiff and the defendant shall, pursuant to their stipulation, select one or more arbitrators from the court listing or the listing of another court in the state. If the parties agree that the case should be presented to one arbitrator and the parties do not agree on the arbitrator, then the court shall designate three (3) arbitrators for alternate striking by each side. The party initiating the lawsuit shall strike first. If the parties agree to an arbitration panel, it shall be limited to three (3) persons. If the parties fail to agree on who should serve as members of the panel, then each side shall select one arbitrator and the court shall select a third. When there is more than one arbitrator, the arbitrators shall select among themselves a Chair of the arbitration panel. Unless otherwise agreed between the parties, and the arbitrators selected under this provision, the Court shall set the rate of compensation for the arbitrator. Costs of arbitration are to be divided equally between the parties and paid within thirty (30) days after the arbitration evaluation, regardless of the outcome. Any arbitrator selected may refuse to serve without showing cause for such refusal. MBA (FULL TIME) SEMESTER I 58
  59. 59. Alternative Dispute Resolution (ADR) GROUP 5  Arbitration Procedure (A) Notice of Hearing. Upon accepting the appointment to serve, the arbitrator or the Chair of an arbitration panel shall meet with all attorneys of record to set a time and place for an arbitration hearing. (Courts are encouraged to provide the use of facilities on a regular basis during times when use is not anticipated, i.e. jury deliberation room every Friday morning.) (B) Submission of Materials. Unless otherwise agreed, all documents the parties desire to be considered in the arbitration process shall be filed with the arbitrator or Chair and exchanged among all attorneys of record no later than fifteen (15) days prior to any hearing relating to the matters set forth in the submission. Documents may include medical records, bills, records, photographs, and other material supporting the claim of a party. In the event of binding arbitration, any party may object to the admissibility of these documentary matters under traditional rules of evidence; however, the parties are encouraged to waive such objections and, unless objection is filed at least five (5) days prior to hearing, objections shall be deemed waived. In addition, no later than five (5) days prior to hearing, each party may file with the arbitrator or Chair a pre-arbitration brief setting forth factual and legal positions as to the issues being arbitrated; if filed, pre-arbitration briefs shall be served upon the opposing party or parties. The parties may in their Arbitration Agreement alter the filing deadlines. They are encouraged to use the provisions of Indiana's Arbitration Act (IC 34-57-1-1 et seq.) and the Uniform Arbitration Act (IC 34-57-2-1 et seq.) to the extent possible and appropriate under the circumstances. MBA (FULL TIME) SEMESTER I 59
  60. 60. Alternative Dispute Resolution (ADR) GROUP 5 (C) Discovery. Rules of discovery shall apply. Thirty (30) days before an arbitration hearing, each party shall file a listing of witnesses and documentary evidence to be considered. The listing of witnesses and documentary evidence shall be binding upon the parties for purposes of the arbitration hearing only. The listing of witnesses shall designate those to be called in person, by deposition and/or by written report. (D) Hearing. Traditional rules of evidence need not apply with regard to the presentation of testimony. As permitted by the arbitrator or arbitrators, witnesses may be called. Attorneys may make oral presentation of the facts supporting a party's position and arbitrators are permitted to engage in critical questioning or dialogue with representatives of the parties. In this presentation, the representatives of the respective parties must be able to substantiate their statements or representations to the arbitrator or arbitrators as required by the Rules of Professional Conduct. The parties may be permitted to demonstrate scars, disfigurement, or other evidence of physical disability. Arbitration proceedings shall not be open to the public. (E) Confidentiality. Arbitration proceedings shall be considered as settlement negotiations as governed by Ind.Evidence Rule 408. For purposes of reference, Evid.R. 408 provides as follows: Rule 408. Compromise and Offers to Compromise Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise a claim, which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements MBA (FULL TIME) SEMESTER I 60
  61. 61. Alternative Dispute Resolution (ADR) GROUP 5 made in compromise negotiations is likewise not admissible. This rule does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. Compromise negotiations encompass alternative dispute resolution. (F) Arbitration Determination. Within twenty (20) days after the hearing, the arbitrator or Chair shall file a written determination of the arbitration proceeding in the pending litigation and serve a copy of this determination on all parties participating in the arbitration. If the parties had submitted this matter to binding arbitration on all issues, the court shall enter judgment on the determination. If the parties had submitted this matter to binding arbitration on fewer than all issues, the court shall accept the determination as a joint stipulation by the parties and proceed with the litigation. If the parties had submitted the matter to nonbinding arbitration on any or all issues, they shall have twenty (20) days from the filing of the written determination to affirmatively reject in writing the arbitration determination. If a nonbinding arbitration determination is not rejected, the determination shall be entered as the judgment or accepted as a joint stipulation as appropriate. In the event a nonbinding arbitration determination is rejected, all documentary evidence will be returned to the parties and the determination and all acceptances and rejections shall be sealed and placed in the case file. MBA (FULL TIME) SEMESTER I 61
  62. 62. Alternative Dispute Resolution (ADR) GROUP 5  Sanctions Upon motion by both party and hearing, the court may impose sanctions against any party or attorney who fails to comply with the arbitration rules, limited to the assessment of arbitration costs and/or attorney fees relevant to the arbitration process. ADR Procedures ADR procedures can be broadly divided into two categories namely, adjudicatory and non adjudicatory. The adjudicatory procedures such as arbitration and binding expert determination lead to a binding ruling that decides the case. The non-adjudicatory procedures contribute to resolution of disputes by agreement of the parties without adjudication such as Negotiation, Mediation and Conciliation. Mediation is different from Conciliation only in that in the former the neutral third party plays a more active role in putting forward his own suggestions for the settlement of the dispute. A brief description of few ADR procedures widely used is as follows: Negotiation : A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement of the dispute. Conciliation Mediation: A non-binding procedure in which an impartial third party, the conciliator/mediator, assists the parties to a dispute in reaching a mutually satisfactory and agreed settlement of the dispute. MBA (FULL TIME) SEMESTER I 62
  63. 63. Alternative Dispute Resolution (ADR) GROUP 5 Med-Arb: A procedure which combines sequentially conciliation/Mediation and where the dispute is not settled through conciliation/mediation within a period of time agreed in advance by the parties, arbitration. MEDOLA : A procedure in which if the parties fail to reach an agreement through mediation, a neutral person, who may be the original mediator or an arbitrator, will select between the final negotiated offers of parties such selection being binding on the parties. Mini-Trial : A non binding procedure in which the disputing parties are presented with summaries of their cases to enable them to assess the strengths, weaknesses, and prospects of their case and then an opportunity to negotiate a settlement with the assistance of a neutral adviser. Arbitration: A procedure in which the dispute is submitted to an arbitral tribunal which makes a decision (an `award') on the dispute that is binding on the parties. Fast track Arbitration: A form of arbitration in which the arbitration procedure is rendered in a particularly short time and at reduced cost. Neutral listener Agreement: Parties to a dispute discuss their respective best settlement offer in confidence with a neutral third party who, after his own evaluation, suggests settlements to assist the parties to attempt a negotiated settlement. Rent a judge: Disputing parties mutually approach a referee, usually a retired judge, before whom they present their case in informal proceedings. The referee judge gives his decision which is enforceable in a court of law. The fee of the referee is paid by the parties. Final offer arbitration: Each party submits its monetary claim before a MBA (FULL TIME) SEMESTER I 63
  64. 64. Alternative Dispute Resolution (ADR) GROUP 5 panel that renders its decision by awarding one and rejecting the other claim. Key Elements to Implementing a Successful ADR Program 1. Review the Administrative Dispute Resolution Act of 1996 and the Presidential Memorandum of May 1, 1998, for legislative and executive guidance. 2. Learn as much as possible about existing federal ADR program structures to avoid unnecessary duplication of effort in creating your agency's program. 3. Visit the Working Group's ADR website at http://www.adr.gov/ to obtain useful ADR documents, get recent updates on federal ADR developments, and participate in newsgroup discussions with ADR experts in other federal offices. 4. Ensure that your agency makes a long-term commitment by senior leadership to the establishment of an ADR program, pursuant to the Presidential Memorandum. 5. If your agency does not yet have a policy statement on the use of ADR, encourage your agency leadership to adopt the ADR MBA (FULL TIME) SEMESTER I 64
  65. 65. Alternative Dispute Resolution (ADR) GROUP 5 Declaration of Policy prepared by the Working Group which is provided on the Working Group's website. 6. Secure the financial resources, dedicated staffing, and expertise necessary to establish and operate a federal ADR program. This includes a support structure to match agency ADR needs with appropriate agency or private-sector ADR resources. 7. If your agency has not yet done so, appoint a Dispute Resolution Specialist as required by the 1996 Act, so that there will be a clear point of contact for those wishing to use the agency's ADR program. 8. Ensure that appropriate agency personnel receive ADR education and skills training which can encompass both the theory and practice of negotiation, mediation, and related ADR techniques for both program managers and the agency's counsel. 9. Review the agency's standard agreements, contracts, grants, and other documents to determine whether to amend such standard agreements to authorize and encourage the use of ADR if disputes arise. Create a system to track ADR use and "lessons learned" to ensure continued progress toward the goals identified in establishing the ADR program. MBA (FULL TIME) SEMESTER I 65
  66. 66. Alternative Dispute Resolution (ADR) GROUP 5 CONCLUSION The practical implementation of amicable settlements has produced good results. Many cases have actually been solved through ADR. There is no doubt that mediation and arbitration are the quickest and possibly the most reliable ways for resolving commercial disputes, especially those relating to international trade, involving technological disputes, commercial recoveries and so on. I also believe that a partial waiver of a party’s rights or interests in any settlement process is generally better for the party than litigation before a court of law regardless of the possibility of winning the case through court. ADR has an impact on economy and commerce, which in turn affects individuals as, wells as corporate entities. Thus, options to litigation should be considered as part of a company’s policy. Arbitration and mediation as alternatives to litigation make good business sense and that the inclusion of arbitration and mediation clauses in their contracts will help to ensure that disputes will be dealt with in a timely and cost effective way. It would not be out of place to discuss, briefly, the importance of dispute management, which is the need of the hour. If companies take more efforts for using more precisely drafted contracts, take better measures to ensure that their relationship and reputation are not harmed and all possible MBA (FULL TIME) SEMESTER I 66
  67. 67. Alternative Dispute Resolution (ADR) GROUP 5 disputes are resolved well in time, may be across the table, then not only will ADR succeed in its objective, but also the corporates will benefit as it will reduce litigation costs, it will save time from that litigation and will also help in preserving relationships. As is said in the practical philosophy of law that lawyers are what their cases have made them, so goes the addendum that a legal system is venerated as it has been handled and managed in course of time. Then only a legacy is left for the future to find it sufficiently germane to be accepted as a proposition of inheritance. The law and legal system should appeal the reasons of people, is not a legal principle but a common sense observation of fact. It is this spirit that has led to the evolution of ADR Mechanisms for the dispensation of justice with efficacy and steadfastness! MBA (FULL TIME) SEMESTER I 67
  68. 68. Alternative Dispute Resolution (ADR) GROUP 5 MBA (FULL TIME) SEMESTER I 68

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