Explainer: Alternative Dispute Resolutions

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If you have ever been involved in a legal dispute, you have probably heard the term alternative dispute resolution before.

Alternative dispute resolution or “ADR” as it is also known refers to mediums in which legal disputes can be resolved without a Court having to determine the matter.

Types of alternative dispute resolution include things like mediations, settlement conferences and conciliations, and involve the parties to the dispute trying to agree as to how the dispute should be resolved themselves.

Parties can engage in ADR prior to the commencement of legal proceedings or while proceedings are on foot, and in many jurisdictions Judges and other decision makers will require that parties engage in some form of alternative dispute resolution before they will proceed to hear the matter.

Quite often parties will be represented by Lawyers during the ADR process, and the most effective form of ADR are things like mediations where there is an independent third party (i.e. a Mediator) present whose job is to facilitate constructive conversation and help parties reach a compromise without taking one side or the other.

There are a number of benefits to alternative dispute resolution.
Firstly, if a dispute is able to be resolved in this manner, the parties are in control of the outcome as opposed to a Judge or other decision maker.

If a matter proceeds to litigation, the parties will be required to put their evidence before the Court or Tribunal hearing the matter, but ultimately the decision will be taken out of their hands and handed down by a Judge or Tribunal member who may or may not find in your favour.

Alternative dispute resolution is also much cheaper than having your matter determined by a Court or Tribunal. Litigation of any type is prohibitively expensive because it is time consuming, complex and usually involves not only Lawyers’ costs, but also the costs of Barristers and in some cases expert witnesses. It is not uncommon for the legal costs associated with a dispute to represent a large portion of and in some cases outstrip the sum of money that is at the centre of the dispute. While there is still a cost to ADR, if the parties are able to resolve a dispute without proceeding to a Court hearing, they will save tens of thousands of dollars in costs.

Thirdly, alternative dispute resolution usually results in an outcome that each of the parties may not be happy about but can live with. Rather than there being a winner and a loser, the outcome is more balanced.

Fourthly, resolving a matter by way of ADR means the parties avoid the stress of litigation. No matter who you are, litigation takes and extremely long time and is emotionally and mentally tolling. Rarely do we see clients at the end of a litigated matter who are happy and stress-free.

There is significant value in avoiding the personal toll litigation can take by settling a dispute early.

We always encourage our clients to engage in alternative dispute resolution for the above reasons. Don’t get us wrong, we love to go to court because that is what Lawyers do, however quite often the outcome of litigation is that the Lawyers and Barristers end up with big cheques in their pockets (which for the most part they have earned fairly and squarely), but this is at the expense of the parties who could have saved themselves a lot of time, money and energy by trying to resolve the matter early on via alternative dispute resolution.

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