Let’s begin with the question, what exactly is ADR, how would one define it for the benefit of the layman? ADR is a procedure for settling disputes by means other than litigation involving the help of a third party that remains neutral such as Arbitration, Mediation and Conciliation.
ADR typically denotes a wide range of dispute resolution techniques that help disputing parties come to an agreement short of litigation i.e. a collective term for the ways parties can settle disputes with the help of a third party.
It is worthy to note that the ADR process is party driven this means that the parties have the opportunity to tell their side of the story and have more control over the outcome than normal trials overseen by a judge.
Many parties desire the chance to speak their piece in their own words rather than through counsel. In Nigeria, the ADR process is increasingly being adopted as a tool to help settle disputes alongside the court system itself.
In spite of historic resistance to ADR by a lot of popular parties and their advocates, ADR has gained widespread acceptance among the general public and the legal profession in recent years.
Some courts require parties to seek resolution of their disputes via ADR irrespective of the particular process chosen before permitting matters to be brought before them. In some countries it is even made compulsory for instance, the European mediation Directive 2008 expressly contemplates compulsory mediation which means that attending a mediation session is mandatory, not that a settlement must be reached via the mediation process.
Additionally, parties to merger and acquisition transactions are increasingly turning to ADR, mainly the Arbitration process to resolve post acquisition disputes. The rising popularity of ADR can also be attributed to the massive caseload of the traditional courts and also the perception that ADR imposes fewer costs on the long run than litigation, a preference for confidentiality, the reduced formality and the flexibility which encourages parties to be more relaxed and the need or desire for some parties to have great control over the selection of the third party neutral who will intervene in their dispute.
The ADR process fosters co operation i.e. allowing parties to work with the neutral arbitrator or mediator to resolve the dispute and reach a mutually acceptable remedy. The ADR system is not without its disadvantages but they are in truth quite few and more often than not lie with the ADR process of Arbitration.
With the exception of arbitration, the ADR processes do not always lead to resolution talk less of amicable resolution of disputes. It is possible that you can invest time and money in trying to resolve a matter out of court and still end up having to go on with litigation; however you may end up having a better understanding of the other side’s perspective.
The process may involve or result in the compromise of the legal rights of either of the parties but the compromise is usually based on the decision of the parties themselves seeing the process is party driven. Arbitration decisions are final with very few exceptions.
The decision of a neutral arbitrator cannot be appealed with fraud being an obvious exception. Additionally in some instances, an arbitral award will not be enforced if the decision of the arbitral tribunal is seen to be patently unfair: a high standard to meet indeed.
Another ground for setting aside an arbitral award is if the tribunal’s decision exceeds the scope of the arbitration clause or agreement. Decisions of a court on the other hand can be appealed. Arbitrators resolve disputes that are financial in nature. They cannot give directives compelling a party to do something or refrain from doing a particular thing i.e. give injunctions.
For example an arbitrator cannot change title to real property but this may be subject to the specific language of the arbitration clause in the agreement. The neutral arbitrator or mediator charges a fee for services rendered and depending on the arbitrator or mediator selected, the fees can be substantial even though the parties usually agree to divide the payment between themselves.
Depending on what the law provides and on the contract language, a party can be awarded costs and fees but a judge on the other hand charges no fees as he/she is paid by the government. Often, the contract in dispute may contain a broadly worded mandatory arbitration clause.
Many lease and employment contracts for instance may contain mandatory arbitration provisions just like business contracts and unless both parties waive arbitration, they are compelled to tow that line at the request of either party. Parties that opt for the ADR process must be careful not to run afoul of a statute of limitation while in an ADR process because once the statute expires, judicial remedies will no longer be available.
Emphasis on mediation: The ADR process of Mediation involves a third party neutral assisting the parties to come to a mutually acceptable resolution of their dispute. The parties may meet all together in a room or in separate rooms as the mediator may deem wise and move back and forth between the parties.
Unlike a judge at a trial or an arbitration hearing. The Mediator does not decide how the dispute is resolved but helps the parties involved to decide the best route to resolve or settle the dispute. The parties work together to come to an amicable settlement or compromise that satisfies everyone instead of working against each other.
Mediation often leads to better communication between parties and lasting resolutions. This is important when the parties have a continuing relationship with each other such as neighbors or business partners. It can be quite effective where personal feelings are getting in the way of reaching a resolution.
Mediation normally gives the parties a chance to express their concerns in a voluntary, confidential process while working towards a resolution and compromise; it provides a tremendous level of flexibility for parties. When every party to a dispute leaves a mediation process feeling like they all gave up something to reach the settlement, it is a really good sign that the process was successful.
In as much as there isn’t a perfect answer as to whether to pursue litigation or the ADR process to resolve issues between disputing parties, the circumstances in each matter need to be weighed and seriously analyzed and scrutinized by all concerned in the disputes, even their counsel.
The knowledge that the option of going the route of ADR is open to disputants is a very important first step. This can be done by considering the pros and cons of each door in the ADR system and discussing it with trusted and experienced legal counsel.
So in my humble opinion, the ADR processes are surely the way to go first to help decongest the traditional courts of the massive pending load of cases, next the fact that disputes are settled with speed and ease at less cost and stress to the parties in dispute, the fact that some of the ADR processes like mediation can be held virtually (online) and settlement can still be achieved.
The Nigerian judicial system has got a lot to gain by incorporating the ADR process, making it mandatory that ADR be explored before resorting to litigation. The movement has begun and awareness of the ADR system and process is growing daily and has come to stay.
ABIEYUWA EDIGIN (FICMC), (AcArb),(LLB.HONS), (B.L) 08037761902, [email protected]