The Importance of Alternative Dispute Resolution in Settlement of Civil Claims - Coursework Example

Running head: ALTERNATIVE DISPUTE RESOLUTION The importance of Alternative Dispute Resolution in settlement of civil claims. of the [Name of the University] Alternative Dispute Resolution or ADR is a mechanism that has proved to be very useful in settling civil disputes without involving the court for that purpose. In this method an independent and unbiased third party settles the disputes between the disputing parties. The utilization of the alternative dispute resolution procedure is constantly on the rise in resolving disputes. The Judiciary and legal professionals have increasingly resorted to this stratagem. Lord Woolf’s 1996 report Access to Justice has highlighted the importance of the alternative dispute resolution for engendering the unbiased, fair, speedy and impartial resolution of disputes. The 1999 Civil Procedure Rules have these principles at their core. Moreover, the civil procedure rules refer to alternate dispute resolution in the rules of court and have established some preliminary protocols that have highlighted the importance of an out of court settlement prior to initiation of court proceedings1. Court hearing and litigation are usually the last resort in resolving disputes in England and Wales. Many members of the legal profession are keenly interested in the method of alternative dispute resolution or mediation and this has given it a good deal of prominence. On the main causes for this change in attitude is due to the Lord Woolf’s reforms of April 19992. These reforms bestowed on judges a wide range of powers to enable them to refer disputes to alternative dispute resolution at the preliminary stage and the court dealt only with the management of the case. Due to this the responsibility for the conduct and outcome of the case has been vested with the court. Parties involved in disputes have to present themselves before a judge in case management conferences or pre-trial reviews to state the reasons for having abstained themselves from the mechanism of alternate dispute resolution. Further, the failure to refer a dispute to alternate dispute resolution, in the absence of justifiable reasons, could result in the passing of judicial orders or the application of modified costs3. In other words, alternate dispute resolution is a broad mechanism that includes a wide range of procedures aimed at resolving a dispute as an alternative to court procedures. The devices used in this method are mediation and ombudsmen schemes. An independent, unbiased and neutral mediator adjudicates the dispute between the parties and helps them to arrive at an amicable solution. The mediator does not draft the terms and conditions of this agreement. The disputants decide the terms of the resolution. Mediation is of three types, namely, first, neighbour mediation, second, family mediation and lastly, civil or commercial mediation. Moreover, mediation can be resorted to in respect of disputes regarding the improper or inadequate provision of special educational needs, clinical negligence, etc. The Ombudsmen function as unbiased and fair referees in respect of complaints and disputes that arise in public and private companies. Their duty is to resolve such problems. The office of the Ombudsmen constitutes the last option to be resorted to after all other internal dispute resolving systems fail. In the public sector there could be a Parliamentary Ombudsman, a Local Government Ombudsman or a Health Service Ombudsman. In the private sector the different Ombudsmen include the Financial Ombudsman, the Pensions Ombudsman and the Independent Housing Ombudsman. Commercial mediation is offered by many national mediation providers, during the process of dispute resolution. Since the expenditure involved is more, this process is unsuitable for low value disputes. Courts like the Central London County Court, Exeter, Leeds, Birmingham and Manchester offer mediation to parties to a dispute at a concessional rate. Nevertheless, this type of option is used less frequently. Some non – profit mediation services like the Community Mediation Services offer community mediation. Local authorities will donate funds for most of these services. Some trade association members or members of ombudsmen schemes offer many dispute resolution procedures. The CLS Partnership Innovation Budget of Leicestershire makes available resources for the resolution of consumer disputes. The Disability Conciliation Service is offered by Mediation UK and is financially supported by DRC. It offers conciliation under part III and part IV of the Disability Discrimination Act4. Employment disputes with regard to disability discrimination are taken up by the ACAS or the Advisory, Conciliation and Arbitration Service5. Local Education Authorities have to provide an autonomous disagreement resolution option for parents who are not in agreement with the authorities in respect of special educational requirements. Although, the ACAS makes available to disputing parties several dispute resolution mechanisms like arbitration, conciliation and a tribunal, mediation in disagreements relating to employment are infrequent. The local authorities have conducted some in – house mediation programmes, in order, to address the complaints made by employees. However, the impartiality of in – house mediators is suspect, therefore such programmes have not met with much success. Employment disagreements are in general resolved by commercial mediation providers. The Employment Act (2002) makes it mandatory for every employer to incorporate mediation or conciliation in some form or the other. Those employers who do not take cognizance of this requirement face the risk of having to pay cost penalties at the tribunal stage of hearing. Mediation for family disputes has been provided by a section of the private sector legal professionals and non – profit making mediators. In respect of health care the LCD issued what has been termed as the clinical disputes pre-action protocol, this protocol endorses mediation. A number of commercial mediation providers have made available mediation in cases involving clinical negligence and disagreements in respect of health care. In this connection in 1998, the National Health Service conducted a test programme to resolve clinical disputes. There was no consensus in the analysis of the results and accordingly this programme was not enforced to any significant extent. In June 2002, the LSC commenced a trial programme, the Action for Victims of Medical Accidents (AVMA). This programme required the CEDR and the NHS Litigation Authority to provide the training required to address clinical negligence disputes, to mediators and lawyers. Furthermore, they were required to create and maintain a panel of specialist mediators. In disputes arising in the housing sector, there are many limited ADR schemes. A Self Reliant Housing Ombudsman and a CAB – run community mediation service offer mediation on tenancy deposit problems in a few regions. The IHO tenancy deposit scheme is problematic because it is not mandatory for property owners and this deprives entry to this scheme to several tenants. The Southwark Arbitration Tribunal resolves disputes in respect of housing disrepair, but this is restricted only to the people of Southwark, this makes its applicability and geographical availability extremely limited. The LGO looks into allegations against private property owners, who are also members, and all other social landowners. In respect of welfare benefits, the options provided by the alternate dispute resolution are utilized infrequently. In Cowl and Others v. Plymouth City Council, the City Council was about to close a residential care home. The appellants had refused to adopt Alternative Dispute Resolution. Lord Woolf opined that the courts, in such instances, should conduct meetings where the parties to the dispute could elaborate on the various measures adopted by them to arrive at a solution. He further stated that in such cases alternative dispute resolution would be very fruitful in resolving the extant differences and that after taking into account the exorbitant cost involved, avoidance of this procedure was unjustified6. He also stated that counsel for both parties were duty bound to file the case in court only if all other out of court measures proved to be unsuccessful in resolving the dispute7. The trade associations usually make available the processes of arbitration, conciliation and mediation, which constitute the principal varieties of alternate dispute resolution. Conciliation constitutes the primary step in arbitration in respect of consumer disputes and the person who attempts to bring about conciliation is in general a trade association member. It will be required of both the parties to the dispute to put up the complaint and any evidence in writing. Subsequently, the conciliator will hold forth on the best solution available under the circumstances. No decision taken in this process is to be construed to be binding and the possibility of initiating legal action is never precluded. If there is disagreement in respect of the opinion given, then arbitration or filing a case in a court of law can be considered. In general, there will be no fees for conciliation8. In the process of arbitration, both parties to the dispute agree to legally bind themselves by the decision arrived at by the arbitrator. In this process, there is no option of initiating court action other than to ensure compliance with the arbitrator’s decision. In general, a member of the Chartered Institute of Arbitrators is selected as an arbitrator. These arbitrators usually perform their duty without any reference to the trade association. The decision taken by the arbitrator is based on the written evidence of the parties. The decision arrived at by the arbitrator has to be treated as being confidential and this process requires the payment of a registration fee. A few contracts in respect of services and delivery notes usually incorporate an arbitration clause requiring any disagreement to be subjected to arbitration. Despite being binding, if the total cost falls short of £5,000, arbitration cannot be imposed unless consent was accorded subsequent to the commencement of the dispute9. In mediation, the mediator acts as middle – man, in order to bring about an agreement to which both parties are in concurrence. The parties to the dispute have to furnish dispute particulars and then submit a signed mediation agreement. The mediator’s duty is to bring about the meeting of the parties and to identify the strengths and weaknesses in the position of the parties. After this, the parties have to formulate the settlement terms and conditions. These terms are legally binding unless a statement has been submitted that the court will be approached only to get the award implemented. This is a comparatively costlier method of resolution; however, it might be possible to obtain financial assistance from the Community Legal Service or the legal representation scheme10. Legislation as well as court procedures have accorded greater recognition to the alternate dispute resolution procedures, thereby indicating its importance. The commercial court declared in 1993 that it was desirous of encouraging the alternate dispute resolution process. Moreover, it had implemented this mechanism in 1996 and this permitted the judges to determine right in the beginning as to whether a case was appropriate for being referred to the alternate dispute resolution. Further, this procedure permits dispute resolution outside the court11. In the Court of Appeal, while dealing with cases, the master of the rolls queries the parties to a dispute as to why they do not refer their dispute to the alternate dispute resolution. Moreover, the courts are required to encourage the parties to utilize the alternate dispute resolution mechanism. The Civil Procedure Rules state allows the courts to discontinue proceedings of cases, where the judges opine that the alternate dispute resolution process would be more appropriate for this purpose12. A party that insists on a court hearing, even if the alternate dispute resolution process is better suited to that case, can be penalized by the court13. Its importance can be gauged from the decision in Kinstreet Ltd v. Belmargo Corp Ltd14, the court directed the case to alternate dispute resolution and asked the parties to represent their grievances to the independent mediator and report the result of such representation to the court. In case of failure to resolve the dispute, the parties had to inform the same to the court15. In Dunnett v Railtrack plc, the Court of Appeal told the parties that they should resolve their dispute by taking recourse to the alternate dispute resolution. Railtrack was not amenable to this suggestion and although, it won the appeal, costs were not recovered from Dunnett who had been willing to resort to alternate dispute resolution16. In Steel v. Joy and Halliday, the Court stated that disputing parties had to be directed to contemplate mediation as the first choice to resolve their disputes17. In cases of arbitration, the parties to the dispute, approach an arbitrator for resolving their problem instead of proceeding in a court of law. The arbitration procedure is described in the Arbitration Act 1996. The awards granted by the arbitrator can be implemented in the courts and have to be followed in a legal manner. Such awards are however subject to judicial review18. In conciliation cases dealing with consumer disputes, the decision is not obligatory and court action can be taken in respect of the decision. The alternate dispute resolution procedure has many advantages that render it preferable to court procedure. Its main objective is to bring about an agreement between the parties without creating animosity. Further, it safeguards the privacy of the parties and being informal is much simpler than a court process. This process is faster and involves evidence rules that are less strict than a court procedure. In addition, the mediator is usually an expert in the concerned field and the cost involved is much lower. Moreover, domestic disputes are better dealt with by this process because of the unwanted publicity and formality of a court procedure. Furthermore, the court process is overbearing and on several occasions has caused psychological problems to the parties involved. It can be concluded that alternate dispute resolution offers a very important alternative to the extant court procedure and the majority of the civil cases are better dealt with by this procedure rather than by the courts. References 1. Alternative Dispute Resolution, n.d. retrieved February 21, 2007 from http://www.dca.gov.uk/civil/adr/index.htm 2. Cowl & Others v Plymouth City Council. (2001). EWCA Civ 1935X. 3. Disability Discrimination Act 1995. © Crown Copyright 1995. 4. Dunnet v. Railtrack plc. (2002) CA. 5. http://www.acas.org.uk/index.aspx?articleid=301 6. Kinstreet Ltd v. Belmargo Corp Ltd CH 1994 G 2999 etc. 7. Marcus Stone, July 2000. Representing clients in mediation. The Journal, p. 34. Retrieved February 21, 2007 from http://www.journalonline.co.uk/article/1000905.aspx. 8. Rule 26.4 of The Civil Procedure Rules (CPR) 1998. 9. Rule 45.5 of The Civil Procedure Rules (CPR) 1998. 10. Slapper, Gary and Kelly, David. 2004. The English Legal System 7/E. Routledge Cavendish. ISBN: 1859419453. P. 344 Slapper, Gary and Kelly, David. 2004. The English Legal System 7/E. Routledge Cavendish. ISBN: 1859419453. P. 344. 11. Steel v. Joy and Halliday (2004) EWCA Civ 576. 12. Types of ADR. July 1, 2006. Advice Guide. Citizens advice bureau. Retrieved from http://www.adviceguide.org.uk/nm/c_alternative_dispute_resolution.pdf Read More