Resolution revolution

The earlier articles in this series on Alternative Dispute Resolution (ADR) described the three more popular procedures; mediation, arbitration and adjudication. However, these primary forms have spawned a whole host of methods.

They provide processes to fit all needs, and this series would be lacking without them. It is worth restating that negotiation is the best and cheapest way to resolve disputes.

Mediation-based processes

Evaluative mediation

This differs to the more popular form, facilitative mediation, as the mediator influences the final outcome by making the parties aware of their individual rights (contractual and legal) and the strengths and weaknesses of their cases. He will advise as to the possible outcome if a third party was to make a judgement. This method depends on the rights of the parties rather than making them aware of their needs and interests in order to reach an agreement.

Settlement mediation

This method allows the mediator to encourage parties to move step-by-step from their opening positions, making minor agreements as they move towards their ‘bottom line’ and a compromise agreement.

Perhaps the most recent derivative of mediation is the transformative form, whereby the parties drive both the structure of the mediation and the negotiated outcome.

Conciliation

In conciliation, the parties may select a pre-determined duration for the process and thereby also establish the cost. They agree on the choice of conciliator and, if agreement is not reached during the procedure, the conciliator will make a recommendation. The parties may agree to be bound by this.

Mediation & Arbitration-based processes

Med-arb

This process starts as mediation but, if the parties fail to agree, the mediator becomes an arbitrator and enforces a binding decision.

Med-arb fuels fierce debate. Detractors are usually concerned that parties will not have the confidence to divulge all relevant information to the mediator, as this may influence his decision if he becomes the arbitrator. However, supporters point out that it offers the possibility of a mediated settlement and the assurance of an arbitrator’s decision.

Adjudication/Arbitration-based processes

Early neutral evaluation

In early neutral evaluation, an evaluator will make an assessment of the facts and evidence, taking into account the legal merits of each party’s case. The conclusions reached by the evaluator may be sufficient for the parties to settle, avoiding further action, or the conclusions may form the basis for further negotiation.

The evaluator is appointed on the agreement of the parties; an independent with appropriate knowledge. Matters upon which an opinion is sought must be clearly defined to ensure a relevant evaluation.

Expert determination

This method also requires the election of an independent third party who acts as an expert as opposed to an adjudicator/ arbitrator. The disputes referred are those requiring the knowledge of an expert and will generally be of a technical or valuation nature. The expert’s determination is final and binding on the parties.

100-day arbitration

This is a speedy procedure when compared to general arbitration. Agreement to use the procedure is between the parties and the arbitrator. Statements of defence and counter-claim are delivered to the arbitrator prior to the commencement of the 100-day period. The arbitrator’s decision is binding.

Executive tribunal

This process is used when parties have legal representatives and are on a course to litigation but pause to attempt a settlement. The lawyers present their cases given a limited time frame. The executives of each company are present and must have the authority to settle. After the hearing, a meeting is held between the executives with a neutral present who assists them in negotiating a settlement and is granted the authority to give a binding or non-binding opinion.

Dispute resolution boards

The procedure is normally a contractual requirement and is organised before construction begins. The employer will select one suitably qualified neutral member for the main contractor’s approval. In turn, the contractor will select a member for the employer’s approval. When the two are elected they will select the third member for approval by both employer and contractor.

Regular site visits by the board ensure they are familiar with the project and parties.

Disputes may be referred by either party and are dealt with promptly. The concept is to solve problems before they lead to major disputes.

This procedure has been used widely in the USA and is envisaged to become popular on major contracts in the UK.