Department of Real Estate and Construction

University of Hong Kong

MSc CPM/RE

ALTERNATIVE DLSPUTE RESOLUTION PROCESSES

Sources and Goals of the Alternative Dispute Resolution Movement

• Originate in the sixties in America

§ Deals with alternative ways to resolve disputes other than by litigation
§ Examples are arbitration - primarily used for settling commercial disputes; mediation
- common in religious communities
§ In the 60s, there was an expansion in the number of lawsuits in America, probably
due to the increased vigilance of people's mind in their rights and advancement of
technology, both of which have led to more causes of action. A large number of
legislations have also been enacted to cope with these changes.
§ Judicial congestion has resulted in people's looking for alternatives from the
courtroom
§ There emerged different sources to support such interests. Examples were:
Community Relations Service to aid in the settlement of racial and community
disputes, set up by the American Congress; the Institute of Mediation and Conflict
§ Resolution to apply techniques in settling labour disputes to other kinds of conflicts
and the Law Enforcement Assistance Administration to develop and test
alternatives.
§ The legal profession also showed their interest and finally the National Institute fo:
§ Dispute Resolution was created to promote work on alternatives.
§ However, there were different goals from the supporters for ADR.s, namely,
relieving court congestion, undue costs and delay; enhancing community
involvement in dispute resolution process; facilitating access to justice and
providing more "effective" dispute resolution - some overlapping and conflicting
goals!

I. Relieving Court Congestion, Undue Costs and Delay

• Doubtful that a pervasive use of alternatives can hope to solve the court congestion
crises
• Only a small amount of disputes result in court filings and only a small amount
of such filings result in significant amounts of judicial costs

II. Enhancing Community Involvement in Dispute Resolution Process

§ The community orientated goal is also doubtful because of the highly mobile
American society
§ The question can be boiled down to the costs of access to dispute
resolution mechanisms

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III. Facilitating Access to Justice

§ Mere provision of ADR mechanisms other than the courts is not sufficient
Consider cases where the sort of disputes may only be resolved effectively by
judicial process instead of other alternatives
§ The goal should therefore be assuring access to an effective dispute resolution
mechanism

IV. Providing more "Effective" Dispute Resolution

§ It is important to note what process or combination of processes is effective for

resolving different types of disputes
§ Effective dispute resolution mechanism is one that is inexpensive, speedy, leads
co final solution of the dispute, procedurally fair, leading to optimal solutions
and satisfying to the parties

Description, Taxonomy and Applications of Alternative Dispute Resolution

Processes

I. Description

§ There are commonly two major forms:

a. Processes without involving a third party

§ The most common form of dispute resolution without involving a third party is
by bargaining and negotiation
§ The advantage of this is that the parties are allowed to control the process and
the solution

b. Processes involving a third party

• In cases involving a third party, the third party may have power to impose a
solution or simply to assist the parties to arrive at their own solution
• The former one is called adjudication (note the difference from the kind of
adjudication process adopted in the construction industry), whether performed by
a court or by a private adjudicator known as an arbitrator, while the latter is
referred to as mediation
• The elements of these three forms of primary processes can be combined in a
variety of ways and a rich variety of hybrid dispute resolution processes can
be achieved,
e.g. mini-trial - an adjudication like presentation of proofs and arguments combined
with negotiation; or mediation combined with arbitration to form med-arb
II. Taxonomy

Considerations in determining which process is most effective for a particular dispute:

a. The relationship between the disputants

• This is particularly important where there is an on-going relationship between the

parties and they are allowed to work out their own solution

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 • In this regard mediation may encourage a restructuring of the underlying
relationship so as to eliminate or mitigate the source of conflict

b. The nature of the dispute

• An adjudicatory approach is not suited to "polycentric" problems, e.g. two museum

received a collection of paintings in equal shares without a directions for
apportionment
• It is also important to distinguish between novel disputes requiring a definitive
precedent an recurring application of the same issue, the former may need a court
decision while the latter can be handled by less sophisticated adjudication process such
as arbitration

c. The amount at stake

• This is generally thought to be an important factor in determining the

appropriateness of a particular dispute resolution procedure
• But note that a small case, in terms of the amount in dispute, may be complex
while a large one may be simple
• Another approach is to assess the novelty or complexity of the issued presented

d. Speed and cost

• arbitration under simple rules adopted by the parties may be speedier and
less expensive than full court adjudication
• cost is an important factor particularly where public funds are involved

e. Power relationship between the parties

• An adjudication process where principle rather than power will determine the
outcome is preferable where one party has significantly less bargaining strength
than his opponent
• There may however be difficulties in bringing the more powerful side to the
adjudication table

III. Applications

• Both primary and hybrid processes have been used in many contexts
• Arbitration has long been used in commercial and labour matters, consumer
disputes, medical malpractice claims in America while in Hong Kong it is widely
used in commercial, construction and shipping disputes
• Mediation has been used in resolving employer-trade union disputes and
disputes among people with on-going relationship. In Hong Kong the Hong Kong
Government General Conditions of Contract has adopted this method and
mediation has been used in almost all kinds of disputes which are civil in
nature
• Med-arb is a process whereby issues unresolved by mediation are submitted to
arbitration typically with the same person serving first as mediator and then as
arbitrator. It is common in America to resolve contract negotiation disputes between
public employers and their unionized employees

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 • In mini-trial lawyers for each party are given a brief period to present the essence of
their cases to senior executives of both parties. After the presentation period the
executives try to negotiate a settlement of the case, sometimes assisted by a neutral
advisor who has also heard the presentation. Mini-trial has been utilized in a number
of major inter-corporate disputes in America
• Rent-a-judge process allows the parties to select a retired judge to hear and decide a
pending cases as an arbitrator would. However, the trial process is generally the same
as that in the court room and in some states in America the decisions are entered as
judgment of the courts

Cautions and Concerns

Perhaps one should go through the following questions:

1. Why are the alternatives not so widely used if they have all the advantages as
claimed?
2. Is there an adequate empirical basis to justify the claimed advantages of
the alternatives?
3. Should the alternatives by used as pre-requisite before the issues are brought before
the court if they have the advantages as claimed?
4. Is it possible to develop a satisfactory taxonomy of dispute resolution processes
which can match disputes to appropriate processes?
5. In adopting the most appropriate alternative, would one lose sight of the fairness
of the outcome?
6. \\'ill the alternatives generate a second- class justice in which semi-
coerced compromise settlements are imposed onto disputants?
7. Will mediation, which emphasizes on compromise and settlement, only serve
the powerful against the disadvantaged?
8. How skills of practitioners can be assured in the changing mode of
dispute resolutions?
9. Can the alternatives movement survives success, in terms of costs and delay, if they
are well developed?
10. I it possible for the alternatives to survive if free services are provided by the
courts [Link] America?
11. Can the mechanism of Dispute Resolution Advisor adopted by the
Architectural Services Department in Hong Kong be a good alternative?

Recommended reading

1. Goldberg, Green & Sander, Dispute Resolution, Little Brown & Co., 1984
2. [Link] - for more information about arbitration and mediation