What is Alternative Dispute Resolution?
Alternative Dispute Resolution (commonly known as ADR) is a growing area within the justice system. Since the Woolf report of 1986, there has been an increased importance placed on the use of ADR in the UK, as it has been judged that it has the capacity to increase the level of access to the justice system amongst the general public.
Alternative Dispute Resolution is not one thing but many; the term refers to all of the ways in which civil disputes can be resolved without the necessity to go to court. ADR procedures make use of an independent third party who will mediate between the complainant and the respondent (that is, the party against whom the complaint is being made). It should be noted from the outset that ADR is not a suitable solution for criminal disputes; these will almost always require a full court hearing.
The nature of the complaint will determine the nature of the ADR procedure. The third party involved may well be an industry ombudsman or, in less serious cases (or, indeed, in the earlier stages of those cases in which the claim is for a higher sum), may be what is known as a ‘conciliator’. One of the great advantages of some forms of ADR is that the outcome of the procedure is legally binding upon the respondent but necessarily upon the complainant.
In ADR, as in most consumer dispute resolution, the first step will almost certainly be to complete the internal complaints procedure of the company in question. You may well find that the company will make you an acceptable offer as recompense for your complaint. If this is not the case, then you may well wish to investigate the different forms of ADR before considering court action. There are three main types of ADR procedure: conciliation, arbitration and mediation. These are each suitable for different circumstances.
Conciliation is a good first step in the ADR process. The third party involved, known as the conciliator, will generally be a member of the trade association of which the company in question is a member. ADR by conciliation is not legally binding upon the complainant; therefore, if you are still unhappy after the outcome of the conciliation process you need not accept the decision and can still take further action. Furthermore, conciliation is generally free to the consumer. As a result, this tends to be a good place to start.
The outcome of arbitration, on the other hand, is legally binding upon both the respondent and the complainant. If you read the small print of many contracts, you will find that many organisations now stipulate that a dispute between the company and a customer must be arbitrated. Legally, however, if you signed the contract before the beginning of the dispute, and the value of the claim is less than £5,000, this is not the case. The third party is likely to be a Chartered Arbitrator; this service will be charged for, but you may find that you are refunded the costs if your claim is successful.
Another potential alternative is mediation. Under this arrangement, an independent mediator will meet with the complainant and the company in question in order to ascertain the details of the case. They will then attempt to foster a deal that is mutually acceptable. Subsequently, both parties will meet with a view to codifying this into a written agreement; this will be legally binding (and you will therefore be unable to take further court action other than to enforce a payment plan) unless otherwise stipulated. It is important to remember that mediation can be expensive, but representation is sometimes available under the ‘legal aid’ system.
It should also be remembered that the use of an industry Ombudsman is a type of Alternative Dispute Resolution. The decision of the Ombudsman in question is not legally binding upon the claimant, and so you may also find that this is an effective route. This is particularly true for financial complaints, as is investigated in another section on this site.