Alternative Dispute Resolution (ADR) refers to conflict resolution outside of court using ADR techniques like negotiation, mediation, and arbitration. In the traditional justice system, disputing parties bring their case before a judge who hears both sides of the conflict and renders a judgment based on the applicable law, which could be from legislation, the precedent set by courts in previous cases, or customary law. ADR aims to address the deficiencies of the modern justice system which include delay, high cost, uncertainty, and unjust outcomes. Below, we will explore how ADR helps resolve conflicts efficiently and effectively.
ADR Promotes Fairness and Access to Justice
The formal judicial system is set up to function through established court rules. For example, parties must meet specific deadlines when submitting legal documents to the court and file the documents in a manner stipulated by the court. A party who fails to follow the court rules may lose his case based on a technicality. Moreover, in most cases, judges are bound to interpret and apply the law regardless of its impact on the parties, sometimes leading to unfair results.
On the other hand, alternative dispute resolution methods offer parties the opportunity to reach an agreement that will benefit them by encouraging them to work collaboratively in exploring options that will lead to mutual satisfaction. Moreover, even when parties need the intervention of a third party, they can choose someone they trust to assist them in resolving the case. This participation by parties in selecting the arbiter, which may be a mediator or arbitrator, gives parties a sense of fairness in the process regardless of the outcome. However, in the judicial system, parties are assigned a judge without any input from the parties. If a party feels that a judge in the court system is biased against them, they may not accept the court’s decision and will appeal the case even if the judge acted impartially.
ADR is Cheaper
Alternative dispute resolution (ADR) is typically a more cost-effective option than litigation, making it accessible to all parties involved in the dispute regardless of their financial status. ADR services are often provided at little or no cost to the parties, enabling a party to resolve a case without ever needing to set foot in court. Also, ADR is generally less formal, and parties may present their case without legal representation or expert witnesses. In contrast, litigation can quickly become very expensive, with the attorney fees easily amounting to tens of millions of naira. Parties may also incur costs for expert witnesses and other third parties who may need to testify in court.
ADR Leads to Speedier Resolution of Disputes
ADR methods offer speedier alternatives to resolving conflicts. Courts typically take years to render judgments. ADR methods are faster because parties can schedule a negotiation, mediation, or arbitration as quickly as they choose. Moreover, ADR methods are not inhibited by rules of courts which require specific steps to be completed at each stage of the litigation process before trial can commence. Additionally, ADR methods are not subject to case backlogs common in the court system.
When I worked as a mediator, I resolved a contentious dispute between two parties. Later, each of them called and thanked the agency I worked with for resolving the conflict quickly within weeks of receiving the case. They said they had been in court for over a year before coming to the agency, spending money on attorney fees without obtaining any resolution. They regretted not coming to the agency before going to court. It is important to point out that the agency I worked for offered the mediation service at no cost to the parties.
Mediation and other ADR processes provide speedier resolutions because parties are in charge of the ADR process and can move things along as quickly as they want without being subject to a court’s calendar or availability.
There is No Winner or Loser in ADR
A court typically enters judgment in favor of one party over the other. A person who sues another for monetary damages and receives no award from the court is considered to have lost the case. Similarly, a defendant against whom a judgment is entered is deemed to have lost the legal battle. However, with ADR, there is often no winner or loser except for arbitration cases.
In ADR, because there is no clear-cut winner or loser, parties are usually satisfied with the outcome even when they do not get everything they want. To illustrate this point, let’s consider an example of disputes that arose from the Covid-19 pandemic. When governments forced businesses and individuals into lockdown in early 2020, some state governments, like California, intervened on behalf of struggling tenants by passing laws preventing evictions for those who had experienced economic hardship due to the pandemic. To ease the financial harm this caused landlords, the government offered landlords 80% of their lost rent in exchange for the landlords forgiving the rest of the rent owed by the affected tenants. This solution was mutually beneficial to landlords and the government as it prevented a potential homelessness crisis while allowing landlords to cover their mortgages and other expenses with the amount they received from the government. While the landlords did not receive the total rent owed to them, the compromise reached was enough to address the concerns of all parties involved.
Parties Often Comply with ADR Settlements
Winning a lawsuit is often like winning a battle and losing the war because losing parties either hide their assets, appeal the judgments, sometimes as a delay tactic, or declare bankruptcy, thus denying the victor the “spoils of war.” I experienced something similar when I practiced law in Nigeria. It was common knowledge that enforcing monetary judgments against the Nigerian Police Force for violating fundamental human rights was arduous. Similarly, more than 80% of judgments obtained in the United States are estimated to go unenforced.
Judgment debtors know that executing a judgment is a grueling experience for creditors, equivalent to re-litigating the original suit. Hence, they force judgment creditors to settle disputes for less than the judgment amounts awarded by the courts at best, and at worst, they do not pay any portion of the judgment sum at all.
Contrary to the above, parties who reach a mutually agreed settlement, either through mediation or negotiation, often comply with the terms of the settlement agreement. According to some estimates, the negotiated or mediated settlement compliance rate is about 90%. Therefore, ADR is better than litigation when you seek closure and finality in a dispute.
ADR Process Is Amicable
Engaging in an adversarial process like litigation is emotionally draining and stressful. It robs the parties of their peace of mind. Besides the financial strain involved, parties are often worried during the lawsuit, and rightfully so. Not only do they not have control of the case’s outcome and what it could mean for them, but they also worry about surprises the other party could spring on them. For example, private conversations secretly recorded could be played in court in jurisdictions that allow such evidence. These uncertainties can cause significant anxiety and stress for the parties involved.
ADR Processes are Confidential
ADR proceedings are typically confidential and often lead to equally confidential settlements. In today’s society, where information spreads rapidly through social media and the 24-hour news cycle, keeping private matters out of the court system is valuable. Lawsuits and documents filed in court are public records unless a court orders them sealed. This is especially important in Nigeria, where credit reporting agencies have emerged, and a judgment entered against you can negatively impact your credit.
Litigating your dispute in court invites the public to air their opinions on private matters. ADR helps keeps private matters out of the public domain and reduces the risk of scandalous issues being revealed to the public as part of a court proceeding.
ADR Offers Reliefs Courts Cannot Award
Increasingly, one of the clauses I see in settlement agreements is a non-disparagement clause. The clause often precludes parties from saying harmful things about each other. With the prevalence of review sites like Google, Yelp, and others, one negative review can deter a potential customer from patronizing a business, hence the need to protect the reputation of your business. One of the significant benefits of alternative dispute resolution (ADR) is that it allows for the consideration of the interests of all parties involved in the dispute rather than focusing on who is right or wrong. During ADR, parties can table all their concerns and negotiate for critical issues, some of which may not be obtainable through the courts. This approach can lead to more satisfactory resolutions for all parties involved and potentially preserve relationships that an adversarial legal process would have damaged.
Also, during the ADR process, parties can brainstorm creative ways to resolve the dispute considering the unique facts and circumstances of the case. For example, a party who agrees to pay money to the other party as part of a settlement may negotiate to make the payments over time rather than as a lump sum.
In conclusion, filing a lawsuit and seeing it through to a favorable conclusion through trial is not an easy task. Some people abandon their lawsuits when they run out of money to pay legal fees. Therefore, the decision to file a case should be carefully considered. Before filing a lawsuit, explore ADR which is often offered through government agencies like the Public Complaints Commission in Nigeria, or through private mediators.
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