Are there benefits to Alternative Dispute Resolution?

Written within the lecture notes of a nineteenth century lawyer named Abraham Lincoln are the words “Discourage litigation. Persuade your neighbors to compromise whenever they can.”

One hundred and sixty years on the courts of England and Wales have the same attitude toward settling disputes. Rather than resorting automatically to traditional, expensive, time-consuming and acrimonious litigation, parties must show that they have, from the outset, been open to compromise and made genuine attempts to settle their differences. Essential to this is showing that you have seriously considered alternatives to litigation, such as mediation, negotiation and arbitration.

The support for Alternative Dispute Resolution (ADR) is recognition of its many benefits. For example, mediation, the most popular form of ADR, has an aggregate settlement rate of around 90% on or shortly after a day of participating in it. Its use therefore alleviates the pressure on an already inundated court system by keeping cases out of court.

More importantly for the parties though, mediation is faster, cheaper and more flexible than litigation and affords a chance to express your grievances and concerns whilst retaining control of the outcome – something you lose if the matter goes to trial. In addition to this the skills of the mediator in clarifying and narrowing down the salient issues provides a greater opportunity to preserve your relationship with the other party; a considerable advantage for commercial clients.

Yet despite these benefits, parties have been reluctant to try it. Pilot programmes reveal that approximately 80% of parties automatically referred for mediation objected to participating in it and 8,000 mediation cases were reported in 2012 compared with 300,000 County Courts claims issued between just October and December 2012. The status quo draws a comparison to choosing between competing stain remover brands. One is quicker, cheaper and easier to use than the latter and is less likely to leave a lasting stain, yet somehow it is significantly less popular with customers.

The reluctance is likely due to a combination of factors: a lack of awareness and understanding of ADR; the successful history which precedes the court system and its constant coverage in the media; a concern that willingness to compromise shows weakness; and an instilled desire for ‘justice’ and association of ‘justice’ with ‘judges’. Add to this the deeper, intrinsic desire to win, to achieve vindication and a humiliation of the other side. Litigation, supposedly, offers an outright victory.

So, whilst it is for the court to eradicate the scepticism surrounding ADR and to relay the stress, anxiety, effort and economic risks inherent in litigation (not so much an ‘outright victory’), the parties too must open their minds to alternatives and seek to compromise from the start. Whilst, for now, ADR remains optional, by threatening financial penalties for unreasonably refusing ADR, the court will in the meantime enforce the issue by helping parties to help themselves.

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