Alternative Dispute Resolution (ADR) typically refers to any means by which a dispute may be settled outside of the courtroom; it can include mediation, arbitration and conciliation among other approaches. In recent years, the amount of litigants choosing to pursue this route has been climbing higher and higher, but why? It may seem easy to dismiss this upward trend as resulting from enhanced court fees (touched upon here earlier this month) and thrifty times; however, this would be to do disservice to the host of other socioeconomic factors at work in modern Britain.
Let’s begin with something we’re all familiar with in some form or another – “social media”. Its reach is far-stretching, its influence undeniable and its presence ubiquitous with the dawn of an interconnected array of devices propping up our daily lives. Post globalisation, information can travel instantaneously and gain notoriety in the public domain within hours of its release. Hence, commercial litigants stand to better preserve their reputation by settling amicably, avoiding costly and uncertain outcomes in Court that may well generate unwanted publicity.
Globalisation by its nature has also warranted an increase in world trade and resultantly, cross-border disputes. In these cases, disputes can arise over where a case is to be heard before the litigation process even begins in earnest, proving a drain on money and time. ADR allows parties a greater degree of control over the pace, locale and resolution of their disputes. Clauses are now more commonly written into contracts with ADR in mind – further propagating the practise.
In the case of commercial parties, as well as cost-effectiveness, time and reputational benefits, ADR and in particular, mediation, may be attractive for the possibility of securing outcomes that are simply not possible in Court. A mediated settlement for example may include commitments toward modifying the terms upon which business is conducted, a structured payment plan or buying back a disputed asset.
Client demand as a result of reasons above appears as the clear driving force behind the rise of ADR then, though various legislative developments have also played their part. The EU Mediation Directive and Mediation Ordinance in Hong Kong are two such developments, with the latter set of regulatory guidelines imposing sanctions in the event of parties being unreasonably unwilling to engage in mediation.
So, Alternative Dispute Resolution seems like the panacea, poised to enact a utilitarian cull of litigation as we know it. Not necessarily. With courts themselves pushing more parties toward ADR, time is being freed to enable courts to deal with cases more expeditiously; commercial courts in particular have a steadfast reputation for cost management and predictability; and of course, ADR can result in full-scale litigation regardless – if parties cannot reach agreement. For now, it seems a well-meaning and fruitful endeavour that works well in tandem with established Court systems.