ADR

ADR Meaning

The objective of "alternative dispute resolution" (ADR) refers to the process of mediating a disagreement outside of the traditional judical adjudication with the aid of an independent dispute resolution entity. Going to court to resolve consumer issues is a more difficult, time-consuming, and costly option than using this alternative. There are many different forms of alternative dispute resolution, such as mediation and conciliation. The goals and purposes of the civil justice system cannot be accomplished in the most effective manner either by placing exclusive emphasis on well-organised and well-managed court processes or by placing exclusive emphasis on easily accessible alternative dispute resolution (ADR); rather, a balance of both is required. Finding the optimal point of equilibrium is the challenge here.

Disadvantages of ADR

The perceived disadvantages of ADR include:

Delay and cost increases

When a settlement cannot be reached and litigation is ultimately pursued, engaging in an ADR process can squander the parties' time and money. This must be weighed against the potential benefits of ADR that may arise even if a settlement is not reached, as well as the negative cost and case management consequences of unreasonable refusal to engage in ADR.

Exhibiting one's hand

Clients may dread that alternative dispute resolution carries the risk of revealing their "hand," or the strategy they will employ if the case does not resolve. For the majority of forms of ADR, however, anything said will be protected from future litigation.

Unenforceable outcomes

The parameters of a settlement reached via a non-binding ADR process are not enforceable. It is, however, always possible for the parties to formalise any agreement through a written and signed contract or, in some cases, a court order. In addition, certain forms of ADR can generate binding or interim-binding outcomes with limited rights of appeal, thereby providing the parties with greater certainty.

Unsuitable for certain disputes

In rare but significant instances, a dispute may not be suitable for ADR, such as when a precedent is needed or injunctive relief is necessary. In some instances, the costs of ADR will be exorbitant or disproportionate when compared to the costs of filing a claim. Rejecting the possibility of ADR and proceeding with litigation on the grounds that the process has no reasonable chance of success requires careful consideration; in the end, the court will determine what is reasonable.

Risk of a trial being delayed

In cases where the possibility of ADR is raised at a late stage of litigation, there is a risk that diverting the parties' attention to ADR will interfere with the court process and even cause the trial to be delayed. It may be possible to conduct both procedures concurrently, despite courts' reluctance to suggest ADR in situations where such a risk exists.

Limitation Period

In contrast to legal proceedings, the majority of forms of ADR do not "stop the clock" for the purposes of limitation; therefore, the parties must keep limitation in mind and consider the possibility of having to file protective legal proceedings whilst engaging in ADR.

Displaying signs of frailty

Parties to a dispute may fear that their willingness to participate in ADR will be interpreted as a sign of frailty or lack of confidence in their case. In the modern context, however, and given the prevalence of judicial encouragement of ADR in litigation, this is unlikely to be a significant disadvantage.

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