What you need to know about alternative dispute resolution and how it works

What Is Alternative Dispute Resolution and Does it Work?

Franklin James are proudly qualified and certified commercial mediators. We offer an alternative dispute resolution method to clients to keep disputes out of the small claims court. Thus saving you time and money.

But what is alternative dispute resolution and is it worth your time?

With the new pre-action protocol for debt collection, mediation is looking better than ever. The new protocol is a lengthy and potentially expensive process used as a deterrent to court action. So this is where ADR could really help you out.

What is alternative dispute resolution or ADR?

Alternative dispute resolution is a more passive and friendly form of resolution. It generally aims to resolve or settle a dispute by verbal discussion so that it doesn’t have to go to court. Often, the small claims court gets clogged up with disputes that could easily have been resolved through alternative dispute resolution in less time and for less money; freeing up the court for claims that cannot be solved without legal action.

What are the different forms of alternative dispute resolution?

Some methods of alternative dispute resolution include;

Mediation (family, divorce, civil, commercial) – known as a ‘friendly interference’, mediation is the act of bringing in a third party between two people disputing in order to help negotiate and come to some sort of settlement.
Conciliation – Similar to mediation in that a third part is brought in to resolve the dispute. However the conciliator will not get the parties to come to a binding decision, whereas mediators will often ask for this decision.

Arbitration – the most similar to court of the three, an arbitrator makes a binding decision. Often used if mediation or conciliation has not worked and both parties agree they need someone else to come in and make a final decision for them.

Pros of mediation:

  • The sessions are private. They cannot be used in court as public record.
  • Less time-consuming and less expensive than litigation.
  • If you do decide to go to court, you will have had a chance to talk out and strengthen your case by testing your theories.
  • There isn’t the restriction of civil rules so both parties can discuss their side freely.
  • Non-confrontational setting for opponents to discuss.
  • Typically voluntary.
  • Both opponents actively participate in a resolution effort.
  • Both have to agree to any settlement, so both parties stay in control.
  • If you agree to mediation, you are showing willingness to resolve the dispute.
  • The opponents have the final say, not the mediator.
  • Both parties may walk away if they cannot reach a settlement.
  • Preserves relationships rather than destroys or leave on bad terms.
  • More creative forms of resolution available than in litigation.
  • You don’t need a lawyer.
  • You can find a specialist mediator who is skilled in the matter of the dispute.

Cons of Mediation:

  • Both parties have to agree to mediate.
  • You have to both be willing to cooperate and resolve.
  • At least one party or both parties has to be willing to compromise.
  • You have to both agree to a resolution.
  • Mediators generally cannot give you legal advice, but you can have a lawyer present with you.

“Mediation is a very effective and accessible method of resolving a dispute and reaching terms of settlement, rather than going all the way to trial. There is no guarantee a claim will settle at mediation but a large number do.”

How Much Does Mediation Cost?

According to “The National Audit Office Report …’the average cost of legal aid in non-mediated cases is estimated at £1,682, compared with £752 for mediated cases, representing an additional annual cost to the taxpayer of some £74 million’.”

“In 2012, the average cost per client for mediation was £675 compared to £2,823 for cases going to court.  This in an average cost saving of £2,148.”

“The report goes on that state that mediated cases are quicker to resolve, taking on average 110 days, compared with 435 days for non-mediated cases. Therefore the average time saving is 325 days (10.5 months).”

The guardian says that on average mediation is 110 days quicker than litigation.
It also says that the average cost of mediation, according to The Ministry of Justice, is only £535 compared to the potential cost of £7,000 in litigation.

Mediators must be doing something right…
Government funding for mediation has increased by £10m this year, bringing the over-all budget to approx. £25 million in full.

So before you take your case straight to the small claims court, consider how alternative dispute resolution might benefit you!

For more information on mediation, contact us here