For our studentsADR

LawpreneurzADR

LECTURE 02

SALIENT FEATURES OF ALTERNATIVE DISPUTE RESOLUTION

Alternative Dispute Resolution, as the name suggests, is an alternative to the traditional process of dispute resolution through courts. It refers to a set of practices and techniques to resolve disputes outside the courts. It is mostly a non-judicial means or procedure for the settlement of disputes. In its wider sense, the term refers to everything from facilitated settlement negotiations in which parties are encouraged to negotiate directly with each other prior to some other legal process, to arbitration systems or mini trials that look and feel very much like a court room process. The need for public adjudication and normative judicial pronouncements on the momentous issues of the day is fundamental to the evolution of the land. ADR is necessary to complement and preserve this function of the courts. It has some instrumental and intrinsic functions; it is instrumental in so far as it enables amicable settlement of disputes through means which are not available generally through courts. It is intrinsic because it enables the parties themselves to settle their disputes.

Our Constitutional goal is to achieve Justice- social, economic and political (as mentioned in the Preamble of the Constitution). Access to fast, inexpensive and expeditious justice is a basic human right. Equal access to justice for all segments to society is important to engender respect for law and judicial system. Access to justice would be meaningful, if the judicial system yields result through a fair process and within a prescribed time. Amicable settlement of disputes is very essential for maintenance of social peace and harmony in the society. Our Constitution mandates that the "state shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that the opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities."

The mounting arrears in the courts, inordinate delays in the administration of justice and expenses of litigation have the potential to erode public trust and confidence in the judicial system, which is the pillar of our democracy. Delay also gives rise to corruption and other evils. Ideally speaking judicial system is blind to power, wealth and social status. Courts are supposed to offer a forum, where the poor, powerless and marginalized can stand with all others as equals before the law. With the present state of affairs, many of our poor fellow citizens have chosen to avoid courts rather than face intimidation cost and time in legal proceedings. The legal problems faced by the poor and down trodden are compounded by their lack of awareness of whom to approach to redress their grievances.

The need to get away from the conception that court is the only place to settle disputes has led to exploring the possibility of creating a dispute resolving mechanism which would be flexible and saves valuable time and money. In its 14th Report, Law Commission of India recommended devising of ways and means to ensure that justice should be simple, speedy, cheap effective and substantial. In its 77th Report Law Commission of India observed that the Indian society is primarily an agrarian society and is not sophisticated enough to understand the technical and cumbersome procedures followed by the courts.

The search for a simple, quick, flexible and accessible dispute resolution system has resulted in the adoption of 'Alternative Dispute Resolution' mechanisms. ADR represents only a change in forum, not in the substantive rights of the parties. ADR is not intended to supplant altogether the traditional means of resolving disputes by means of litigation. The primary object of ADR system is avoidance of vexation, expense and delay and promotion of the ideal of "access to justice".

There are three important factors in every arbitration arrangement. The first relates to nomination, second relates to legality of the award given by the arbitrator and third the permissible area of challenge to the arbitrator's award. Accepting the award is the normal excepted code of conduct of the parties who have chosen an arbitrator. It is but natural that they have initially reposed faith on the arbitrator or the arbitrators, as the case may be. If the award is not to the choice of the parties or any one of them, it would be unfair to the arbitrator or the arbitrators, as the case may be, to term the award as the outcome of the malafide. It is, therefore, very unfortunate that increasingly misconduct by the arbitrator or the arbitrators as the case may be is alleged. Sometimes obnoxious allegations are made. The image should be untarnished. There may be black sheep like any other sphere of human life. But then that fallacy can be remedied by making a wise choice at the threshold.

Following are the SALIENT FEATURES of Alternative Disputes Resolution Mechanism:

I. MEANING AND DEFINITION OF ALTERNATIVE DISPUTE RESOLUTION

Human conflicts are inevitable. Disputes are equally inevitable. It is difficult to imagine a human society without conflict of interests. Disputes must be resolved at minimum possible cost both in terms of money and time, so that more time and more resources are spared for constructive pursuits.

'Alternative Dispute Resolution' or ADR is an attempt to devise a machinery which should be capable of providing an alternative to the conventional methods of resolving disputes. An alternative means the privilege of choosing one of two things or courses offered at one's choice. It does not mean the choice of an alternative court but something which is an alternative to court procedures or something which can operate as court annexed procedure.

ADR originated in the USA in a drive to find alternatives to the traditional legal system, felt to be adversarial, costly, unpredictable, rigid, over-professionalized, damaging to relationships and limited to narrow right-based remedies as opposed to creative problem-solving. The American origin of the concept is not surprising, given certain features of litigation in that system, such as: trial of civil actions by a jury, lawyers' contingency fees, and lack of application in full of the rule "the loser pays the costs".

Alternative Dispute Resolution is an alternative to the traditional process of dispute resolution through courts. It refers to set of practices and techniques to resolve disputes outside the courts. It is mostly a non-judicial means or procedures for the settlement of disputes. ADR has been a spoke in the wheel of the larger formal legal system in India since time immemorial. The search for a simple, quick, flexible and accessible dispute resolution system has resulted in the adoption of 'Alternative Dispute Resolution' mechanisms. The primary object of ADR system is avoidance of vexation, expense, and delay and the promotion of the ideal of "access to justice".

The ADR techniques mainly consist of negotiation, conciliation, mediation, arbitration and Lok Adalats.
Arbitration is adjudicatory and the result is binding, where as Conciliation is consensual and very helpful in making the parties in setting their disputes mutually with the help of a neutral third person. The success of conciliation depends on the mental attitude of the parties, the skill of the conciliator and creation of proper environment which is most essential in matrimonial disputes.
Negotiation is a non-binding procedure resorted to buy the parties for arriving at a negotiated settlement. Willingness to resolve the dispute and objectivity necessarily becomes essential to arrive at a negotiated settlement.
Mediation is a decision- making process in which the parties are assisted by a third party, the mediator. The mediator attempts to improve the process of decision making and to assist the parties' reach an outcome to which each of them can consent.

ADR is based on more direct participation by the disputants rather than being run by lawyers and judges. This type of involvement is believed to increase people's satisfaction with the outcome as well as their compliance with the settlement reached. Most ADR processes are based on an integrative approach. They are more cooperative and less competitive than adversarial court based methods like litigation. For this reason, ADR tends to generate less escalation and ill-will between parties. This is a key advantage in situation where the parties continue to interact after settlement is reached, such as in matrimonial cases or labour-management cases.

Alternative Dispute Resolution System (ADR) has been a spark in the wheel of larger formal legal system in India since time immemorial. If we look back in to our history, we find that during ancient and medieval period the disputes were being resolved in an informal manner by a neutral third person, who would be either an elderly person or a chief of a village or a clan or by a panchayat. The adversarial system of justice, which we adopted later, has proved costly and time consuming. To a great extent time is consumed over procedural wrangles, technicalities of Law and inabilities of large number of litigants to engage lawyers. The problem of delay in deciding the matters has resulted in long pendency.

A time had come when litigants were afraid of approaching the courts with their civil and other types of disputes, as they have no assurance that the claims would be settled within the near foreseeable future. Equally, the time had come when parties or clients to a contract, which had an alternative dispute settlement clause or arbitration clause were wondering whether it would not be safer and quicker to resort to the civil and other courts. In this regard the Arbitration and Conciliation (Amendment) Bill, 2003 when passed proved to be a true panacea to cure these ills. Presently it's the Arbitration and Conciliation (Amendment) Act, 2019, which came into force in India on 9th August, 2019, which deals with all types of arbitration.

The search for a simple, quick, flexible and accessible dispute resolution system has resulted in the adoption of 'Alternative Dispute Resolution' mechanisms. Most simply put, Alternative Dispute Resolution denotes all forms of dispute resolution other than litigation and adjudication through courts.

However, Carrow defined "Alternative Dispute Resolution as including binding arbitration in the minds of some since it qualifies as an alternative to court litigation. The better view is that the distinguishing feature of ADR is that the parties with few exceptions, determine their own destiny rather than having the decision of another imposed upon them".

According to Akinsaya, "ADR is the abbreviation of Alternative Dispute Resolution and is generally used to describe the methods and procedures used to resolve disputes either as an alternative to the traditional disputes resolution mechanism of the court or in some cases as supplementary to such mechanism". In other words, these processes are designed to aid parties in resolving their disputes without the need for a formal judicial proceeding. He went further to say that Alternative Resolution Mechanism is also known as PDR- Preferred Dispute Resolution. Many writers are of the view that ADR is strictly not a new idea because from idea because from time immemorial people have settled their disputes through third party intervention using alternative forum.

Mr. Aina defines Alternative Dispute Resolution in these regards:-

"The letters ADR stands for 'Alternative Resolution Dispute'- a new approach to dispute processing. It refers to a range of mechanisms designed to assist disputing parties in resolving an ongoing dispute.
In other words, ADR thus involves not only the application of new or different methods to resolve disputes, but also the selection or design of a process which is best suited to the particular dispute and to the parties in dispute".

The term "ADR" or "Alternative Dispute Resolution" has different meanings in different contexts. The literature review did not reveal an accepted definition of the term, but rather suggested that it is commonly used as an umbrella term for practices that go beyond the resolution of specific disputes between parties. ADR may not refer to a specific process, but rather to a shared set of methods, goals assumptions or values.

As of the early 2000s, ADR techniques were being used more and more, as parties and lawyers and courts realized that these techniques could often help them resolve legal disputes quickly and cheaply and more privately than could conventional litigation. Moreover, many people preferred ADR approaches because they saw these methods as being more creative and more focused on problem solving than litigation, which has always been based on an adversarial model.

The term alternative dispute resolution is to some degree a misnomer. In reality, fewer than 5% of all lawsuits filed go to trial; the other 95% are settled or otherwise concluded before trial. Thus, it is more accurate to think of litigation as the alternative and ADR as the norm. Despite of this fact, the term alternative dispute resolution has become such a well accepted shorthand for the vast array of non-litigation processes that its continued use seems assured.

II. JUSTICE MALIMATH COMMITTEE REPORT

Justice Malimath Committee in its Report recommended:

If a law is enacted giving legal sanction to such machinery for resolution of disputes and resort thereto is made compulsory, much of the inflow of commercial litigation in regular civil courts gradually moving up hierarchically would be controlled and reduced.

This Committee agreeing with the Law Commission recommended that Conciliation Courts should be established all over the country with power, authority and jurisdiction to initiate conciliation proceedings in all types of cases at all levels and that the amendment suggested by the Law Commission should be carried out to enable the Scheme to function effectively. The conciliation procedure should also be made applicable to the Motor Accident Claims Tribunal.

III. CONSTITUTIONAL BACKGROUND OF ALTERNATIVE DISPUTE RESOLUTION

"It is settled law that free legal aid to the indigent persons who cannot defend themselves in a Court of law is a Constitutional mandate under Article 39-A and 21 of the Indian Constitution. The right to life is guaranteed by Article 21." The law has to help the poor who do not have means i.e. economic means, to fight their causes.

Indian civilisation put at about 6000 years back, at the dawn of civilisation (i.e. the age of the Vedas), when habitation was growing at river banks, was devoid of urbanisation, where the Creator was presumed to be the head of humanity. With the dawn of industrialisation, man was walking into orderly society, State and nation, dependence on law for orderly conduct gained momentum. Then came on the horizon of social dispute resolution mechanism. With Indian Courts piling up cases for millennium (in the place of indigenous system which was cheap and quick), alternative dispute systems had to be found. Thus this system took birth. Once the dispute was resolved, there was no further challenge.

The Constitutional mandate rescue operation began with Justice V.R Krishna Iyer and Justice P.N. Bhagawati's Committees' report; weaker section thus became enabled to approach law courts, right from Munsiff Courts to the Supreme Court.
Committee for the Implementation of Legal Aid Services (CILAS) also came on to the scene and initiated methods of solving civil disputes in non-legal forum and non-formal forum

Based on this, States adopted (through State Legal Aid and Advice Boards) Lok Adalats and Legal Aid Camps, Family Courts, Village Courts, Mediation Centres, Commercial arbitration, Women Centres, Consumer Protection Forums, etc which are but various facets of effective Alternative Dispute Resolution systems.

The soul of good Government is justice to people. Our Constitution, therefore, highlights triple aspects of Economic Justice, Political Justice and Social Justice. This requires the creation of an ultra-modern disseminating infrastructure and man-power; sympathetic and planned; need for new judiciary technology and models; and remedy-oriented jurisprudence.

IV. LEGISLATIVE RECOGNITION OF ALTERNATIVE DISPUTE REDRESSAL

Alternative Dispute Redressal or Alternative Dispute Resolution has been an integral part of our historical past. Like the zero, the concept of Lok Adalat (Peoples' Court) is an innovative Indian contribution to the world of Jurisprudence. The institution of Lok Adalat in India, as the very name suggests means, Peoples' Court. 'Lok' stands for 'people' and the vernacular meaning of the term 'Adalat' is the Court. India has long tradition and history of such methods being practiced in the society at grass root level. These are called panchayat, and in legal terminology these are called arbitration. These are widely used in India for resolution of disputes both commercially and non-commercially.

The ancient concept of settlement of disputes through mediation, negotiation or through arbitral process is known as "Peoples' Court Verdict" or "Nyaya-Panch" which is conceptualized and institutionalized in the philosophy of Lok Adalat. Some people equate Lok Adalat to conciliation or mediation, whereas some treat it with negotiation or arbitration. Those who find it different from all these, call it "Peoples' Court". It involves people who are directly and indirectly involved by dispute resolution.

The concept of Lok Adalat was pushed back into oblivion in last few centuries before independence and particularly during the British regime. Now this concept has once again been rejuvenated. It has once again become familiar and popular amongst litigants.

The movement towards Alternative Dispute Redressal (ADR) has received Parliamentary recognition and support. The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats, pursuant to the constitutional mandate in Article- 39A of the Constitution of India, which contains various provisions for settlement of disputes through Lok Adalat. It is an Act to constitute legal service authorities to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic and other disabilities, and to organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. Before the enforcement of the Act, the settlements of disputes were in the hands of the Panchayat head or the tribal head. But when statutory recognition had been given to Lok Adalat, it was specifically provided that the award passed by the Lok Adalat formulating the terms of compromise will have the force of decree of a court which can be executed as a civil court decree.

In India, laws relating to resolution of disputes have been amended from time to time to facilitate speedy dispute resolution. The Judiciary has also encouraged out of court settlements to alleviate the increasing backlog of cases pending in the courts. To effectively implement the ADR mechanism, organizations like ICA, ICADR were established, Consumer Redressal forums and Lok Adalats revived. The Arbitration Act, 1940 was repealed and a new and effective arbitration system was introduced by the enactment of the Arbitration and Conciliation Act, 1996.This law is based on the United Nations Commission on International Trade Law (UNCITRAL) model law on International Commercial Arbitration.

In Sitanna v. Viranna, AIR 1934 SC 105, the Privy Council affirmed the decision of the Panchayat and Sir John Wallis observed that the reference to a village panchayat is the time-honoured method of deciding disputes. It avoids protracted litigation and is based on the ground realities verified in person by the adjudicators and the award is fair and honest settlement of doubtful claims based on legal and moral grounds.

The legislative sensitivity towards providing a speedy and efficacious justice in India is mainly reflected in two enactments. The first one is the Arbitration and Conciliation Act, 1996 and the second one is the incorporation of section 89 in the traditional Civil Procedure Code (CPC).

The adoption of the liberalized economic policy by India in 1991 has paved way for integration of Indian economy with global economy. This resulted in the enactment of the Arbitration and Conciliation Act, 1996 (new Act) by the legislature as India had to comply with well-accepted International norms. It superseded the obsolete and cumbersome Arbitration Act, 1940. The new Act has made radical and uplifting changes in the law of arbitration and has introduced new concepts like conciliation to curb delays and bring about speedier settlement of commercial disputes. The new Act has been codified on the lines of the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law (UNCITRAL). One of the most commendable objects of the new Act is to minimize the role of the courts in the arbitration process. The Arbitration and Conciliation Act, 1996 laid down the minimum standards, which are required for an effective Alternative Dispute Resolution Mechanism.

Further, the recent amendments of the Civil Procedure Code will give a boost to ADR. Section 89 (1) of CPC deals with the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement. While upholding the validity of the CPC amendments in Salem Advocate Bar Association, Tamil Nadu v. U.O.I, (2005) SCC6 (344), the Supreme Court had directed the constitution of an expert committee to formulate the manner in which section 89 and other provisions introduced in CPC have to be brought into operation. The Court also directed to devise a model case management formula as well as rules and regulations, which should be followed while taking recourse to alternative dispute redressal referred to in Section 89 of CPC. All these efforts are aimed at securing the valuable right to speedy trial to the litigants.

ADR was at one point of time considered to be a voluntary act on the apart of the parties which has obtained statutory recognition in terms of Civil Procedure Code (Amendment) Act, 1999; Arbitration and Conciliation Act, 1996; Legal Services Authorities Act, 1997 and Legal Services Authorities (Amendment) Act, 2002. The access to justice is a human right and fair trial is also a human right. In India, it is a Constitutional obligation in terms of Art.14 and 21. Recourse to ADR as a means to have access to justice may, therefore, have to be considered as a human right problem. Considered in that context the judiciary will have an important role to play.

The Supreme Court of India has also suggested making ADR as 'a part of a package system designed to meet the needs of the consumers of justice'. The pressure on the judiciary due to large number of pending cases has always been a matter of concern as that being an obvious cause of delay. The culture of establishment of special courts and tribunals has been pointed out by the Hon'ble Supreme Court of India in number of cases. The rationale for such an establishment ostensibly was speedy and efficacious disposal of certain types of offences.

Industrial Disputes Act, 1947 provides the provision both for conciliation and arbitration for the purpose of settlement of disputes. In Rajasthan State Road Transport Corporation v. Krishna Kant, 1995 AIR 1715, the Supreme Court observed: "The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute-resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute."

Section 23(2) of the Hindu Marriage Act, 1955 mandates the duty on the court that before granting relief under this Act, the Court shall in the first instance; make an endeavour to bring about reconciliation between the parties, where it is possible according to nature and circumstances of the case. For the purpose of reconciliation the Court may adjourn the proceeding for a reasonable period and refer the matter to person nominated by court or parties with the direction to report to the court as to the result of the reconciliation [Section 23(3) of the Act].

The Family Court Act, 1984 was enacted to provide for the establishment of Family Courts with a view to promote conciliation in, and secure speedy settlement of, disputes relating to marriage and family affairs and for matter connected therewith by adopting an approach radically different from the ordinary civil proceedings . Section 9 of the Family Courts Act, 1984 lays down the duty of the family Court to assist and persuade the parties, at first instance, in arriving at a settlement in respect of subject matter. The Family Court has also been conferred with the power to adjourn the proceedings for any reasonable period to enable attempts to be made to effect settlement if there is a reasonable possibility.

Shri M.C. Setalvad, former Attorney General of India has observed: "….equality is the basis of all modern systems of jurisprudence and administration of justice… in so far as a person is unable to obtain access to a court of law for having his wrongs redressed or for defending himself against a criminal charge, justice becomes unequal, …Unless some provision is made for assisting the poor men for the payment of Court fees and lawyer's fees and other incidental costs of litigation, he is denied equality in the opportunity to seek justice."

V. ADVANTAGES AND DISADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION

Mahatma Gandhi, the Father of the Nation, wrote in his autobiography about the role of law and the lawyer-

"I had learnt the true practice of law. I had learnt to find out the better side of human nature, and to enter man's heart. I realised that the true function of a lawyer was to unite parties. The lesson was so indelibly burnt into me that the large part of my time during the 20 years of my practice as a lawyer was occupied in bringing about private compromise of hundreds of cases. I lost nothing thereby not even money, certainly not my soul."

Any conflict is like cancer. The sooner it is resolved the better for all the parties concerned in particular and the society in general. If it is not resolved at the earliest possible opportunity, it grows at a very fast pace and with time the effort required to resolve it increases exponentially as new issues emerge and conflicting situations galore. One dispute leads to another. Hence, it is essential to resolve the dispute the moment it raises its head. The method to achieve this goal must be agreeable to both the parties and it should achieve the goal of resolving the dispute speedily.

As Justice Warren Burger, the former Chief Justice of the American Supreme Court observed in the American context:

"The harsh truth is that we may be on our way to a society overrun by hordes of lawyers, hungry as locusts, and bridges of judges in numbers never before contemplated. The notion that ordinary people want black-robed judges, well-dressed lawyers, and fine panelled courtrooms as the setting to resolve their disputes is not correct. People with legal problems like people with pain, want relief and they want it as quickly and inexpensively as possible."

This observation with greater force applies in the Indian context. Alternative Dispute Resolution consists of several techniques being utilized to resolve disputes involving a structural process with third party intervention. ADR system avoids the rigidity and inflexibility of traditional and orthodox procedures. Technique of ADR is an effort to design workable and fair alternative to our traditional judicial system. The traditional system of dispute resolution is doing away with delays and congestion in courts. With the drastic increase in population, such number of cases is also increasing day by day. So quick disposal of cases is required so that the court does not remain over burdened with cases. And so for this reason ADR mechanisms are proceeded with for quick disposal of cases.

The framework of ADR mechanism that has emerged is comprehensive. But its success depends much on the will of the people to work it up in the right spirit and with good faith. The parties have to be made aware and educated about the advantage of adopting ADR mechanism. The reason given to the ADR mechanisms is that the society, state and the party to the dispute are equally under an obligation to resolve the dispute as soon as possible before it disturbs the peace in the family, business community, society or ultimately humanity as a whole. The system of dispensing justice in India has come under a great stress of several reasons mainly because of the huge pendency of cases in courts. In India, the number of cases filed in the courts has shown a tremendous increase in recent years resulting in pendency and delays underlining the need for alternative dispute resolution methods. While discussing in brief about the need for Alternative Dispute Resolution in India, it is to mention that a resolution was adopted by the Chief Ministers and Chief Justices of the States in a conference which was held in New Delhi on 4th Dec. 1993 under the chairmanship of the then Prime Minister and presided over by the Chief Justice of India. Thereby, the Chief Ministers and the Chief Justices were of the opinion that the Courts were not in a position to bear the entire burden of justice system and the number of disputes lent themselves to resolution by alternative modes such as arbitration, conciliation, mediation and negotiation. They emphasized the desirability of disputants taking advantage of alternative dispute resolution which provided procedural flexibility, saved valuable time and money and avoided the stress of a conventional trial.

Globalization has been a great stimulation in the process of integration of economics and societies of different countries across the globe. It has been a great tool for breaking economic barrier and envisioning world as a market for trade. When economies and societies integrate it indubitably leads to the rise in various types of disputes such as- industrial disputes, commercial disputes, international disputes etc. The remedy is not in avoidance of these disputes but rather in building mechanisms to resolve these disputes amicably. It is a sine quo non for growth and for maintaining peace and harmony in every society. ADR is being increasingly acknowledged in the field of law and commercial sectors both at national and international levels. Its diverse methods have helped parties to resolve their disputes at their own terms cheaply and expeditiously.

  • Advantages:

Alternative Dispute Resolution is based on more direct participation by the disputants rather than being run by lawyers and Judges. This type of involvement is believed to increase people's satisfaction with the outcome as well as their compliance with the settlement reached. Most ADR processes are based on an integrative approach. They are most co-operative and less competitive than adversarial court based methods like litigation. For this reason, ADR tends to generate less escalation and ill-will between parties. This is a key advantage in situations where the parties must continue to interact after settlement is reached, such as in matrimonial cases or labour-management cases. Following are the advantages of ADR:

  • It can be used at any time, even when a case is pending before a Court of Law.
  • It can be used to reduce the number of contentious issues between the parties; and it can be terminated at any stage by any of the disputing parties.
  • It can provide a better solution to dispute more expeditiously and at less cost than regular litigation.
  • It helps in keeping the dispute a private matter and promotes creative and realistic business solutions, since parties are in control of ADR proceedings.
  • The ADR is flexible and not governed by the rigorous of rules or procedures.
  • The freedom of parties to litigation is not affected by ADR proceedings. Even a failed ADR proceeding is never a waste either in terms of money or times spent on it, since it helps parties to appreciate each other's case better.
  • The ADR can be used with or without a lawyer. A lawyer however, plays a very useful role in identification of contentious issues, position of strong and weak points in a case, rendering advice during negotiations and overall presentation of his client's case.
  • ADR helps in reduction of work load of courts and thereby helps them to focus attention on other cases.
  • The ADR procedure permits to choose neutrals who are specialists in the subject-matter of the dispute.
  • The parties are free to discuss their difference of opinion without any fear of disclosure of facts before a Court of Law.
  • The last but not the least is the fact that parties are having the feeling that there is no losing or winning feeling among the parties by at the same time they are having the feeling that their grievance is redressed and the relationship between the parties is restored.
  • The ADR system is apt to make a better future. It paves the way to further progress.
  • Disadvantages:

There are some ADR does not have many potential advantages, but there are also some possible drawbacks and criticisms of pursuing alternatives to court-based adjudication. Some critics have concerns about the legitimacy of ADR outcomes, charging that ADR provides "second-class justice." It is argued that people who cannot afford to go to the court are those most likely to use ADR procedures. As a result, these people are less likely to truly "win" a case because of the co-operative nature of ADR. Following points may be dealt as some of the disadvantages of ADR:

  • Situations when ADR may not be appropriate, and may even carry a degree of risk for one of the parties. It is important for the advisers to use their professional judgement in each case, but this section outlines key factors for consideration.
  • There may be an imbalance of power between the parties, which could make face-to-face mediation unfair. This could include family or neighbour mediation where there has been violence or the threat of violence; or mediation between an individual and a large organisation such as a local authority, where the size and resources of the organization would put the individual at a disadvantage.
  • There may be an urgent need (for example to prevent eviction) which requires an immediate legal remedy.
  • Mediation and Ombudsmen do not provide a legally binding, enforceable outcome, and decisions do not act as precedents in future cases.
  • Legal rights and Human rights cannot be relied on in ADR processes, which are private, confidential and not open to public scrutiny.
  • Ombudsmen investigations can be very slow.
  • Although Ombudsmen can make compensation awards, they are often lower than is likely to be achieved in court.
  • There are no consistent quality standards or regulation for ADR providers, so it can be hard for the advisers or their clients to know how to choose a good service.
  • Where a dispute involves difficult legal points a mediator or an arbitrator is unlikely to have the same legal expertise and knowledge as a judge. Disputes can be of various situations such as- commercial conflicts, social conflicts, legal conflicts and many others which require specialized mediator. Most of the cases the mediator possess a judge's point of view.
  • The arbitrator's decision can require a court action if one of the parties refuse to accept the arbitrator's decision. This would not only create chaos but also a mandatory review by the court. Thus ADR sometimes raises the question of biasness of arbitrator's decision. Also there is very limited opportunity for judicial review of an arbitrator's decision. A court might also overturn an arbitrator's decision if its decided issues were not within the scope of the arbitration agreement.
  • Alternative Dispute Resolution generally resolves only issues of money or civil disputes. Alternative Dispute Resolution proceedings will not result in injunctive orders. They cannot result in an order requiring one of the parties to do or cease doing a particular affirmative act.
  • ADR generally proceed without protections offered to the parties in litigation, such as those rules governed through discovery. Courts generally allow a great deal of latitude in the discovery process, which is not active in alternative dispute resolution.

It is important to consider these advantages and disadvantages before agreeing to arbitration, or any other kind of alternative dispute resolution. Chances are that we have already agreed to arbitration in many situations, without even knowing it. Many lease agreements and employment contracts have mandatory arbitration provisions, and they are usually enforced, as long as certain standards are met (generally, they must not deprive a person of a constitutional right, and they should be reciprocal).

Lawpreneurz Details of lecture

Sr No. Topics
Lecture 1 Definition, Origin and Scope
Lecture 2 Salient Features of Alternative Dispute Resolution Mechanisms
Lecture 3 Part I Arbitration and Conciliation Act, 1996 - Part I
Lecture 3 Part II Arbitration and Conciliation Act, 1996 - Part II
Lecture 3 Part III Mediation and Negotiation
Lecture 3 Part IV Lok Adalats
Lecture 4 UNCITRAL model law and Enforcement of Foreign Awards

Lawpreneurz Student Testimonial

I subscribed to Lawpreneurz for lectures on various core subjects forming a part of the syllabus for DJSE. These lectures proved to be of great help not only in terms of conceptual clarity but also constant availabilty. Law students should definitely access these lecures.

Shipra Dhanker
Shipra DhankerTopper for Delhi Judicial Services 2019