Research Paper On Adr.docx

ALTERNATIVE DISPUTE RESOLUTION TECHNIQUES “A TOOL FOR SPEEDY TRIAL”

Author: Mansi Matta & Kriti Bahure

E-mail: [email protected] And [email protected]

Contact: 9812667244 & 8619725402

College: Jaipur National University

Postal Address: Plot no. 8, sector 2, Surya Dev Marg, Malviya Nagar

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ABSTRACT Alternative Dispute Resolution (ADR) is the name given to the method where parties in a dispute come to a compromise or settle their dispute without going to court. The main reason people use ADR is to save the expenses of using the courts and solicitors. There are four main forms of Alternative Dispute Resolution i.e., Negotiation, Conciliation, Arbitration, Mediation, settling dispute by means other than litigation, such as arbitration and mediation.” Average civil cases in India take 4 to 5 years with Rs.518 per hearing. 0.4% of the Indian GDP is lost in litigation. Average mediation takes 126 minutes in Bangalore and when there comes a very complicated case it takes up to 3 months. The purpose of this paper is to discuss about Alternative Dispute Resolution (ADR) and why is it chosen to resolve disputes, further to discuss the benefits to both parties over litigation process. Also, we have discussed over the effectiveness of Mediation even in case where agreements are not enforceable by law. Here we have also tried to put discussions and justification over ADR as a forced compromise or a suggested resolution. Increasingly, prior to litigation, parties are involved in some form of ADR; however, has the growing dependency on ADR actually resulted in greater access to justice or is it a false economy? ADR can, notoriously be extremely expensive with ADR ‘specialists’ being employed to iron out a resolution to a dispute. Moreover, in contractual contracts the inclusion of express arbitration clauses has resulted in the legally enforceable requirement to participate in a form of ADR which can often be just as expensive (if not more so) as litigation itself. The dissertation looks at whether the various forms of ADR can actually deliver justice, and whether such justice is bargain as was once espoused to be. 2

INTRODUCTION In our fast developing society multiplicity of human needs results in conflict of interests which is further compounded due to the lack of discipline in litigation, due to this the judicial mechanism, finds it extremely difficult to cope up with its enormous caseload. Litigation particularly civil litigation in India is notoriously known for pendency of cases. Government of India Statistics indicates that a total of 23.9 million cases are pending in various courts of India1. Majority of Indian Courts are flooded by adjournments, revisions, appeals, and cross appeals; on an average a civil case takes anything from about 5 to 8 years for its final disposal & causes are not wanting when cases have lingered in courts for 15 to 20 years. The workload of Indian Judiciary increased by leaps and bounds and has now reached a stage of unmanageable magnitude, which has in fact led to a large backlog of cases2. In Surjit Singh’s Case3, the Supreme Court expressed its anguish for such long delay, as the particular case was lying pending in the civil court at Patiala with no sight of its finalization. It was in fact the common man’s disgust for traditional court litigation, which led to the evolution of alternate methods of dispute resolution. To quote, Mr. Justice V.R Krishna Iyer 4“Interminable, time consuming, complex and expensive court procedure impelled jurists to search

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http//Pib.nic.in/archive/ireling/Iyr2002/rjan 2002/r070/20022 html Arbitration And Alternate Dispute Resolution, Dr. N.V. Paranjape ,Third Edition 3 Surjeet Singh & Others vs. Harbans Singh & Others, AIR 1996 SC135 4 Judge Supreme Court of India 2

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for an alternate forum less formal, more effective and speedy for resolution of dispute avoiding procedural clap trap led to the Arbitration act.” The Preamble to the constitution of India, as well as Directive Principals enumerated under Art -39(A) of Indian Constitution promise to secure socio, economic, political justice and equality of status and opportunity to all citizens.

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What is ADR (Alternative Dispute Resolution) Alternative Dispute Resolution (ADR) is the name given to the process where parties in a dispute come to a compromise or settle their dispute without going to court. The main reason people use ADR is to save the expense of using the courts and solicitors. Alternative dispute resolution refers to any method for solving disputes other than by litigation. It is a constrictive dispute resolution method to the extent that a decision by such a method cannot be overruled by a public court of law. A public court of law cannot also give awards different from the ones issues by the method. The two most common used methods of alternative dispute resolution are arbitration and mediation. These methods mainly include evaluation of a case that is done on neutral basis, negotiations, conciliation, mediation and finally arbitration. Alternative dispute resolution methods are becoming preferable due to the need to move away from crowded courtrooms, increasing litigation costs, and the delays experienced in courts before judgment is delivered. These reasons have compelled many people across the states to favor alternative arbitration programs. Some of these programs are voluntary while others are mandatory. There are four main forms of Alternative Dispute Resolution i.e., Negotiation, Mediation, Conciliation and Arbitration:  Negotiation- Negotiation is the simplest form of ADR. Where two people have a dispute they can negotiate a solution themselves. The advantages to the parties involved are that it is completely private and it’s fast and cheap.  Conciliation- Conciliation is where a neutral third party helps the parties to resolve their dispute; however, the conciliator plays a more active role in the 5

process. He will be expected to suggest ways in which a compromise could be reached. Conciliation is not legally binding on the parties. The Advisory, Conciliation and Arbitration Service (ACAS) are used by many employers and Trade Unions to settle disputes before (and sometimes during) industrial action takes place.  Arbitration- Arbitration is the most formal of the methods used to settle disputes without using the courts. Arbitration is where the parties with a disagreement pass their dispute to a third party, who will make a judgment on their behalf. This judgment will then be legally binding on the parties. The relevant law on arbitration can be found in the Arbitration Act 1996. The agreement to go to arbitration can be made by the parties at any time. It can be written into a business contract by what is called a Scott v Avery clause or the parties may just agree on arbitration when a dispute arises. The parties can agree the number of arbitrators who will hear their dispute. It could be three, two or just one person. The parties will normally appoint someone who is an expert in their particular area of business. There is also the Institute of Arbitrators who will provide trained arbitrators to parties who wish to settle a dispute. The actual procedure to be followed in any arbitration hearing is left to the parties to decide. Therefore, arbitration hearings can take many forms. The parties can decide on a paper arbitration, which means the parties submit everything to the arbitrator in writing, which will then read everything and make a decision. However the parties can also have a hearing at which they appear and give evidence and witnesses may be called.

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 Mediation- Mediation is where a neutral person the mediator helps the parties to reach a compromise. The job of the mediator is to consult with each party and see how much common ground there is between them. She/he should act as a facilitator, taking offers between the parties. The mediator doesn’t offer an opinion. Mediation is most suitable where there is some chance that the parties will co-operate. Mediation is not legally binding on the parties. There are a number of organizations that offer mediation services. One of the main ones is the Centre for Dispute Resolution; many companies use their mediation services to save money in legal fees. The only disadvantage of using mediation to settle a dispute is there is no guarantee that a settlement will be reached. This means that you still have to use the courts, so in effect failure at the mediation stage can result in extra delays and extra costs. However, the Centre for Dispute Resolution report that around 80% of the disputes they deal with are settled without the need for any court action. Mediation can be effective even though agreements cannot be enforced: An essential element of a successful mediation is confidentiality. Participants to mediation must be able to rely on the confidentiality of the process if they are going to be candid with the mediator about their settlement positions, pressure points, litigation strategy and other sensitive issues. This principle is reflected in the Uniform Mediation Act, finalized in 2003 and adopted by 11 states to date, including Washington, Idaho, Utah, South Dakota, Nebraska, Iowa, Illinois, Ohio, New Jersey, Vermont and Hawaii. According to the Act, “this frank exchange can be achieved only if the participants know that what is said in the mediation will not

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be used to their detriment through later court proceedings and adjudicatory processes.” Most ethics guidelines for mediators and some state statutes require that anything said, any writing or any admission made during mediation is to be kept confidential, and that would include the terms of the settlement. Standard V of the ABA Model Standards of Conduct for Mediators (Model Standards), adopted in 2005, directs that a mediator must “maintain the confidentiality of all information obtained by the mediator in mediation, unless otherwise agreed to by the parties or required by applicable law.” JAMS Mediators Ethics Guidelines recognize that “it is crucial that the mediator and all parties have a clear understanding as to confidentiality before the mediation begins. A mediator should not disclose confidential information without permission of all parties or unless required by law, court rule or other legal authority.” What happens, however, if one party reneges on a settlement agreement and the other party wants to go to court to enforce it? Or if the parties agree on basic terms of the deal, with details to be worked out later, and discussions break down? “Settler’s remorse” can set in the day after a particularly emotional or contentious mediation session, leading to claims of coercion or fraud. Can the parties or their lawyers introduce evidence to support the fact that an agreement was in fact reached? Can a mediator be compelled to testify about the terms of a settlement agreement? There is a clear tension between preservation of confidentiality on the one hand and the need on the other hand to introduce some facts about the mediation to enforcement the agreement. The Uniform Mediation Act attempts to reconcile this by not only providing for confidentiality, but also permitting a written agreement 8

signed by all parties to be admitted in a later court proceeding. Some states, like California, have statutes that provide that if a settlement agreement is signed by the parties during the mediation, it can be admitted in a later court proceeding if the agreement itself provides that it is admissible and that it is enforceable and binding and all parties agree to its disclosure. The agreement might also be introduced if it is needed to show fraud, duress or illegality. The Model Standards permit a mediator to “report, if required, whether parties appeared at a scheduled mediation and whether the parties reached resolution.” In a case that received widespread attention a few years ago, the 9 th Circuit Court of Appeals affirmed a trial court’s enforcement of a mediated settlement agreement between Facebook, Inc. and Pacific Northwest Software, Inc. The facts of the case were generally depicted in the movie The Social Network and centered on claims by Cameron and Tyler Winklevoss that Facebook creator Mark Zuckerberg stole their idea for the social media site. A countersuit was filed, the case proceeded to mediation and a settlement was reached. The deal was memorialized in a short written agreement. Later, the Winklevosses sought to overturn the settlement agreement, claiming fraud, but the court upheld the settlement based on the written agreement. The 9th Circuit’s unanimous decision was grounded in the fact that the parties had signed a mediation agreement containing a confidentiality provision that excluded any statement made during the mediation from being relied upon or introduced as evidence in any later arbitral or court proceeding. Mediators take their confidentiality obligations seriously, and parties who have invested time and energy in protracted settlement negotiations have a vested interest in ensuring that agreements reached at mediation are enforceable. At the close of mediation, counsel and their clients should, if at all possible, create and

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sign a written agreement addressing all essential terms. This will not only reduce the motivation to delve into confidential mediation communications, but will also provide a measure of finality. This is, after all, what most parties seek in mediation. ADR: A Forced Compromise or a Suggested Resolution: ADR, as a whole, is overwhelmingly private in nature: “The essence of the ADR process is that people and entities can set up private rules, procedures and conditions for the purpose of resolving any existing or future dispute between them without having to file a lawsuit and go to a public court.” 5 Arbitration, for example, “was not conceived of as a judicial trial. It is privatized justice. Moreover, the determination is not intended to serve the public interest, but only that of the parties who have paid for the arbitration.”6At least court-annexed arbitration yields results that are open to the public, unless they are sealed.7Mediation, on the other hand, is much less public than court-annexed arbitration.8 The fruits of mediation are the result of private meetings, and in many jurisdictions, the law requires that what transpired during the mediation be kept confidential.9 Furthermore, since mediation today dominates the “‘multi-door courthouse.”10 ADR, as a whole, is a convincingly privatized pursuit of justice. This, of course, is exactly what ADR was meant to be. A proponent of ADR noted that 5

Arthur Mazirow, Alternative Dispute Resolution in Real Estate Transactions, in 460 UNDERSTANDING THE SOPHISTICATED REAL ESTATE PRACTICE 857, 865 (2000) (emphasis added). 6 Carbonneau, supra note 6, at 1958. 7 Hensler, supra note 1, at 187. 8 Id. 9 Id. (“Mediation programs yield outcomes that are private settlements, reached in private meetings. In many jurisdictions, the parties, lawyers, and mediators are bound by law to keep whatever transpired during the mediation confidential.”). 10 Id

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“the whole movement of ADR is really the effort of the client making the decision to stay out of the court system.”11By staying out of the court system, “the press is not there, the public is not there.”12 Adjudication, on the other hand, is quintessentially public. Owen M. Fiss stated the difference between ADR and adjudication by saying: Adjudication uses public resources, and employs not strangers chosen by the parties but public officials chosen by a process in which the public participates. These officials, like members of the legislative and executive branches, possess a power that has been defined and conferred by public law, not by private agreement. Their job is not to maximize the ends of private parties, nor simply to secure the peace, but to explicate and give force to the values embodied in authoritative texts such as the Constitution and statutes: to interpret those values and to bring reality into accord with them. This duty is not discharged when the parties settle.13 Adjudication is not a private endeavor. It is public, 14and this “should be a source of pride rather than shame.”15 As a public enterprise, adjudication makes sure that judgment does not just “maximize the ends of private parties, nor simply secure the peace,” but upholds the freedoms and rights established in the Constitution.16Nevertheless, people support ADR, and they do so because they “see adjudication in essentially private terms.”17 According to them, the purpose of adjudication is to solve disputes, and ADR serves this purpose well.18 The overcrowded dockets of America’s courts are simply evidence of “the needlessly combative and quarrelsome character of Americans,”19 to which ADR 11

Fisher, supra note 17 (internal quotation marks omitted). . Id. (internal quotation marks omitted). 13 Owen M. Fiss, Against Settlement, 93 YALE L.J. 1073, 1085 (1984) 14 . Id 15 . Id. at 1089 16 Id. at 1085. 17 . Id. at 1089 18 Id. at 1085 19 Id. at 1089 12

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provides the welcomed elixir.20 Despite the support for ADR,21 the differences between the private nature of ADR and the public nature of adjudication cannot be ignored,22 and neither can the consequences. Commenting on the consequences of the privatization of justice, Professor Carrie Menkel-Meadow wrote the following: As we move to private systems of informal and private decision making some have questioned whether settlements are entered into coercively and secretly without the protections of the rule of law, public accountability for decision-making and equalization of economic and psychological or social power imbalances. Some worry that there will be no way to monitor competence or quality and our legal system will not only fail to produce publicly declared precedents, but will produce “bad” private justice.23 Thus, while some believe that ADR “achieves exactly the same purpose as judgment—peace between the parties—but at considerably less expense to society,”24 it is clear that ADR’s less expense to society approach entails much more than just time and cost calculations. Can ADR Deliver Justice: Increasingly, prior to litigation, parties are involved in some form of ADR; However, There has been question in mind of people whether the growing dependency on ADR actually resulted in greater access to justice or is it a false economy? ADR can, notoriously, be extremely expensive with ADR 'specialists' being employed to iron out a resolution to a dispute. Moreover, in contractual

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See Carbonneau, supra note 6, at 1960. See, e.g., Todd B. Carver, ADR—A Competitive Imperative for Business, DISP. RESOL. J., Aug.–Oct. 2004, at 67, 68 (beseeching businesses to use ADR and commenting that “[n]o business can afford not to implement . . . a structured ADR program. ADR is truly a competitive imperative!”). 22 Maureen A. Weston, Reexamining Arbitral Immunity in an Age of Mandatory and Professional Arbitration, 88 MINN. L. REV. 449, 497 (2004) 23 . Carrie Menkel-Meadow, Ethics in Alternative Dispute Resolution: New Issues, No Answers from the Adversary Conception of Lawyers’ Responsibilities, 38 S. TEX. L. REV. 407, 418–19 (1997) (footnote omitted). 24 Fiss, supra note 209, at 1085. 21

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contracts the inclusion of express arbitration clauses has resulted in the legally enforceable requirement to participate in a form of ADR which can often be just as expensive (if not more so) than litigation itself. There always a question arises whether the various form of ADR actual provide justice or Not. The major aim of the Alternative Dispute Resolution is to promote access to justice by helping to develop legal aid systems that are appropriate for the country concerned, strengthening the functioning of the justice system such that citizens can have rapid and uncomplicated access to solutions to their disagreements. The right of access to justice and the right to a fair trial are guaranteed under Article 6 of the European Convention on Human Rights. These rights are routinely hampered in many countries by the sheer pressure on underfunded systems of justice, even when other conditions are favorable. Effective access to justice is one of the fundamental conditions for the establishment of the rule of law. In the past, the right of access to judicial protection meant essentially and almost exclusively the aggrieved individual’s formal right to litigate or defend a claim, defined in strictly legal terms. A broader view of what is going on behind such claims, which characterizes ADR, opens new pathways to resolving disputes, relieving the overcrowding that makes court cases unnecessarily slow. In particular, ADR processes are of significant importance to justice systems when effective establishment of alternative means of dispute resolution can significantly reduce the number of minor disputes before the civil courts, helping to improve the availability of judges for cases which must be tried. Thus the various forms of ADR just focus only on one aim i.e. to provide justice to the parties who are at dispute. More broadly, the diffusion of ADR has become a significant factor in instilling confidence in the legal framework as a 13

whole, supporting and promoting the rule of law. A recent Directive of the European Parliament and the Council25 highlights the importance of facilitating access to Alternative Dispute Resolution (ADR) methods/procedures, promoting the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial procedures. Securing better access to justice via ADR, as well as through other methods, is now part of the established policy of the European Union. Thus, ADR can provide justice and to provide justice is the main motto of the ADR.

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2008/52/EC of 21st May 2008

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CONCLUSION The various techniques and the issues related to the ADR which are discussed above are the common issues arises in the mind of people while opting for the ADR to settle their disputes or to resolve their dispute without going to the litigation process. The major goal of ADR for the parties is to find the most effective way of resolving their dispute without resorting to litigation. The process has been criticized as a waste of time by some legal observers who believe that the same time could be spent pursuing the claims in civil court, where negotiation also plays a prominent role and litigants are protected by a panoply of formal rights, procedures, and rules. But many participants in unsuccessful ADR proceedings believe it is useful to determine that their disputes are not amenable to a negotiated settlement before commencing a lawsuit. Despite its success over the past three decades, ADR is not the appropriate choice for all disputants or all legal disputes. Many individuals and entities still resist ADR because it lacks the substantive, procedural, and evidentiary protections available in formal civil litigation. For example, parties to ADR typically waive their rights to object the evidence that might be deemed inadmissible under the rules of court. Hearsay evidence is a common example of evidence that is considered by the parties and intermediaries in ADR forums but that is generally excluded from civil trials. If a disputant believes that he or she would be sacrificing too many rights and protections by waiving the formalities of civil litigation, ADR will not be the appropriate method of dispute resolution.

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