Project managment

Alternative dispute resolution

The time consuming and sometimes expensive traditional methods of resolution of disputes by reference to the courts or arbitration led to the adoption of processes known as alternative dispute resolution (ADR). These include direct discussion between executives of the parties; obtaining the advice of independent experts; or using a conciliator trying to find common ground, or of a mediator looking for an agreed solution. The ICE conditions permit either party to refer a dispute to conciliation procedure, provided the other has not already elected to go to arbitration. The difference between arbitration and conciliation needs to be appreciated. With arbitration each party states its case and is subject to cross-examination by the other party. The arbitrator’s decision is based only on evidence submitted to him, although of course he can put queries to either party. But in a conciliation procedure the conciliator, often a professional engineer can investigate, and call for information on all matters he considers relevant
to the dispute, and may interview the parties separately. This gives him a good chance of discovering the root cause of a dispute, enabling him to find a solution both parties can accept.
Of course for any method of conciliation or mediation to be successful, there must be a willingness in both parties to try to find a solution and the introduction of an outside independent party assists this process. Such methods of resolving problems are attractive due to reduced costs in employing lawyers and experts as well as in staff costs and in tying up senior management if they pursue arbitration or court action.
Many standard forms of contract refer to ADR methods and encourage the parties to try to settle disputes by such means. The introduction of provisions for adjudication into UK contracts has opened up the opportunities for early resolution of problems but there is still considerable interest in conciliation and mediation and the courts have encouraged parties to try such methods before commencing court actions. There is considerable debate concerning the relative merits of conciliation and adjudication. Conciliation proceedings are confidential, and the conciliator’s recommendations cannot be quoted by either party in any subsequent arbitration. This aids reaching agreement as the disputants can state their views to the conciliator without prejudice. Adjudication is more formal. It is not a method of reaching agreement between the parties but a decision as to what the contract provides with respect to the matter in dispute. Any submissions to the adjudicator can be referred to in a subsequent arbitration, and the adjudicator may decide that he needs to employ specialist advice on technical or legal matters. Under adjudication the parties  may feel it necessary to employ legal advice in presenting submissions and thus increase their potential costs.

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