Adr Reviewer-Atty Higuit
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 1
INTERNATIONAL ALTERNATIVE DISPUTE RESOLUTION/ PEACEFUL SETTLEMENT OF INTERNATIONAL DISPUTE.........................16
A type of dispute resolution that seeks to limit the costs of litigation by using alternative, often out-of-court means, such as arbitration, conciliation and summary possession proceedings. Alternative dispute resolutionoptions are voluntary, and often involve a neutral third party to make decisions.2
1.2 BASIC PRINCIPLE OF ADR
Conflicts between public international law and national sovereignty..........................16
ADR is based on several key principles. First, consensual processes (participation, scope and structure) are more likely to result in outcomes satisfactory to the disputants than a solution imposed by a court. Inherent in this principle is the ability of the parties to structure a process that is tailored to the situation and to the dispute at hand. There is ample experience demonstrating that disputants are more likely to achieve outcomes that serve all disputants’ interests and purposes -- the “win/win” solution -- than solutions imposed by an outside decision maker.
The second key principle is the involvement of a third-party neutral whose presence can improve the dynamics of the dialogue needed to achieve a settlement and, in environmental disputes, knowledge and expertise to evaluate the merits and to help frame options for solution if so desired by the parties. The third party’s role is to assist in the process, not to dictate the outcome. This individual is neutral in the sense of having no stake in the outcome or in the parties. A third-party neutral has no authority except as granted under the order or agreement defining the ADR process.
One of the principal objectives of the ADR process is to help the parties communicate with each other civilly, by providing a clear statement of the interests driving the dispute and, most importantly, by truly listening to the other side of the dispute. Parties often lack a clear idea of what they are fighting for, much less a good idea of what needs are driving their opponents.
Finally, ADR processes generally are confidential except as otherwise agreed by the parties, with the exception of public policy disputes that often facilitate in full public view. Agreements to engage in most ADR processes typically have a confidentiality clause. Mediation conducted in Michigan court proceedings is expressly made confidential by MCR 2.411(C)(5). As of mid 2010, the confidentiality provisions under MCR 2.411 are being considered for revision. SCAO August 2010 Report on MCR 2.411.
When the ADR process is not ordered under MCR 2.411, the parties must provide for confidentiality by agreement. Where disputes
Convention on the Recognition and Enforcement of Foreign Arbitral Awards...35 DOMESTIC ARBITRATION..........................40 Judicial dispute resolution (JDR)..............126
1.1 BRIEF DESCRIPTION OF ADR
SYSTEM Alternative Dispute Resolution (ADR) also known as external dispute resolution in some countries, such as Australia 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. Despite historic resistance to ADR by many popular parties and their advocates, ADR has gained widespread acceptance among both the general public and the legal profession in recent years. In fact, some courts now require some parties to resort to ADR of some type, usually mediation, before permitting the parties' cases to be tried (indeed the European Mediation Directive (2008) expressly contemplates socalled "compulsory" mediation; attendance that is, not settlement at mediation). The rising popularity of ADR can be explained by the increasing caseload of traditional courts, the perception that ADR imposes fewer costs than litigation, a preference for confidentiality, and the desire of some parties to have greater control over the selection of the individual or individuals who will decide their dispute. Some of the senior judiciary in certain jurisdictions (of which England and Wales is one) are strongly in favor of the use of mediation to settle disputes.1
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 2 are mediated before or during civil litigation, MRE 408 and FRE 408 make settlement offers and conduct and statements made in settlement negotiations (i.e., during the ADR process), not admissible. These rules, however, do not require the exclusion of evidence otherwise discoverable merely because it is presented in the course of settlement discussions.
The Michigan mediation rule expressly provides that a mediator may not disclose anything that transpired during the mediation to the trial judge except the date of completion of the process, who participated in the mediation, whether settlement was reached and whether further ADR proceedings are contemplated. MCR 2.411(C)(3). Best practice in drafting the mediation agreement should provide the express requirement that the mediator make his or her report to the court in writing with copies to the parties, so that the parties can be assured this rule has been observed. Note that this rule does not permit the mediator to report to the trial court whether any party appeared to be acting in good faith. Likewise, communications made during ADR processes convened by a federal court are protected from disclosure, 28 USC 652(d), although the scope of the protection is not as broad as under the Michigan Court Rules. 3
In its August 2005 resolution (Resolution ALJ-185), the Commission announced five basic principles that are the foundation of the CPUC ADR program: VOLUNTARY The parties usually must agree to submit their dispute to mediation or early neutral evaluation. An ALJ, however, may require parties to attend facilitated workshops, settlement conferences, or meet with a neutral to explore the feasibility of mediation. TIMELINESS ADR should shorten, not prolong, proceedings. But even if a negotiated settlement takes longer, the result may be more beneficial to all.
Most ADR processes require confidentiality so that the parties' fundamental interests can be explored. COMMISSION APPROVAL The CPUC will expeditiously approve settlements that are legally sufficient.4
1.3 UNDERSTANDING DISPUTE RESOLUTION OPTIONS There are many ways to approach dispute resolution. The great majority of problems encountered by small business are resolved through simple discussion and common sense between the parties and do not escalate into a dispute. In virtually all instances, small businesses should at first attempt to resolve their disputes through direct discussion and negotiation. Disputes will occur, however, where there is a lack of communication, where there are unrealistic expectations or where there is a grievance that cannot be resolved through direct discussion. When a dispute occurs, each party has a choice about the dispute resolution method that they would like to pursue. Unfortunately, litigation is usually the norm and dispute resolution is often approached as a matter between lawyers and the Courts. There are, however, a variety of other approaches available which may save time and money and preserve business relationships. Dispute resolution options for small business range from negotiation-based methods, where the parties have full control over the outcome (generally known as 'alternative dispute resolution' - ADR), to adversarial methods where the parties have less control over the outcome (such as arbitration and litigation). Where a negotiated settlement is reached through ADR, the terms of the settlement, once agreed and signed by the parties, are legally binding and can be enforced if necessary. The chart below sets out some of the advantages and disadvantages of different approaches to dispute resolution.
GOOD FAITH Those who engage in ADR should do so in an attempt to reach agreement--not to delay or secure tactical advantage. CONFIDENTIALITY
Parties Control Outcome
→ Alternativ ← e Dispute Resolution (ADR)
Does Not Establish Legal Precedent
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 3 Efficient •
Maintains Business Relationshi ps
NonAdversarial , Informal Process
Appropriat e For Fraud Or Criminal Matters
Can Adversal Establish a Approache Legal s Precedent → ← Appropriat e Where One Party Has No Intention Of Complianc e
Not Open To Public Scrutiny
Not Appropriate For Fraud Or Criminal Behaviour
Parties Have Limited Control Over The Outcome
High Cost & Lengthy Process
May Destroy Business Relationship s
AN EXPLANATION OF ALTERNATIVE DISPUTE RESOLUTION METHODS ASSISTED NEGOTIATION • The parties engage a professional negotiator or 'go-between' to assist parties reach a desired result. It is usually informal and the negotiator can either be appointed by one party or both. In the latter situation he/she is a joint negotiator. This method is often helpful in smaller disputes where parties are still talking to one another and need help to break an impasse, and where they have identified all the issues to be negotiated. MEDIATION • Mediation is a process where an independent person is used to assist the parties in dispute to find a mutually acceptable solution. The mediator will systematically work through the issues, help identify alternatives, and facilitate final agreement. The process is nonadversarial and focuses on the parties' resolving the dispute themselves using the skills of a mediator. The key principle of mediation is that the parties work together to
arrive at an agreement that suits both. This is in contrast to litigation and arbitration where a judge or arbitrator imposes a decision which may be disappointing for one or both parties. A mediator is appointed by the parties to help establish effective communication and by doing so find a solution which satisfies both their needs and interests. The informal process is speedy and cost effective and caters for ongoing business relationships. INTERMEDIATION • Similar to Mediation in concept but more sophisticated. The neutral third party closely interacts with the parties in dispute to assess all relevant material, identify key issues, and most importantly, helps to design a process that will lead to resolution of the dispute. The process involves separate meetings with the parties at their offices to conduct extensive reality testing, and analysis of parties' legal, commercial and financial positions. The process utilises creative thinking techniques and is suitable for more complex, large or sensitive matters. FACILITATION • The parties appoint a neutral facilitator to manage the dispute resolution process, identify issues and apply specialist techniques to achieve the desired outcome. The facilitator assists by preparing an agenda, chairing meetings, distributing relevant information between the parties and steering them to reach agreed objectives. The process is less formal and more flexible than Mediation. It has wide application and is often used where there are several parties or groups involved with differing points of view, such as creditors or multi-party claimants, joint venture negotiations, and environmental and planning disputes. EXPERT DETERMINATION/RECOMMENDATION • The parties agree to an independent expert to provide a report on specific aspects of a dispute by examining relevant documentation and material. The expert is usually commissioned to report on technical matters such as standards, compliance, quality specifications, quantification of loss or similar issues. The expert may be asked to provide a recommendation or a determination on the matter depending on the circumstances. PARTNERING • Often used for long term contracts or in the building/construction industries and in joint venture type projects. A Partnering agreement or charter is based on the parties' need to act in good faith and with fair dealing to one another. The Partnering process focuses on the definition of mutual objectives, improved communication, the identification of likely problems and development of formal problem
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 4 solving and dispute resolution strategies. It is useful, for example, where there is a need to complete a technical or building project with a minimum of disruption and cost and within a tight time frame.
Flexibility of procedure - the process is determined and controlled by the parties the dispute
AN EXPLANATION OF ADVERSARIAL DISPUTE RESOLUTION METHODS
Less complexity ("less is more")
Parties choice of neutral third party (and therefore expertise in area of dispute) to direct negotiations/adjudicate
Likelihood and speed of settlements
Practical solutions tailored to parties’ interests and needs (not rights and wants,as they may perceive them)
Durability of agreements
The preservation of relationships; and the preservation of reputations.5
LITIGATION • Litigation is an adversarial legal process conducted in a Court of law, in accordance with strict procedures, where the parties present legal arguments and evidence to support their claims before a judge. The judge applies the relevant law to the evidence, resulting in a judgement in favour of one of the parties involved. ARBITRATION • Arbitration is an adversarial process, agreed by the parties in dispute, in which each party presents legal arguments and evidence, in accordance with formal procedures, to a mutually agreed arbitrator. The arbitrator makes a determination in favour of one of the parties. This determination is usually legally binding.
The international literature on ADR identifies five major outcomes from ADR. They are:
1.4 Advantages/Benefits and Disadvantages of Alternative Dispute Resolution The take-up of ADR depends on a combination of three critical factors. First, the extent to which disputants and their advisors are aware of ADR. Second, the adequacy of the supply of ADR services for those that would wish to take-up ADRservices. Third, the perceived advantages and disadvantages of ADR. This section is concerned primarily with the third of those factors. It notes, however, the low level of awareness of ADR among disputants, the critical and influential position of lawyers in determining whether disputants seek resolution through ADR, and comments on the extent to which the court system raises awareness about the potential for ADR as a dispute resolution pathway.
Benefits of ADR
ADR has been both; increasingly used alongside, and integrated formally, into legal systems internationally in order to capitalise on the typical advantages of ADR over litigation: •
Suitability for multi-party disputes
increased settlement improved satisfaction with the outcome or manner in which the dispute is resolved among disputants
reduced time in dispute
reduced costs in relating to the dispute resolution
increased compliance with agreed solutions.
Among stakeholders there is broad agreement that dispute resolution throughADR mechanisms can be beneficial. Nevertheless, there are some significant variations among stakeholders about the extent and nature of those benefits for disputants. ADR practitioners are most enthusiastic about the benefits of ADRtake-up. Lawyers and disputants tend to be more qualified with regard to the actual benefits associated with ADR. ADR Practitioners' View of ADR Benefits Participants in the ADR Practitioners Survey were convinced of the efficacyof ADR techniques in resolving disputes that were already or could be filed in the District or High Courts. Two thirds of the respondents (66 percent) reported that they believed that more that 80 percent of disputes could be resolved through ADR. Only 4 percent reported that they believed that 55 percent or fewer disputes were 5
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 5 amenable to effective resolution through ADR (Table 4.1).
Lawyers' Perceptions of Disputants' Reasons for ADR Take-up* (Lawyers Survey)
ADR Practitioners' Estimates of Disputes Effectively Settled by ADR(ADR Practitioners Survey n=139)*
Perceived Disputant Responses Reason Want to reduce costs 183 Want speedy resolution 159 Uncertainty of court outcome 142 Preservation of ongoing 86 relationship Desire for compromise 82 solution Desire for more control over 80 process and outcome Privacy and confidentiality 74 Directed by contract, statute or 61 existing agreement Desire for creative solution 48 Concerns about court 39 procedures 
Proportion of Disputes Settled by ADRPractitioners ADR Responses % 0-20 percent of disputes 0 0 21-30 percent of disputes 1