Why business owners need to know more about Alternative Dispute Resolution
It’s never been more critical for business owners to have a handle on Alternative Dispute Resolution. Fortunately, when you use it right, it can bring significant benefits. Let’s find out more.
Alternative Dispute Resolution (ADR) has been in the news recently, as the High Court imposed cost sanctions in two cases as a result of one party’s refusal to participate in ADR. In both cases, the parties believed their case was strong enough that they did not need to try to negotiate a settlement. The Court disagreed and penalised them.
Business owners need to know that when you are pursuing legal action, or someone is pursuing a claim against you, you need to be open to ADR, no matter how watertight you believe your case may be.
In this article, we’ll look at precisely what ADR is. We’ll also look at why, aside from these recent rulings, it’s beneficial to be open to resolving your dispute outside of the courtroom.
What is ADR?
Alternative Dispute Resolution is the catch-all term used to describe a way of solving a legal problem between two parties without having to go to court.
There are several methods of ADR, including conciliation, which generally happens in consumer cases, and arbitration, which is typically the method in employment cases.
In most legal cases, the method is mediation. An independent mediator will help both sides focus on the issue and put across their accounts of the problem. They will help you look for common ground and find a way for both parties to leave satisfied. However, mediators do not make decisions on the rights and wrongs of the case; they help you reach an agreement, which both sides can make legally binding.
You may need ADR if you take legal action, or if someone takes legal action against you. Before you undertake the time-consuming and expensive court process, could you find another way to resolve your argument?
Benefits of ADR
The good news is that when you go through ADR instead of taking your case all the way to court, it brings several benefits:
Cost – Although there is a cost to ADR, it is considerably cheaper to resolve a case in this way than going to court
Faster – Court cases can drag on for months or even years. Mediation can happen far more quickly, meaning you can move on
Less stressful – Resolving a dispute in an ADR situation is less pressurised than a courtroom setting
Fairer – ADR could be a fairer way to resolve your dispute, as you will be able to tell your side of the story to the mediator, rather than answering questions posed by a barrister
Win-win – ADR tries to facilitate a situation where both sides get some of what they want, rather than a court where often one side wins and the other gets nothing, under legal precedents
Confidential – ADR can take place in a confidential setting rather than a public courtroom. This is beneficial if you want to avoid negative publicity
Future relationships – With ADR, you may be able to preserve a friendly working relationship with the other party. This is unlikely to happen if you both go to court
The benefit of ADR to the judicial system is that fewer cases go to court, relieving backlogs and streamlining the court system. This is why courts encourage ADR, to the extent of penalising parties that refuse to engage in it.
Don’t ignore the warning
No matter how strong you believe your legal case to be; no matter how sure you are you will win in court, you are well-advised to engage with ADR at the earliest opportunity.
In its reasoning behind imposing cost sanctions on a party that refused to participate, the High Court put it this way:
“No defence, however strong, by itself justifies a failure to engage in any kind of alternative dispute resolution. Experience has shown that disputes may often be resolved in a way satisfactory to all parties, including parties who find themselves able to resolve claims against them which they consider to be well-founded”.
Find out more
If you’re thinking of bringing legal action on behalf of your business, or if someone is threatening legal action against you, it’s time to talk to Couchman Hanson.
At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We’re highly professional, with ‘city’ level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.
Call 01428 722189 or email enquiries@couchmanhanson.co.uk