2. AN INTRODUCTION
1. What is ADR?
A. Defining ADR
B. Advantages of ADR
2. Methods in ADR
A. Arbitration
B. Mediation
C. Negotiation
D. Conciliation
E. Other Methods
4. A. DEFINING ADR
ADR is the abbreviation used for the term “Alternate Dispute Resolution”
It refers to any method of resolving disputes without litigation.
ADR regroups all processes and techniques of conflict resolution that occur
outside of any governmental authority.
The most famous ADR methods are the following: mediation, arbitration,
conciliation, negotiation, and transaction.
5. A. DEFINING ADR
All ADR methods have common characteristics – i.e., enabling the parties to find admissible
solutions to their conflicts outside of traditional legal / court proceedings, but are governed
by different rules.
For instance, in negotiation there is no third party who intervenes to help the parties reach an
agreement, unlike in mediation and conciliation, where the purpose of the third party is to
promote an amicable agreement between the parties.
In arbitration, the third party (an arbitrator or several arbitrators) will play an important role as
it will render an arbitration award that will be binding on the parties. In comparison, in
conciliation and mediation, the third party does not impose any binding decision.
If all the ADR methods are different, they should not be compared and confronted because in
practice, the parties combine the use of these different ADRs.
For instance, the parties may stipulate in their contracts that in the event of a dispute they will
first submit to an attempt at amicable settlement (conciliation/mediation) and only in the
event of failure will they resort to a judicial method of settlement, which may be arbitration or
recourse to the State justice system. ADRs therefore come into play at different levels and
have a complementary character.
7. A. ADVANTAGES OF ADR
The main advantages of ADR are rapidity, confidentiality and flexibility.
These processes are generally confidential, less formal, and less stressful than
traditional court proceedings.
ADR often saves money and speeds settlement. In mediation, parties play an
important role in resolving their own disputes. This often results in creative
solutions, longer-lasting outcomes, greater satisfaction, and improved
relationships.
8. A. ADVANTAGES OF ADR
Party Autonomy
Neutrality
Confidentiality
Efficacy
Flexible
Superior Solutions
Lessening Workload of Courts
Cost Savings
10. A. ARBITRATION
A neutral person called an "arbitrator" hears arguments and evidence from each side and
then decides the outcome.
Arbitration is less formal than a trial and the rules of evidence are often relaxed. In binding
arbitration, parties agree to accept the arbitrator’s decision as final, and there is generally no
right to appeal.
In nonbinding arbitration, the parties may request a trial if they do not accept the arbitrator’s
decision.
Arbitration is one of the most emblematic and growing forms of ADR.
Arbitration is more formal than mediation and has a lot of similarities with traditional court
proceedings, involving limited discovery and simplified rules of evidence (ex. hearsay is
usually admissible in arbitration).
11. A. ARBITRATION
Different types of arbitration exist:
national arbitration: for example American arbitration, French arbitration or German arbitration
which are all governed by different rules enacted by the institutions of each country;
international commercial arbitration: usually used to settle disputes that arise from commercial
contractual relations between buyers and sellers who are in two different states;
investor-State arbitration: unilateral referral by private individual investors to an arbitral tribunal
against a host State of their investment.
12. A. ARBITRATION
Other types of arbitration and areas of specialization for this ADR exist, such as construction
arbitration etc.
Arbitration relies on the consent of the parties, therefore the arbitration agreement is
emblematic because it is the gateway to the particular system that is arbitration.
Prior to the dispute occurring, parties usually enter into a binding arbitration agreement or
any other form of agreement with an arbitration clause, that allows them to lay out major
terms for the arbitration process (number of arbitrators, arbitration forum; arbitration rules;
fees etc.).
If parties still have disputes about certain terms before entering into an arbitration they can
petition to a court to resolve a dispute.
13. A. ARBITRATION
The arbitration is headed and decided by an arbitral panel or a single arbitrator, depending
on the agreement of the parties. Arbitrators do not have to be lawyers, parties can select
arbitrators from other fields that they consider more suitable for the resolution of the dispute,
which usually occurs when the arbitration deals with a very specialized topic such as
construction or pharmaceutical issues. Indeed, parties can for example choose an arbitrator
with an engineering background to arbitrate a construction dispute.
To comprise a panel, either both sides agree on one arbitrator, or each side selects one
arbitrator and the two arbitrators elect the third. Arbitration hearings usually last between a
few days to a week, and the panel only meets for a few hours per day. The panel or a single
arbitrator then deliberates and issues a written binding decision or arbitral award. Opinions
are not public record.
In 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
or the "New York Convention", was drafted to aid in the enforcement in domestic courts of
awards granted in foreign countries. In 1970, the United States joined and, as of November
2021, there are 156 countries participating in the convention.
14. A. ARBITRATION
In 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards,
or the "New York Convention", was drafted to aid in the enforcement in domestic courts of
awards granted in foreign countries. In 1970, the United States joined and, as of November
2021, there are 156 countries participating in the convention.
Although Pakistan was one of the Convention's first signatories, it did not ratify the
Convention until 2005 and legislation giving the Convention temporary effect expired in
2010. The Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral
Awards) Act 2011 entered into force in July 2011
16. A. MEDIATION
A neutral person called a "mediator" helps the parties try to reach
a mutually acceptable resolution of the dispute.
The mediator does not decide the case, but helps the parties
communicate so they can try to settle the dispute themselves.
Mediation may be particularly useful when family members,
neighbors, or business partners have a dispute.
Mediation may be inappropriate if a party has a significant
advantage in power or control over the other.
17. A. MEDIATION
Mediation is also an informal alternative to litigation.
Mediators are individuals trained in negotiations, who bring
opposing parties together and attempt to work out a
settlement or agreement that both parties accept or reject.
Mediation is not binding.
Mediation is used for a wide gamut of case-types ranging from
family cases to civil cases.
Mediation has also become a significant method for resolving
disputes between investors and their stock brokers.
18. A. MEDIATION
Mediation, arbitration and litigation have one thing in
common; all process have third impartial party sitting in
for the resolution of the dispute.
However, mediation differs greatly from arbitration and
litigation in the aspect of party control over the dispute.
In mediation the parties have complete control over the
outcome of their dispute; this is not true for the other two
forms of dispute resolution.
19. A. MEDIATION
Mediation is more cost effective, speedier and flexible method of dispute resolution as
compared to litigation. The process can preserve relationships and give parties more
control to devise their own settlement.
Moreover with a very high success rate and resolution on an average of 3-5 days,
mediation is a growing alternative to litigation all over the world and in Pakistan.
For example in its short existence Karachi Centre for Dispute Resolution (KCDR), with a
success rate of 73% has successfully resolved 1,526 cases through mediation, and has
released $ 38.5 billion in the economy.
These figures, include all the mediation cases handled by KCDR in its office, under various
projects and also those resolved by judges to whom KCDR imparted the art of mediation in
its various training programs.
Being cost effective is one of the major plus points for mediation. In litigation people tend
to spend millions and amount awarded to a party of 10 years of litigation does not have
the same value due to consistent rise of inflation.
In Pakistan, a dispute of up to one million rupees costs only seven thousand five hundred
rupees and any dispute of six million rupees and above has a capped fee of fifty thousand
rupees. KCDR has kept such minimal fees so that everyone can afford to settle their
disputes amicably saving not only time and money but also leading a stress free life.
21. C. NEGOTIATION
Negotiation is the preeminent mode of dispute resolution. While the
two most known forms of ADR are arbitration and mediation,
negotiation is almost always attempted first to resolve a dispute.
Negotiation allows the parties to meet in order to settle a dispute.
The main advantage of this form of dispute settlement is that it
allows the parties themselves to control the process and the
solution.
Negotiation is much less formal than other types of ADRs and
allows for a lot of flexibility.
22. C. NEGOTIATION
Negotiation may be defined as any form of direct or indirect communication through
which parties who have conflicting interests discuss the form of any action which they
might take together to manage and ultimately resolve the dispute between them.
Negotiations may be used to resolve an existing problem or to lay the groundwork for
a future relationship between two or more parties. It must be noted that there is no
compulsion for either of the parties to participate in the process of negotiation.
The parties have the free will to either accept or reject the decisions that come out of
the process of negotiation.
There is no restriction in the number of parties that can participate in the process of
negotiation. They can vary from two individuals to the process involving dozens of
parties.
Unlike arbitration and mediation, the outcome of a negotiation is reached by parties
together without resorting to a neutral third party. The process is flexible and
informal also ensures confidentiality at the choice of the parties.
23. C. NEGOTIATION
Negotiation may be defined as any form of direct or indirect communication through
which parties who have conflicting interests discuss the form of any action which they
might take together to manage and ultimately resolve the dispute between them.
Negotiations may be used to resolve an existing problem or to lay the groundwork for
a future relationship between two or more parties. It must be noted that there is no
compulsion for either of the parties to participate in the process of negotiation.
The parties have the free will to either accept or reject the decisions that come out of
the process of negotiation.
There is no restriction in the number of parties that can participate in the process of
negotiation. They can vary from two individuals to the process involving dozens of
parties.
Unlike arbitration and mediation, the outcome of a negotiation is reached by parties
together without resorting to a neutral third party. The process is flexible and
informal also ensures confidentiality at the choice of the parties.
25. D. CONCILIATION
Conciliation is an alternative dispute resolution process whereby the parties to
a dispute use a conciliator, who meets with the parties separately in order to
resolve their differences.
They do this by lowering tensions, improving communications, interpreting
issues, providing technical assistance, exploring potential solutions and bring
about a negotiated settlement.
It differs from Arbitration in that Conciliation is a voluntary proceeding, where
the parties involved are free to agree and attempt to resolve their dispute by
conciliation.
The process is flexible, allowing parties to define the time, structure and
content of the conciliation proceedings. These proceedings are rarely public.
27. E. OTHER METHODS
There are a number of other methods created and made available in a number of other countries.
For instance the US uses following methods:
1. Neutral Evaluation: a neutral person with subject-matter expertise hears abbreviated arguments, reviews the strengths and
weaknesses of each side’s case, and offers an evaluation of likely court outcomes in an effort to promote settlement. The
neutral evaluator may also provide case planning guidance and settlement assistance with the parties' consent.
2. Parenting Coordination (PC): a child-focused process in which a trained and experienced mental health or legal professional
called a “parenting coordinator” assists high-conflict parents to carry out their parenting plan. With prior approval of the
parties and the court, the parenting coordinator may make decisions within the scope of the court order or appointment
contract. The purpose of Parent Coordination is to help parents resolve conflicts regarding their children in a timely manner
and try to promote safe, healthy, and meaningful parent-child relationships.
3. Restorative Justice: a process meant to address an incident of harm, or other dispute, in which stakeholders collectively
identifies and addresses impact, needs and obligations, and create an action plan to move forward.
4. Settlement Conferencing: in settlement conferencing, a judge or the judge’s representative meets with the parties and their
attorneys to try to settle some or all of the issues in dispute before going to trial. Parties’ participation is limited, and the
focus is on narrowing the issues in dispute.
5. Special Master: a neutral appointed by a court to carry out some sort of action on its behalf. This may include overseeing
discovery issues, conferencing cases, or overseeing post-judgment activity.
6. Summary Jury Trials (SJT): In this adversarial dispute resolution process, each side presents its case in a shortened form to a
jury. The jury then makes a decision, which is advisory only, unless parties request that it be a binding decision. A summary
jury trial gives parties a preview of a potential verdict should the case go to trial. SJTs are available in limited jurisdictions.
