Advantages and Disadvantages of Alternative Dispute Resolution

Introduction:

This note discusses the advantages and disadvantages of alternative dispute resolution. In discussing the advantages of alternative dispute resolution, the disadvantages of litigation will be referenced. Similarly, in discussing the disadvantages of alternative dispute resolution, the advantages of litigation will be highlighted.

Advantages of Alternative Dispute Resolution:

1. Privacy:

A. Absence in Litigation:

Generally, court processes are public. In Order 1 Rule 2 (1) of the High Court (Civil Procedure) Rules, 2004 (C.I. 47) , for instance, it is provided that:

All proceedings of the Court including the announcement of its decision shall be held in public except as may be otherwise ordered by the Court in the interest of public morality, safety or public order.

This exposes sensitive information, such as business secrets, personality traits, and temperaments, to public scrutiny

B. Presence in ADR:

Various ADR processes, such as negotiation, mediation, and arbitration, are not held in public, and the parties enjoy their privacy. For instance, Section 34 (5) of the Alternative Dispute Resolution Act, 2010 (Act 798) provides that:

Except as otherwise agreed by the parties or provided by law, the arbitrator shall ensure the confidentiality of the arbitration.

Further, Section 34 (7) provides that “Unless otherwise agreed by the parties, the hearing of the arbitration proceeding shall be private.”

Also, in Section 78 of Act 798, it is provided that:

Except where a party gives information to the mediator subject to a condition of confidentiality, when the mediator receives factual information concerning the dispute from a party, the mediator may disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which that other party considers appropriate.

These provisions ensure that the discussions and outcome of mediation and arbitration remain private.

2. Speed:

A. Delays in Litigation:

Generally, the litigation process results in several delays. For instance, in commencing a civil action, the plaintiff causes the writ to be issued; the defendant has eight days to enter appearance, may have fourteen days to apply to the court to set aside the writ, among others. The trial process itself takes a long period to complete. For instance, the case of Adu v. Kyeremeh [1987-88] GLR 137 took twenty-six years to complete. Before delivering his judgement in that case, Adade JSC bemoaned that:

It is a serious indictment on the administration of justice in this country that a case of such simple dimensions should take as long as 26 years to see itself through the courts. It started in November 1960; it is now, in April 1987, being given hopefully its final farewell. 24 out of these 26 years were spent in the Court of Appeal alone. When in 1981, in Abba v. Nframa, Supreme Court, 30 November 1981, unreported , I came upon a similar situation, I whined. That case took twelve years. This one is worse.

Also, the case of Anane v. Agyemang and Others [2014] GHASC 126 (26 February 2014) travelled through the courts for forty years before reaching the Supreme Court. At the Supreme Court, Wood CJ similarly commented that:

Regrettably, it has taken forty long years, a whole generation, for this case to finally find its way into this court; the court of last appeal. We hope court business shall always be managed in ways that will not occasion a repeat of this parody of justice.

B. Speed in ADR:

Disputes that are resolved through ADR are often resolved faster. This is due to the following reasons:

1. In ADR processes, parties focus exclusively on resolving their dispute and not concerned with disputes involving others, unlike the courts that have the responsibility of resolving several disputes.
2. Absence of technicalities in ADR. Unlike in litigation, where parties must comply with the rules of court, rules governing admissibility of evidence, among others, ADR processes generally do not have such rules, making them faster.
3. Liberty of parties to schedule times. With ADR, the disputing parties are allowed to schedule sessions at their convenience, avoiding the long delays associated with court schedules and case backlogs.
4. Limited appeals. In litigation, some parties may want to exhaust all avenues for appeal before they can be satisfied that the dispute has been finally determined. Thus, a litigant in the High Court may appeal to the Court of Appeal, to the Supreme Court, and even invoke the review jurisdiction of the Supreme Court.

3. Preservation of Relationships:

A. Possibility of Destroying Relationships in Litigation:

Litigation is often said to be adversarial. By this, it is often meant that litigation is characterised by conflict, opposition, and a desire to win over an opponent. In all this, the parties may lose sight of the problem or dispute they seek to resolve and begin to see each other as enemies. For instance, parties who are made to look bad in the eyes of the public may want to retaliate, leading to a worsening of relationships.

B. Maintenance of Relationships in ADR:

In ADR, processes such as negotiation and mediation seek to create an environment for the parties to amicably resolve their disputes. Here, the focus is often on resolving the dispute in a manner acceptable to all parties; a win-win situation is often created.

4. Expenses Involved in Resolving the Dispute:

A. High Cost of Litigation:

Generally, litigation is expensive. Obtaining a writ costs money, and hiring a lawyer even costs more money. If the case takes longer to be fully settled, higher costs are incurred by the parties. In the course of the trial, the parties may also incur costs for failing to conform to the rules of civil procedure.

B. Comparative Low Cost in ADR:

In the ADR processes of negotiation, mediation, and arbitration, parties generally represent themselves because these ADR processes are not fraught with complex legal rules and procedures, and knowledge of substantive law is often not necessary.

Although arbitrator fees are borne by the parties, this is often cheaper than the amount they would have had to incur in hiring lawyers.

5. Other Advantages:

1. In ADR, parties can express a host of emotions such as hurt, disappointment, and anger, among others, and due consideration would be given to these emotions in arriving at a decision.
2. Parties retain control of the processes. Parties generally decide the time, place, and the third party that may help them resolve their dispute.
3. Decongest the courts. With the increasing adoption of ADR, the courts are increasingly left with cases that could not otherwise be solved through ADR.
4. Savings in public expenditure. The state currently spends a lot to maintain several courts due to the increasing number of cases. If more people adopt ADR, there will be no need for setting up and maintaining more courts.

Disadvantages of Alternative Dispute Resolution:

1. Legal Precedents:

First, the resolution of disputes in ADR is largely shaped by the interests of the parties, not based on substantive rights and liabilities. This prevents the establishment of binding precedents since interests often vary. For example, in an ADR process, a businessman may waive his right to damages because he is interested in protecting a business relationship. In another ADR process, the businessman may be interested in claiming damages because not doing so would adversely affect his business. The first case cannot establish the precedent that businessmen should waive damages because business relationships ought to be protected.

Second, owing to the privacy and confidentiality characteristics of ADR, its processes and outcomes are not reported and thus do not establish precedents.

2. Unequal Bargaining Power:

In some cases, one party may have more experience, resources, or influence, leading to an imbalanced negotiation or settlement that favours the stronger party.

3. Challenges in Enforcement:

While arbitration awards and mediation agreements can usually be enforced through the courts, some ADR outcomes, like that of a negotiation, may face challenges in enforcement if the parties do not honour them voluntarily.

4. Could Cause Delays if Unsuccessful:

Sometimes, parties may initially submit their dispute to ADR, but if the process fails, the dispute is likely to be referred to the courts. In such cases, the time spent on the unsuccessful ADR process could have been utilised to initiate court proceedings.

5. Need for Voluntary Submission to ADR:

Unlike litigation, where court proceedings are commenced by the issue of the writ and the consent of the defendant is not necessary for the commencement of proceedings, ADR typically requires mutual consent from the parties to proceed. Without such consent, a dispute cannot generally be resolved through ADR.

Conclusion

In conclusion, alternative dispute resolution (ADR) offers significant advantages, including privacy, speed, cost-effectiveness, preservation of relationships, and reduced public expenditure. These benefits make it an attractive option for resolving disputes, particularly in scenarios where maintaining confidentiality and fostering amicable relations are paramount. However, ADR is not without its limitations. The lack of binding legal precedents, potential for unequal bargaining power, enforcement challenges, and reliance on voluntary submission are notable drawbacks.