Alternative dispute resolution (ADR; known in some countries, such as India, as external dispute resolution) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. It is a collective term for the ways that parties can settle disputes, with (or without) the help of a third party.
Alternative dispute resolution (ADR) is generally classified into at least four types: negotiation, mediation, collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as well, but for present purposes it can be regarded as a form of mediation. ADR can be used alongside existing legal systems such as Sharia Courts within common law jurisdictions such as the UK.
ADR is of two historic types. First, methods for resolving disputes outside of the official judicial mechanisms. Second, informal methods attached to or pendant to official judicial mechanisms. There are in addition free-standing and or independent methods, such as mediation programs and ombudsman offices within organizations. The methods are similar, whether or not they are pendant, and generally use similar tool or skill sets, which are basically sub-sets of the skills of negotiation.
The techniques of ADR suffer from many disadvantages. Generally, arbitrators can only resolve disputes that involve money. They cannot issue orders requiring one party to do something, or refrain from doing something (also known as injunctions). They cannot change title to property, either. Also, some of the safeguards designed to protect parties in court may not be present in ADR. These might include the liberal discovery rules used in U.S. courts, which make it relatively easy to get evidence from the other party in a lawsuit.
Also, there is very limited opportunity for judicial review of an arbitrator’s decision. While a large arbitration service could, if it so chose, have some kind of process for internal appeals, the decision is usually final and binding, and can only be reviewed by a court in limited cases. This generally happens when the original arbitration agreement is found to be invalid. Because both parties must voluntarily agree to arbitration, if the consent of one party is obtained by fraud or force, it will not be enforced. Also, if the decision of the arbitrator is patently unfair, it will not be enforced. This is a difficult standard to meet. The fact that the arbitrator made a decision that the court would not have made is not, by itself, a basis to overturn the decision.A court might also overturn an arbitrator’s decision if it decided issues that were not within the scope of the arbitration agreement.
Nowadays, computers and internet are being used in the techniques of ADR. This helps in faster resolution. It also speeds up the conciliation process. Despite advantages, it has many disadvantages.
Problems of ADR in Cyberspace:
Compliance with Due Process
The attributes most commonly associated with ADR and with ADR in Cyberspace in particular are: simple, cheap and fast. However, there is a ramification to the simplicity: Compliance with basic due process requirements. While ADR is not technically bound to follow due porcess requirements, an appearance of fairness is essential for a dispute resolution mechanism to function effectively. Only compliance with basic due-process requirements can give ADR in Cyberspace the trust it needs to function effectively for a wide range of disputes.
Difficulties in Enforcement
Due to the borderless nature of Cyberspace, ADR in Cyberspace faces a variety of enforcement issues in both enforcing the agreement to conduct an ADR proceeding and enforcement of the actual award.
- Enforcement of ADR Agreements
The first hurdle to overcome in order to enforce an ADR proceeding is to enforce the very agreement that includes the ADR provision.
Among the most recent developments in law is not only the law of Cyberspace, but also consumer protection laws. These are a serious hindrance for ADR, especially in e-commerce cases, because they set up strict legal regimes that need to be followed in a dispute with a customer. In order to protect the customer from the superior bargaining power of the merchant, many countries have laws that prohibit abridging the customers right to resort to a court to resolve the dispute.
- Additional costs
Even if the agreement is binding and the award can be enforced, such enforcement might still be impracticable. First, the other party may be in a distant country, or may not be located at all.
Secondly, if the party does not comply, suit has to be brought, possibly in a distant country. This would eliminate all the benefits derived from the ADR in the first place and effectively render it useless. Unless parties can be sure that awards can be enforced easily and without further costs, for example by directly granting the award from a pre-established fund or escrow account, ADR in Cyberspace may not earn the confidence of users.
One of the often overlooked flipsides of cheap dispute resolution is funding. If ADR is to be viable for consumers and small claims, it has to be cheap. On the other hand, significant resources have to be used to build the online systems as well as paying staff and unbiased arbitrators.
The funding issue may be one reason why many of the current methods of ADR in Cyberspace are either government mandated (like chargebacks) or connected to a major company, like the E-bay system. Independent systems like the WIPO have to charge fees. While these fees are small for the disputes that are currently handled, like IP and domain name disputes, they would scarcely be viable for consumer disputes.
- Security of Communications
The security of communications issue is a big concern in Cyberspace. Even though new encryption technologies are constantly invented, every encryption can eventually be broken. The internet poses a lot more threats to confidential communication than a face to face communication in an office.
A related problem is Authenticity: current e-mail and other communication technologies lack a safe method of authenticating the sender of the message on the one hand, and proving receipt by the recipient on the other.
Without a safe authentication method, it would be possible for a third party to intervene and misrepresent one of the parties. This is especially true where the system allows the parties to access documents electronically, which included the possibility that third parties might gain access.
Due to the high costs of litigation, alternatives have arisen to provide a means to solving legal disputes. Some disadvantages of the types of ADR are discussed below:
Arbitration is basically a mini-trial with one or more arbitrators hearing the case and issuing their decision. The disadvantages of arbitration are the potential for a partial arbitrator or panel of arbitrators (arbitrators are often chosen by each party); little explanation is usually given for the basis of a decision; and when arbitration is binding (it often is), there is little recourse for the losing party.
Mediation involves an impartial mediator facilitating discussions between the parties by using techniques that encourage dialogue that would not otherwise take place. Disadvantages of mediation are that it is usually binding on the parties, so a party is in trouble if they later change their mind later on. Another disadvantage is that both sides must be willing to discuss the disagreement and cooperate with the process. Unlike litigation, a party in mediation can suddenly decide to leave. Mediation’s other disadvantage is that it lacks procedural rules that protect the parties. For example, there is no formal discovery process in mediation. This means that it’s easier for one side to use secrets to its advantage.
A quick, inexpensive and binding resolution is almost always the desired way to settle a dispute. The way to achieve this is by negotiation. The problem is that negotiation is far from guaranteed to succeed before it is necessary to resort to some other more formal and structured method of dispute resolution. This may take the form of mediation.
The conciliation process can be an invaluable tool to reduce intractable conflict in cases where obstacles prevent out of court settlements and cost-effective resolutions. Its cons are:
-The process is not legally binding
-No decision is guaranteed at the end
-The process could be considered too informal so parties may not take it seriously
-No legal aid.
Hence, summarizing the topic, the main flaws in ADR techniques are:
- It promotes an uneven playing field
It is believed that the “take it or leave it” principle of alternative dispute resolution clauses would work in favor of the richer or more influential party over the party with less power and shallower pockets.
- It lacks transparency
The fact that hearings in this legal procedure are generally held in private, instead of being held in an open courtroom, and decisions are mostly not accessible to the public. While this is considered as a benefit by some people, this lack of transparency can also make the procedure more biased or tainted, which can become a big problem as decisions would be so infrequently put under review by the court.
- It comes with questionable objectivity
In alternative dispute resolution, choosing an arbitrator would not be objective, especially when the one who makes the decision is chosen by an agency from a pool list where individuals who have become favorites might get assigned to cases more often. Aside from this, many of the national alternative dispute resolution groups market their services actively to organizations and businesses that sell goods or issue credit cards to consumers, which creates additional questions on neutrality. After all, arbitrators, who are chosen by a party within an industrial niche, might be less objective and would be biased to the appointing group.
Despite, these flaws, Alternative dispute resolution (ADR) gives parties in dispute the opportunity to work through disputed issues with the help of a neutral third party. It is generally faster and less expensive than going to court.