When it comes to commercial disputes, dispute resolution is rarely easy. While the Australian court system operates at a sophisticated level, this sophistication comes at a cost.
The process is hardly ever cheap, is often drawn-out and can be ill-suited to smaller disputes or disputes that might benefit from creative solutions.
Enter “alternative dispute resolution” or “ADR”. ADR refers to the various forms of dispute resolution that do not involve a determination by a court or tribunal.
What forms might ADR take?
Broadly, there are two types of ADR: those where an independent third person is required to “determine” the dispute and those where an independent third person acts as a “facilitator”.
Forms of ADR that involve a determination include arbitration and expert determination. Forms of ADR that are facilitative include mediation, conciliation and facilitated negotiation.
The most common form of ADR practised in Australia is mediation. While a forum for negotiation, mediations typically follow a standard format conducted by the mediator.
What are the advantages of ADR?
Determinative ADR has two potential advantages:
- The process can be private and the outcome confidential; and
- For very technical disputes, the independent third party can be selected based upon their specialist technical knowledge.
Facilitative ADR has potential further advantages:
- A wide range of solutions can be considered – the parties are not constrained by the remedies available to a court or tribunal;
- The independent third person can play a role in identifying points of impasse and helping the parties to overcome them;
- A negotiated settlement gives the parties certainty of outcome, as opposed to the uncertainty of having the dispute determined by a court or tribunal;
- The process has greater potential to preserve or rebuild relationships, which is often not the case following determinative processes; and
- Where a settlement is reached, the parties can avoid (or stem) the often-significant costs of the court process.
Is ADR right for my dispute?
ADR should at the very least be considered for all disputes, irrespective of apparent size or complexity. This is evident as legislation and/or rules of court in many jurisdictions empower judicial officers to refer matters to mediation in appropriate circumstances.
Whether ADR is right for any particular dispute depends on the nature of the dispute. For example, a plaintiff in a strong position may have little (if any) appetite to compromise its rights, in which case ADR may be of no interest. However, a defendant, or a plaintiff that recognises that its case is not “clear-cut” may see ADR as a viable or even preferable path.
Do I need a solicitor?
Strictly speaking, parties do not need a solicitor to initiate and/or participate in ADR. However, in most circumstances, the guidance of a solicitor (especially as to the most appropriate form of ADR and the legal merits) will improve the prospects of success.
It is also important to bear in mind that strategy and tactics are just as critical to ADR processes as they are to court and tribunal proceedings. This is an area in which experienced solicitors tend to excel.
While effective use of ADR processes requires considerable strategy and tactical acumen, there can be no doubt that they present a real opportunity to find fair solutions to legal disputes without going to court.
By Troy Gurnett, Partner, Liam Maguire, Senior Associate and Kimberley Cheng, Graduate, Commercial Dispute Resolution at Hicksons Lawyers
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