Alternative Dispute Resolution ("ADR")
There are various ways a dispute can be resolved using ADR thus avoiding going to a Court which may save both time and costs. There are various forms of ADR which include the following.
Mediation
Mediation is a form of ADR whereby parties consider the issues in dispute and work towards achieving a settlement with an independent third party, the mediator. The mediator will encourage parties to settle but has no power to order a settlement. The Court encourages mediation to such an extent that a party who unreasonably refuses to mediate a claim may be penalised in terms of recovery of costs of litigation.
Arbitration
Arbitration is used in specific disputes such as construction disputes. The arbitrator is usually an expert in which the dispute relates and would consider both the factual and legal issues of the case. Many contracts have specific clauses requiring parties to use arbitration to resolve any dispute. Unlike mediation, the arbitrator's decision is final and binding on the parties.
Negotiation
Negotiation is one of the most cost effective and flexible forms of ADR. A third party is not needed to negotiate settlement unlike with mediation and arbitration. Offers of settlement are made on a "without prejudice" basis so that parties' rights will not be affected if a matter cannot be settled.
