Today is an era where issues with the corporate climate that are critical and are changing so fast are inexplicit. It may consume hours or days the end of which could be disputes in several forms like violation of contract, intellectual property or business agreement, but the resolution of any type of conflicts being timely and respectful is needed for the continuation of business relationships. For long traditional litigation was a one and only option in dispute resolution, however, this form of conflict resolution frequently has a lot of negative sides such as constrained schedules, insignificant impact on affected parties and high costs as well as procedural measures that many people refer to as hostile. Thus, the increase in the number of companies has been related to alternative dispute processes, such as arbitration, mediation, and others as a substitute for dispute resolution. In this forum we will look into reasons for favoring “Alternative Dispute Resolution” in settlement of commercial disputes, advantages of ADR over traditional “Litigation procedures” and new “Trends” that have lately entered the conflict resolution business.
Alternative Dispute Resolution (ADR) – An Overview
By using the term Alternative Dispute Resolution (ADR) we mean an equally vast array of processes and methods that are specially designed and created for the settlement of disputes outside litigation. The imbedded historical roots ADR were shaped more towards the second half of the 20th century to cope with the inadequacy of traditional judicial proceedings. Dispute resolution the ADR way is either by way of arbitration or mediation. These two methods of settlement of disputes both have their distinct types and processes that is still subject to the given contract of parties.
Arbitration:
Arbitration is the course of action when the parties of conflict present their dispute to one or more impartial third-party arbitrators after having their arguments and evidence heard by the arbitrators who make a final decision that becomes legally binding. As opposed to litigation, those arbitral proceedings are conducted in private, flexible and less formal way, which gives the parties the ability to alter the process as it relates to each specific dispute. The arbitrators can have expertise in particular industry or legal field which brings relevant understanding to the process, thereby assessing all aspects of the dispute and providing a clear direction. Arbitration is disputes system, refereed by an impartial person as an alternative for those cases which need a final resolution.
Mediation:
While mediation is a non-binding and private procedure in which a neutral mediator guides the parties as they reach an agreement by facilitating open dialogue, identification of interests, and creation of new alternatives, the arbitration employs the set rules and agreements by the neutral arbitrators. The mediator is not the one who’s going to decide an outcome, rather she is the one who suggests to the parties the way to communicate and helps resolve the case in a collaborative way. Mediation has proved to be very efficient in this respect as it helps in sustaining relationship and nurturing constructive conversation, so it can only be crucial instrument in the resolution of ongoing business conflicts or situations in which keeping goodwill is crucial.
Advantages of ADR Over Traditional Litigation:
Various advantages can be mentioned, for the expanding role of ADR in commercial – related disputes. On the one hand, litigation being a very expensive process, ADR institutionalize especially mediation methods, which are cheaper replacing these sparser legal proceedings. This cost effectiveness is mainly obvious for the small and the medium enterprises which could encounter financial difficulties while trying to fight for their rights in a legal battle.
Settling disputes rapidly using ADR brings along the benefit of reducing business disruptions and allows them to concentrate on what really gives value to the company itself, that is the main business they do. In a corporate society that is so time-sensitive now, a competent delay in dispute resolution is having negative impacts, including such as lost opportunities, strained relationships, and productivity reduction. The offline dispute settlement process, on the contrary, takes a long period of time and increases the risks of delays which results in delays in company operations. On the other side, ADR ensures that companies can act promptly avoiding unforeseen delays in their operations.
Additionally, parties involved in ADR benefit from flexibility and informality which provide them the opportunity to choose arbitrators/mediators of their preference, select method of settling dispute, and fix appropriate schedule that fits into their lives/business calendar. This flexibility allows to adapt tactics of the negotiation process that involve unique features of the situation and issues which are peculiar to each dispute, therefore the settlement procedure can be fast and fruitful. Beside political groups span legislators can elect neutrals with specialized subject matter expertise to facilitate and resolve disputes.
Privacy rights and trade secret protection, which constitutes a core of the ADR processes, has gained a foothold for further communication between parties. In an operating field which (where) companies are obliged to distinguish themselves; preservation of secrets for safeguarding of confidential information, and the image or the edge, becomes essential over the competitors. ADR is a private setting that allows parties to deal with the issues without the worry of a negative publicity.
Moreover, ADR should be used in cases where the essence of the conflict involves the issues of relations between parties which are stretched further than just commercial affairs or partnership. ADR plays a crucial role not only in resolving the ongoing conflicts but also in developing a mutual trust and goodwill even between the opposing parties through communications, understanding, and respect for the different views. More importantly, it will be the foundation upon which future collaboration and achievement will be facilitated. Nevertheless, it contrasts with the classic ‘adversarial’ nature of legal disputes which are likely to intensify competitive strains as well ultimately result to lasting bad ties.
Recent Trends and Developments
Dispute Resolution that used to be based on arbitration and mediation has now been exposed to the constant adaptation and evolution of business as well. In several regions, courts in turn have taken this as an opportunity to set up court-linked mediation programs that guide people from legal procedures to mediation. This way, courts curb the problem of court cases not being completed and provide access to justice. As for the most part, the mediation or the conferences of settlement are comprised of the program. They highlight the key role ADR has on dispute management and what advantage the use of ADR may serve in achieving a long-term relationship between the parties.
A parallel phase with technological development was the evolution of Online Dispute Resolution (ODR) systems, allowing parties to conclude disputes without requiring the physical presence of both parties due to clever online applications and channels of communication ODR adds to the customers experience which is not only convenience and accessibility but also savings of expenses, a value added that is a good alternative for the traditional customers.
Conclusion
Alternative Dispute Resolution (ADR)has really become an essential and integral part of modern conflict resolution in that it has many advantages over the traditional litigation. Via such means as arbitration, mediation and other ADR procedures, the parties can find a fast, inexpensive and practical method of conflict resolution through which they can also maintain their business relationships and interests. Moreover, ADR attracts more and more business due to its various benefits thereby the field experience continuous improvements as new trends and invention initiatives are implemented in order to ensure that the conflicts are resolved in a more diverse and effective way outside the courtroom. Incorporating ADR positively shines on a win-win outcome of effective dispute resolution and build a culture of collaboration, mutual comprehension and lasting business initiatives.
Author : PARTH GAWDE, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD
