Alternative Dispute Resolution | ADR Method

Alternative Dispute Resolution | Dispute Resolution Method | ADR Method

Alternative dispute resolution or ADR Method includes non-adversarial and adversarial dispute resolution methods.

Generally construction projects are with  high difficulty, complex and uncertainty, dispute are commonly occurred in the project between the stakeholders, parties.

Therefore, dispute resolution method is essentially required to settle the dispute. At the inception stage of a project, project related contract document should be created with the dispute resolution method with the related contract forms.

Progressive dispute resolutions tend to minimize uncertainty and improve working relationships. Ultimately, it leads towards success of the project. Resolution is commonly divided into Litigation and Alternative Dispute Resolution (ADR). ADR defines the procedures of dispute settlement other than by litigation.

Alternative Dispute Resolution & Dispute Resolution in Construction

Alternative Dispute Resolution | ADR Method

This method is mainly focusing on dispute resolved with no intention of finding for court's support. Therefore, it is an alternative to the system of court. It is needed for each and every dispute to be resolved in an effective manner. The alternative dispute resolution (ADR) method includes non-adversarial and adversarial dispute resolution methods by having more advantages than litigation, which mentioned below,

Non - Adversarial Dispute Resolution Methods :- Negotiation, Mediation and Conciliation
Adversarial Dispute Resolution Methods :- Arbitration and Adjudication

Non - Adversarial Dispute Resolution Methods

Negotiation

It is an informal method for resolving dispute. Participants in this negotiation process are the parties in the contract and their nominated negotiators. Once parties try to resolve a dispute by negotiation, it is not sure that the procedure will affect in a resolution. The negotiators and their parties should deal face to face with each other. In a successful negotiation, the negotiators and their parties reach a resolution of the dispute, according to the parties benefits. The advantage and disadvantages of negotiation are given below,

Alternative dispute resolution

Advantage and disadvantage of negotiation

Advantages of Negotiation

• Easy and fast settlement
• No involvement of third party
• More confidential, inexpensive
• High degree of party control
• Voluntary process

Disadvantages of Negotiation

• Negotiators should be experienced
• Can be used as stalling tactic
• Requires Competence
• No guarantee for trustworthiness of any parties
• None-binding

Mediation

In this mediation process, the parties who involved in the contract select an independent third party known as mediator, to aid them to to come to a settlement of the dispute. As the mediator shouldn't represent the favor of either party. The mediator act as facilitator, who supports the parties find out the strengths and weaknesses of their cases and support them to frame and transmit settlement offers.When the disputants fail in agreeable settlement, the mediator will give non-binding recommendations. The advantage and disadvantages of mediation are given below,

Advantages of Mediation

• Confidential, cost effective
• Participation is typically voluntary
• Speedy settlement
• using as dispute avoidance mechanism

Disadvantages of Mediation

• Non-binding
• Expenses to third party
• No guarantee that settlement will be reached
• Strong-willed mediator can exercise much control

Conciliation

It is an informal method, which is similar to mediation, and it is accompanied with designated a neutral third party by contract parties to dispute known as conciliator. But conciliator has active participation in the discussion process between contract parties, giving views on the cases put ahead appropriately and there will be no private meetings are conducted between individual parties and conciliator regarding to dispute cases. The advantage and disadvantages of conciliation are given below,

Advantage of Conciliation

• Confidential, cost effective
• Advisory aspect by third party
• Speedy settlement, Voluntary
• Using as dispute avoidance mechanism

Disadvantages of Conciliation

• Non-binding
• Expenses to third party
• No guarantee that settlement will be reached
• Strong-willed mediator can exercise much control

Adversarial Dispute Resolution Methods

Arbitration

It is a formal method, it is the process where the parties brings up disputes arising in the progression of a contract to a nominated third party (known as Arbitrator) to be resolved. Where reference to arbitration is in writing, the process is run by the several Arbitration Acts. The Acts need Arbitration to be supported in a legal manner, and at the decision of a hearing the Arbitration must deliver reasons for any award prepared. The conclusion of the Arbitrator in relation to conclusions of fact is decisive; there is no way to appeal. On the other hand, appeals can be through the courts on points of law, however, only with the approval of the court hearing the appeal. The advantage and disadvantages of arbitration are given below,

Advantage of Arbitration

• Enforceable under foreign courts
• Privacy, legally binding
• Quick, Technically capable

Disadvantages of Arbitration

• Takes more time and more expensive compared to other alternative dispute resolution methods
• Power of third party
• Involuntary

Adjudication

It is most successful alternative dispute resolution method. It is a form of time-limited fast-track arbitration and legal process that targets to offer a fast dispute resolution with the participation of the agreed neutral third party (known as Adjudicator) who will offer chances to obtain wide-ranging information and to participate in group discussions and creates a temporarily binding decision for disputes related to the contract. Any party in construction contract has right to have a dispute resolution decided by adjudicator. The adjudicator is a subject matter expert and may be single or panel and considers the opinions of both parties and inspects facts to make a decision. It is established to allow disputes to be resolved on an interim basis more quickly and more cost effectively. The advantage and disadvantages of adjudication are given below,

Alternative dispute resolution

Advantage of Adjudication

• Privacy
• Faster than arbitration
• Binding decision
• Decision can be used in consequent proceeding

Disadvantages of Adjudication

• More Expensive
• Award is provisional
• Power of third party
• Involuntary

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alternative dispute resolution,
adjudication
negotiation

advantage and disadvantage of negotiation

dispute resolution method

adr method
dispute settlement

alternative dispute resolution