Table of Contents
2.1. ADR in England and Wales
2.1.4. Ombudsman Schemes
2.2. ADR in Germany
2.2.1. Arbitral Procedure
2.2.2. Conciliation Procedure
2.3. ADR in Practice
“The spiralling costs of contentious litigation, and the delays, uncertainties and lasting acrimony which such litigation occasions, have however over the past 20 years led to the increasing recognition by the judiciary, legal advisers and the disputants themselves that contentious litigation itself should be recognised as the option of last resort […]”
Sir Gavin Lightman, Royal Courts of Justice, Strand, London, October 2001
The above quote addresses the problem of the expensive and long lasting process of litigation in courts, which has not only been the case in England and Wales but also in Germany.
In this paper different techniques for resolving disputes outside traditional court in both countries will be examined.
As a solution for the named problem Alternative Dispute Resolution (“ADR”) made its way into being an option for solving disputes. By definition “ADR is a form of facilitated settlement that is confidential and without prejudice. Consequently the contents of the process need not usually be disclosed to a court. Because it is a form of settlement process the client is not at risk of being bound to an unfavourable outcome by a third party’s decision” (Caller, 2002, p. 1). It is then voluntary to enter into a binding agreement as long such is reached. If ADR fails, the case can still be carried to the court, normally without disclosing the reasons of failure. It should be stressed out that participants do not run the risk of losing control of the process, as it is without prejudice and non-binding – contrary to a judgment at trial (Caller, 2002, pp. 1-2).
It is important to keep in mind that ADR is only an option for solving disputes since “everyone has the right to recognition everywhere as a person before the law“ (Art. 6, UDHR).
Moreover ADR primarily concentrates on resolving personal disputes between parties where their claims are not massive or even perhaps try to resolve other issues involving family relationships, child custody and issues concerning land ownership (Keenan & Riches, 2007). This paper concentrates on the use of ADR in business.
Different methods of Alternative Dispute Resolution in England and Wales as well as in Germany will be delineated in the following.
2.1. ADR in England and Wales
In England and Wales, the role of the court is to encourage ADR in appropriate cases. This has become a law through the Woolf Reforms from which the Civil Procedure Rules came into effect in April 1999, stating litigation in court and tribunals should only be used as a last resort (Keenan & Riches, 2007, p. 67; Caller, 2002). Hence there have been cases in the Court of Appeal considering circumstances in which a court should impose cost sanctions against a successful litigant on the grounds of a refusal to take part in ADR (cp. Halsey v Milton Keynes General NHS Trust 2004; Steel v Joy 2004) (Keenan & Riches, 2007, p. 67).
Arbitration involves disclosing disputes to an independent arbitrator of choice - legally qualified or with special knowledge. The arbitrator does not have to be a single person, in fact sometimes arbitration panels are used. Cases are being discussed in private and at everyone’s convenience, although decisions made are binding to both sides, as they have to agree in the beginning. These decisions can then be enforced similar to judgement in court (Keenan & Riches, 2007, p. 68).
Usually only the arbitrator makes the decision without the parties involved. They will most likely come to their decision on the basis of written information rather than hearing the parties, which would, if it does take place, be less formal than in court (Advice Services Alliance, 2010a).
Furthermore, arbitration is common in resolving international disputes, employment rights disputes, consumer disputes, and disputes between major corporations. In these cases contracts often have clauses involved stating that arbitration will be used for solving disputes, whose outcomes are then binding to all signatories (Advice Services Alliance, 2010a).
Mediation is the most common method of resolving disputes out of court (Caller, 2002, p. 2) and basically means using a neutral third party (mediator) to help reaching a common position. It is particularly suitable for disputes concerning family, neighbourhood, work, and educational problems (Keenan & Riches, 2007, p. 68).
The mediator can be chosen freely on the behalf of the parties but it has to be noted that there are different approaches to the extent to which a mediator controls what happens:
- Facilitative mediation, in which the mediator concentrates on helping to reach an agreement, but without being in charge of the content.
- Evaluative mediation, in which the mediator is more concerned about the outcome of the dispute.
- Rights-based mediation, in which the mediator puts emphasis on an agreement that reflects statutory rights and legal entitlements.
(Advice Services Alliance, 2010b)
Before the actual mediation takes place, the parties sign a mediation agreement. The mediator organises a meeting in a neutral environment, listens to both sides separately and tries to find “potential areas of common ground” (Caller, 2002, p. 3). In between the meetings, the mediator will disclose progress and common ground to the other side(s), trying to lead towards successful settlement. Once a settlement has been achieved, the parties or their legal representative(s) will most likely sign an agreement that can afterwards be enforced in court (Caller, 2002, pp. 2-3; Advice Services Alliance, 2010b).