English Legal

System & Method II

Spring 2023/24
BAU
NTK
Alternative  There is no one accepted definition of ADR. To some, particularly
in the US, the term includes all dispute resolution methods other
dispute than court proceedings (and therefore includes arbitration). In
the UK, ADR is generally understood to describe all dispute
resolution resolution methods other than court proceedings and arbitration,
or just non-adjudicative dispute resolution methods such as
(ADR) mediation, executive tribunal (in essence a more formal type of
mediation, known in the US as "mini-trial") and
early neutral evaluation, for example.
 Alternative Dispute Resolution (ADR) refers to
methods of resolving disputes outside of traditional
court litigation. ADR processes are designed to be
less adversarial, more flexible, and more cost-
effective than going to court.
 Literally alternative ways of solving legal disputes.
 When we look at the advantages that ADR methods have over Courts we
will see that ADR methods can be preferred by many instead of taking a
case to court – ADR methods are generally cheaper (because like we have
seen it costs a lot of money to pay for a lawyer and to take a case to court –
and if you lose you may have to pay the other party’s costs), takes less time
and less complex and more private than taking a case to court. Also going
to court may create difficulties and ill feelings between the parties.
 Throughout the 1990s there were moves to encourage the use of
Alternative Dispute Resolution methods. Especially the Woolf Reports and
in the Civil Procedure Rules of 1999 they created a procedure of “stay”
where the court proceedings can be paused and instead the parties can try
one of the forms of ADR.
 So the view is that a court case should be the last resort.
 Negotiation
 Negotiation is often the first option for those wishing to resolve a dispute. In
some cases, disputes can be solved by both parties taking a ‘cards on the
table’ approach and attempting to negotiate a compromise. If required,
dispute resolution specialists are able to take instructions and negotiate on
behalf of the parties.

 Mediation
 Mediation involves an independent trained mediator who facilitates
communication between the two parties having the dispute, with the aim of
achieving a settlement or resolution. The mediator will discuss the issues
and try to help the parties reach an agreement, but will generally not offer
their own opinions or assessment.

 Conciliation
 Conciliation is generally used for employment situations rather than
commercial disputes. Conciliation is a compulsory process before an
individual wishes to bring a claim to the Employment Tribunal. The
conciliator will discuss the issues and try to help the parties reach an
agreement, often providing their own opinion after assessing the situation
and the different arguments. Their opinion may help to form a settlement or
achieve a conclusion to the dispute.
 Arbitration
 This is more formal than mediation, and involves a process in which
the dispute is resolved by the decision of an arbitrator. The
arbitration process can be particularly useful in disputes which
require an understanding of technical knowledge and where privacy
is important (e.g. to avoid disclosure of commercially sensitive
information) or if there is an international element (i.e. to avoid
multiple legal jurisdictions). It runs as a tribunal process and
decisions are binding. Many contracts will contain an arbitration
clause, which requires arbitration to be used in the case of a
dispute.

 Adjudication
 This form of ADR is generally reserved for disputes which arise out
of construction contracts. It is a relatively formal process which
involves: providing a written Notice of Adjudication which sets out
the brief details of the dispute; appointment of an agreed
adjudicator; serving a referral notice which sets out the dispute in
detail by the aggrieved party; a response to this referral notice
(essentially the defence); and finally a decision being reached by
the adjudicator within 28 days of the referral notice. This decision is
final and binding.
 Expert Determination
 This is another fast method of resolving disputes. An expert is chosen to
determine the outcome of a dispute and makes a binding determination. A
common area where expert determination is used is in corporate
transactions, mergers and acquisitions. An example would be to have an
expert determination clause added into a contract for completion account
disputes. Thus it is pre-agreed to in the contract as a method of dispute
resolution. There might be a dispute as to how much a company is worth as
it may have increased or decreased in value since the time the agreement
was made. An expert accountant might then be appointed to determine
how much the company was worth on a particular date.

 Early Neutral Evaluation

 Similar to expert determination, early neutral evaluation can be used to
give expert opinion on the likely outcome of a dispute. It is not binding but
gives a good indication on the likely outcome were it to go to court. A
barrister or retired judge would be asked to give their initial thoughts and
can help you to come to an agreement quickly due to their neutral, but
non-binding evaluation.

 ADR offers a way for disputes to be resolved with the help of a third party
without the need for costly litigation, but it may not be suitable for all
disputes. It is therefore important to consider the specific circumstances
when choosing the appropriate method for resolving disputes.
 1. Mediation
 Under this form of ADR, there are the two people who are having a dispute and there is also a neutral third party
called the mediator. The mediator is there to help the parties to reach a solution that both parties are happy with.
THE PARTIES AGREE TO RESOLVE THE DISPUTE THEMSELVES AND THE MEDIATOR IS THERE TO
HELP THEM FACILITATE SUCH A RESOLUTION AND AGREEMENT.
 There are no fixed rules about the procedure – but generally what happens is…
 The parties will present to each other an outline of their case in the presence of the mediator. The mediator will
set out the procedure, will try to keep things simple and try to identify the main points in dispute. Then the two
parties will go to different rooms and the mediator will consult with each person – he will hear one party’s story
and pass on their position to the other party in the other room. A large number of visits may be necessary for them
to come to an agreement and then finally come to a settlement.
 They act as a FACILITATOR – allowing the two parties to communicate and do not make suggestions and the
SOLUTION IS REACHED BY THE TWO PARTIES. This can be very helpful especially when we are dealing
with a problem that makes both parties upset or angry. When we are upset and angry we will not listen to what the
other person has to say. We will not want to communicate with them and won’t want to hear their side of the
story. It makes solution making kind of impossible – so this is where the mediator comes in, helping the two
parties to COMMUNICATE. Will hear one person’s side of the story, tell the other person and visa versa.
 The parties are the ones in control – they are the ones that make the decision.

 Who can the mediator be? It can be a lawyer – and there are written rules to help lawyers in these situations for
example what procedure to follow, how to stay neutral etc. in the CODE OF CONDUCT.
 Alternatively there are schemes that can provide mediators - persons who are trained to be mediators and help
resolve legal disputes.

 However, there is a disadvantage in that there is a possibility that the parties will not be able to solve their
problems; and so they may still have to try another alternative dispute method or may have to go to court.
1. Mediation
 Under this form of ADR, there are the two people who are having a dispute and there is also a neutral third party called the
mediator. The mediator is there to help the parties to reach a solution that both parties are happy with. THE PARTIES AGREE
TO RESOLVE THE DISPUTE THEMSELVES AND THE MEDIATOR IS THERE TO HELP THEM FACILITATE SUCH A
RESOLUTION AND AGREEMENT.
 There are no fixed rules about the procedure – but generally what happens is…

 The parties will present to each other an outline of their case in the presence of the mediator. The mediator will set out the
procedure, will try to keep things simple and try to identify the main points in dispute. Then the two parties will go to different
rooms and the mediator will consult with each person – he will hear one party’s story and pass on their position to the other
party in the other room. A large number of visits may be necessary for them to come to an agreement and then finally come to a
settlement.
 They act as a FACILITATOR – allowing the two parties to communicate and do not make suggestions and the SOLUTION IS
REACHED BY THE TWO PARTIES. This can be very helpful especially when we are dealing with a problem that makes both
parties upset or angry. When we are upset and angry we will not listen to what the other person has to say. We will not want to
communicate with them and won’t want to hear their side of the story. It makes solution making kind of impossible – so this is
where the mediator comes in, helping the two parties to COMMUNICATE. Will hear one person’s side of the story, tell the other
person and visa versa.
 The parties are the ones in control – they are the ones that make the decision.

 Who can the mediator be? It can be a lawyer – and there are written rules to help lawyers in these situations for example what
procedure to follow, how to stay neutral etc. in the CODE OF CONDUCT.
 Alternatively there are schemes that can provide mediators - persons who are trained to be mediators and help resolve legal
disputes.
 However, there is a disadvantage in that there is a possibility that the parties will not be able to solve their problems; and so they
may still have to try another alternative dispute method or may have to go to court.
 2. Conciliation

 This is similar to mediation in the fact that a neutral third party helps the
disputing parties to resolve their problem but the difference is that well first
of all the third party is called a conciliator(!) and that the conciliator takes
MORE OF AN ACTIVE ROLE THAN A MEDIATOR. He will make
suggestions on a possible solution for the party’s disputes.
 But the suggestions are not legally binding – the parties do not have to
follow the suggestions made by the Conciliator.

 Therefore, just like the disadvantage of mediation, the parties may not be
able to solve their problem through conciliation and so they may have to
try the third type of alternative dispute methods; or may have to go to court
if they can still not resolve their problem.
 3. Arbitration

 This is where the parties submit their case to an Arbitrator; without the need
for a court. But its quite similar to the courts in the fact that the Arbitrator will
hear each party’s case and make a decision that is legally binding.
 It is governed by the Arbitration Act of 1996.
 It says that
(a) “the object of arbitration is to obtain the fair resolution of disputes by an
impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject
only to such safeguards as are necessary in the public interest.”

 So arbitration is a voluntary submission by the parties; they must have an
agreement between them that they will submit their problem to arbitration.
 They can make this agreement at any time – it can be before the dispute arises
or when the dispute becomes apparent.
 Many such agreement are present in COMMERCIAL contracts; they have a special
clause/term in the contract which says that if they have a problem under the contract
that they will submit their problem to arbitration to be solved.
 Where there is an agreement then the court will refuse to deal with the dispute and
will say that the matter must be taken to arbitration – unless the claim is able to be
dealt with in the small claims track (less than 5000 pounds compensation claim).

 Section 15 of the Arbitration Act of 1996 says that the parties can agree HOW
MANY arbitrators will hear the dispute – can be sole (one) or a panel of 2 or 3. If
they cannot agree on how many then the Act says that there will be only one
arbitrator.

 If they have a prior agreement then they can name the person that they want to be an
arbitrator. Or they will set out an agreed method of choosing the arbitrator – who can
the arbitrator be? There is an Institute of Arbitrators which provide trained arbitrators
so they may choose one of these or they can choose someone who has expertise on
the subject matter of the dispute. If the dispute involves a point of law then the
parties will probably choose to appoint a lawyer.
 If there is no prior agreement or if the parties cannot come to a decision about who
will be the arbitrator then the court will appoint an arbitrator.
 The procedure?
 Under article 33(a) the arbitrator is required to act fairly and impartially between the parties, giving each of
the parties a reasonable opportunity of putting the case forward.
 Here, the parties have a choice. They can make a prior agreement as to the procedure of arbitration or can
agree when the dispute arises. There are two different types:
- paper arbitration where the parties put their points that they wish to raise in writing and submit this
together with any other relevant documents to the arbitrator. The arbitrator will then read the documents
and then make a decision.
- Alternatively they can send the documents beforehand and then attend before the arbitrator to give oral
submissions to support their cases. Where necessary they can call witnesses to give evidence – but where
they are called they are not bound to give an oath (do not have to swear to tell the truth) unless the parties
say that they want the witnesses to give their evidence under oath. If so, it will be a more formal process.
Especially if the parties decide to appoint lawyers to represent them – the lawyers will have to act as they
would do in the courts.

 So it is quite flexible in this sense – they can choose which process they prefer. Also another flexibility is
that the parties agree (with consultation with the arbitrator) on the date time and place of the arbitration –
arranging a time that is best for them.
 Like mentioned, the decision of the arbitrator is CALLED AN “AWARD” AND IS LEGALLY BINDING
AND CAN BE ENFORCED IN COURTS IF NECESSARY…
 The award is final; but can be challenged (appealed) to the courts for serious irregularity in the procedure
or on a point of law – s.68 of the Arbitration Act 1996.
 The arbitrators are paid by the parties – the usual rate if a lawyer is used and there will also be a rate for
professional arbitrators taken from an international arbitration provider.
 33 General duty of the tribunal.
 (1)The tribunal shall—
 (a)act fairly and impartially as between the parties, giving
each party a reasonable opportunity of putting his case and
dealing with that of his opponent, and
 (b)adopt procedures suitable to the circumstances of the
particular case, avoiding unnecessary delay or expense, so
as to provide a fair means for the resolution of the matters
falling to be determined.
 (2)The tribunal shall comply with that general duty in
conducting the arbitral proceedings, in its decisions on
matters of procedure and evidence and in the exercise of all
other powers conferred on it.
 Advantages of Arbitration
 The parties may choose their arbitrator who can be a professional arbitrator or a
technical expert or a lawyer - and they can arrange who will be the arbitrator
before the dispute or when the dispute comes up
 If the arbitrator is an expert then the parties will not have to pay for expert
witnesses – and costs can be saved
 The hearing time and place can be arranged
 The procedure is flexible – they can have a paper hearing or they can have oral
hearings and within this procedure we can decide for it to be informal or more
formal with witnesses making oaths
 The arbitration is PRIVATE – whereas if we go to court all records are open to
the public and you may not want your dirty laundry to be aired in public
 The dispute will be resolved more quickly than a court solution – and this is
mentioned consistently throughout the Arbitration Act of 1996, such as sections
33(b) which says that the arbitrator should use procedures suitable to the
circumstances of the particular case AVOIDING UNNECESSARY DELAY OR
EXPENSE; s. 44 all parties must do all things necessary for the proper and
EXPEDIOUS conduct of the arbitration procedure.
 Cheaper than going to court
 44 Court powers exercisable in support of arbitral proceedings.
 (1)Unless otherwise agreed by the parties, the court has for the purposes
of and in relation to arbitral proceedings the same power of making orders
about the matters listed below as it has for the purposes of and in relation
to legal proceedings.
 (2)Those matters are—
 (a)the taking of the evidence of witnesses;
 (b)the preservation of evidence;
 (c)making orders relating to property which is the subject of the
proceedings or as to which any question arises in the proceedings—
 (i)for the inspection, photographing, preservation, custody or detention of
the property, or
 (ii)ordering that samples be taken from, or any observation be made of or
experiment conducted upon, the property;
 and for that purpose authorising any person to enter any premises in the
possession or control of a party to the arbitration;
 (d)the sale of any goods the subject of the proceedings;
 (e)the granting of an interim injunction or the appointment of a receiver.
 (3)If the case is one of urgency, the court may, on the application of a
party or proposed party to the arbitral proceedings, make such
orders as it thinks necessary for the purpose of preserving evidence
or assets.
 (4)If the case is not one of urgency, the court shall act only on the
application of a party to the arbitral proceedings (upon notice to the
other parties and to the tribunal) made with the permission of the
tribunal or the agreement in writing of the other parties.
 (5)In any case the court shall act only if or to the extent that the
arbitral tribunal, and any arbitral or other institution or person vested
by the parties with power in that regard, has no power or is unable
for the time being to act effectively.
 (6)If the court so orders, an order made by it under this section shall
cease to have effect in whole or in part on the order of the tribunal or
of any such arbitral or other institution or person having power to act
in relation to the subject-matter of the order.
 (7)The leave of the court is required for any appeal from a decision of
the court under this section.
 Disadvantages
 Legal aid is not available for arbitration and this can be a problem when
we have two parties who have different footing – one party may have
more power than the other, more money to arrange better evidences etc.
for example when a person is against a business
 If the arbitrator is not a lawyer and a point of law comes up then the
arbitrator may not be suitable to make a decision
 If a professional arbitrator is used, it will be more expensive
 The rights of appeal are limited
 It can also be expensive if the parties want the oral hearing to be more
formal with witnesses coming in and giving evidence and with lawyers
representing the parties in the oral hearing
 If a professional arbitrator and lawyers are used and when talking about
commercial arbitration then the time that it takes to finalise the dispute
will be the same as the time span of a court case
Alternative Dispute Regulations 2015

 Two sets of regulations, in March and June 2015, have been laid in Parliament to
implement the European Directive on alternative dispute resolution (ADR) in the UK.
• The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities a
nd Information) Regulations 2015
• The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations
2015
 These regulations, bar the business information requirement, come into force on 9
July 2015. The business information requirement takes effect from 1 October 2015.
 The regulations:
• place an information requirement on businesses selling to consumers
• establish competent authorities to certify ADR schemes
• set the standards that ADR scheme applicants must meet in order to achieve
certification
In the regulated sectors, the regulators will act as the
competent authority. For example:

Ofgem
Financial Conduct Authority (FCA)
Civil Aviation Authority (CAA)

In all other areas the Secretary of State will be the generic

competent authority and has appointed the Chartered
Trading Standards Institute (CTSI) to carry out these
functions on his behalf.
The regulations do not make participation in ADR schemes
mandatory for traders. The regulations do require almost all
businesses which sell directly to consumers to point the
consumer to a certified ADR scheme – where they cannot
resolve a dispute in-house – and declare whether or not they
intend to use that scheme.
The regulations also require that ADR providers wishing to
gain certification must meet certain standards with regard
to independence, impartiality, and quality of expertise.
 The regulations also require that ADR providers wishing to
gain certification must meet certain standards with regard
to independence, impartiality, and quality of expertise.
• Guidance for ADR providers on how to become certified (C
TSI website)
 Separate guidance:
New Business in Focus guidance on alternative dispute res
olution (ADR)
is also available. Consumers can
contact the Citizens Advice Consumer Service.
 Online dispute resolution
 British consumers are increasingly active online, including
across national boundaries. The
European Regulation on Online Dispute Resolution will help
them and other consumers across Europe to get greater
access to redress, should something go wrong with goods
or services bought in other member states, without having
to resort to legal action.
 [Link]
L:2013:165:0001:0012:EN:PDF
 [Link]