Friday, May 29, 2009

Allternative Dispute best thing after litigation?

Different type of dispute may require different type of avoidance, management and resolution method. The already existing alternative dispute avoidance and dispute resolution methods are dispute avoidance procedures such as ‘Dispute Review Boards’ (“DRBs”), ‘Dispute Adjudication Board (“DAB”) and ‘Dispute Resolution Adviser’ (“DRA”) and alternative dispute resolution methods include Expert Determination, Negotiation, Mediation and Arbitration.

In comparison of the DRBs, DAB and DRA to litigation, these disputes avoidance procedures are cheaper and cost lesser time than litigation. However, not all of the decisions from these methods are final and binding. DRBs only has a non-binding recommendation and methods such as DAB and DRA may produce a final and binding decision with room for it to be challenged through litigation or arbitration within a period specified. Never the less these methods are great only in trying to avoid from major disputes from taking place. They can be a good tool to avoid litigation proceedings but not as an alternative method to litigation.

As for dispute resolution through the method of expert determination, it is an appropriate method to be adopted when technical issue has arisen and requires an expert’s opinion. Usually it is not related to legal matters and litigation is not necessarily required. Moreover, the method can give a fast result, but the determination is not final and binding unless the parties have agreed to it. If the parties fail to reach an agreement, then they will have to seek resolution through arbitration or litigation.

A different approach to dispute resolution, yet have long been established in the business world, negotiation is a method where the parties communicate to seek resolution on the dispute matter. If the parties are open to compromise on the issues, it is a cost efficient method for clarification and resolving misunderstanding. The result from the negotiation is also easily enforceable and binding if the parties have made the agreement in a form of contract or deed. However since negotiation is about the power of persuasion, this method does have a weakness where the result of the negotiation result may be one-sided to the stronger party. If the weaker party feels that the result is unfair, they can choose to proceed with litigation (on the absence of mediation or arbitration provision in the existing contract).

Mediation is also a familiar method of alternative dispute resolution recognize in the industry. It is now a common method to be pursued prior to arbitration or litigation. Mediation is similar to arbitration where a neutral person is being elected as a regulator or facilitator in a proceeding to help the parties to achieve an agreement to a solution to the issue in dispute. Moreover alike to negotiation and expert determination, the result from mediation is only enforceable if a contract or deed has been made. Besides, if conducted well it will not jeopardize the working relationship between parties and even further create a better understanding between parties. However, since the objective of mediation is to reach settlement, it might take longer time and would increase the proceeding cost too. In this kind of situation, it is better for the parties to opt for arbitration or litigation.

Finally, among the most recognized method for alternative dispute resolution in the industry, arbitration is usually the next best method if the parties fail to seek resolution through mediation or negotiation. It is a dispute resolution method where a single or multiple independent arbitrator/s mutually elected by the parties in private proceedings. The arbitrator elected is usually an expert in the fields that is in dispute. With this, the arbitrator can make the best decision within his jurisdiction, especially if it is a technical dispute that the parties are facing. In these private proceedings, the parties are free to determine the scope, nature and rules. At a glance, it can be seen a less formal proceeding that can achieve the same result as litigation proceedings. Yet, arbitration method could be much faster than litigation and since it is faster, more cost can be saved too. Furthermore the arbitration award is final and binding and easily enforceable domestically and internationally. This would be a good alternative to litigation if the parties in disputes are in an international construction and trading contract.

From these comparisons, it can be distinguished that the most suitable method as an alternative to litigation is arbitration. Litigation is a rigid legal proceeding in court or tribunal with the most formal resolution method that is expensive and has potential for long delays, while arbitration is faster and cost efficient proceeding in a friendlier environment. Both proceedings can achieve a final and binding result, but arbitration might achieve a better result if the issue in dispute is a technical issue and not a legal issue.

--this is what I answered in one of my exam. i scored 15 of 25..not bad, but i know next time i can do better..correto mundo!