CIVIL LITIGATION: NOTES ON ALTERNATIVE DISPUTE RESOLUTION

CIVIL LITIGATION TASKS WEEK 1

1.     A. Negotiation

This involves bargaining and conferring for the purpose of mutual agreement or to arrange by agreement. It may be for purposes of structuring or restructuring commercial agreement, resolving some disagreements, managing operational problems or for managing social relationships. Every alternative dispute resolution mechanism is an aspect of or involves aspects of negotiation.

There are usually four stages of the negotiation process and they are as follows:

 

The Preparation stage: The negotiator ought to have first hand knowledge of the personality and character of the other party and/or the organization he represents. He must know the walk away points of the opponents, determine the style and strategy of negotiation to adopt, the real interests of the parties and identify likely barriers that may stand in the way of the negotiation.

 

The Opening stage: This marks the formal commencement of the negotiation; each party is given the opportunity to state his own side of the story indicating his fears, grievances, desires and needs.

 

The Bargaining stage: Here, each party persuades the other to accept his position and all the issues raised are dealt with and agreed upon.

 

The Closing stage: Each party runs a summary of his/her understanding of the issues agreed upon and have same exchanged for necessary comments and further agreement, the parties then fine-tune the agreement and reduce into writing and then it is signed by the parties.

 

NB: Where the parties fail to reach an agreement in the bargaining stage and the deadlock is not properly handled, the negotiation is usually aborted.

 

Advantages

·      It is a win/win outcome where the negotiation is successful

·      It is voluntary for both parties

·      It is flexible i.e. the time, venue etc.

·      It is cost effective

·      It is a friendly way of settling disputes

·      It saves time

 

Disadvantages

·      A party that would ordinarily have lost if the matter were decided upon by a judge would unjustly benefit from the outcome of the negotiation

·      It is not favourable to lawyers because their services are usually not needed

·      It could lead to indecision as the parties always have the option of walking away

 

B. Mediation

 This is a process in which a neutral (impartial) third party called a mediator is invited to or intervenes to facilitate the resolution of a dispute by the agreement of the parties.

 

The five stages in the mediation process are as follows:

 

The Preparation stage: At this stage, the mediator is in possession of the statement of issues filed by the parties. However, the mediator must ensure that the parties agree to meditate and consider the mode of representation, whether they have experienced mediation before, the authority of the person appearing, whether there is a pending litigation, the arrangement of the sitting room and other preparatory considerations.

 

The Opening stage: This stage accommodates the introduction of the mediator as well as all the approved persons to be in attendance either as witnesses or advisers. The mediator here delivers the opening speech, which establishes the rules and procedure that would govern the process and also gains the confidence of the parties by assuring them of impartiality and neutrality in the process.

 

The Exploration stage:  This is the stage where the mediator begins to find out the real issues between the parties ,which may be different from what the parties presented in their statement of the dispute or what they even stated as their demands or grievances.

 

The Negotiation stage: This is the bargaining stage where any premature movement may truncate the process and no settlement may be reached with each party sticking to his position. It is at this stage that the real interests of the parties are identified and efforts are made to satisfy same.

 

The Conclusion stage: At this stage, it is clear what the areas of agreement between the parties are and it will be further confirmed or corrected by the mediator by reading it out to the parties. When this is done successfully, it is said that the parties have settled and this is confirmed by an agreement in writing, usually signed by the mediator to be drafted by the parties. The right of a party to walk out of mediation ends as soon as the settlement agreement is signed.

 

It is important to note that the mediator does not impose any judgement on the parties but rather by all acceptable means help them to reach an agreement. His work is majorly facilitator not adjudicator.

 

Advantages

·      It helps the disputants resolve or better manage disputes

·      It is almost impossible to reach a deadlock because of the involvement of the mediator

·      It could be a very fast means of resolving disputes

·      It is accessible because it can be set up at a very short notice and conducted almost anywhere

·      The voluntary nature of the process accounts for its success

·      It is confidential

 

Disadvantages

·      A party that would ordinarily have lost and borne the cost if adjudicated upon would benefit because it is a win/win outcome

·      An inexperienced mediator may make the case worse with no settlement to show for it

·      The mediator may be perceived as biased by either/ both of the parties thereby losing their trust and resulting in no settlement

·      The walk away option may lead the parties to remain indecisive.

·      The mediator may be impatient thereby resulting in an unsatisfactory settlement or no settlement at all as the case may be

 

C. Arbitration

This is simply a private and judicial interpretation of a dispute by an independent third party called an arbitrator subject to the agreement by both parties to be bound by the decision he gives. It shares some common features with litigation because of its adversarial nature. The number of arbitrators is usually decided by both parties. However, it is conventional to have one or three in order to avoid a tie.

Arbitration could be any of the following types:

·      Domestic Arbitration: where the parties are resident or carry on business in the same country and the contract [subject matter] is to be performed in the same country.

·       International Arbitration: between persons who have their place of businesses in different countries or where the subject matter of the arbitration agreement relates to more than one country or where the parties expressly agree that any dispute arising from the transaction between them shall be dealt with as an international arbitration.

·      Institutional Arbitration: where the parties usually state in their contract that in the event of a dispute, it shall be settled by arbitration to be carried out in accordance with the rules of a particular arbitration institution or agency such as International Chamber of Commerce (ICC).

·      Ad-hoc Arbitration: which is entered into by the parties after a dispute has arisen. The parties in this case usually set their own rules of procedure to fit the dispute between them.

It is important to note that every arbitration agreement must be in writing[1]. The applicable rules of procedure are those agreed to by the parties, but where the parties do not make such an agreement, the Arbitration and Conciliation Act would come into play. An arbitration process commences by filing of a notice of arbitration by the party initiating the proceeding (claimant) to the other party (respondent).

 

Advantages

·      An arbitrator works out a solution for the parties thereby eliminating indecision

·      It is a less formal setting to a court

·      It is voluntary as both parties agree inter alia on the arbitrator, the number and the rules to apply

·      It is confidential

·      It is flexible i.e. the venue, time, mode of dress

·      It is cheaper for the winner

·      Technical matters are better handled because it is a professional in the field of the dispute or a lawyer that arbitrates

·      Since the emergence of the 1958 New York Convention, arbitral awards are given more international recognition than court judgments especially in the United Kingdom.

 

Disadvantages

·      The parties do not determine the outcome

·      Parties cannot predict the outcome of an arbitration

·      It is a mirror of litigation

·      It is more expensive for the loser

·      It is not a win/win outcome for the parties

·      Where a party fails to enforce the decision, it can only be enforced by the court on application by the aggrieved party.

 

 

 

D. Conciliation[2]

This is a process of settling disputes in a friendly and non-antagonistic manner usually through an independent third party called the Conciliator. Conciliation and Mediation are similar; however unlike a mediator, a conciliator may give his own opinion to the parties, which could help them in their settlement. Conciliation, unlike private mediation is always provided for by law. An example of a legislation that provides for Conciliation is the Trade Disputes Act[3]. It is also noteworthy that conciliation processes are more interventionist than mediatory.

Advantages

·      It is voluntary

·      The environment is more friendly thereby resulting in quicker settlement

·      The outcome is predictable and influenced by the parties

·      The opinion of the conciliator is usually very influential in reaching a decision

 

Disadvantages

·      It could lead to indecision thereby having to resort to litigation or other adversarial processes

 

E. Expert Determination

This is a voluntary process where a neutral party, usually an expert in the field of the dispute, is appointed by the parties to give a binding decision on the issues in dispute. The expert has no obligation to act judicially but he must act fairly.

Advantages

·      It is voluntary

·      The outcome is usually undisputed because of the expert involvement

·      It is privately done

·      It is usually more cost effective than many other dispute resolution options

Disadvantages

·      It is a win/lose situation

·      The outcome is not predictable nor influenced by the parties therefore it may not be in the interest of either/both of the parties

 

F. Mini Trial

This is a form of evaluative mediation, which is non-binding. This process assists parties to obtain a better understanding of the issue in dispute and enable them enter into settlement negotiation on a more informal basis. It combines a formal legal procedure with elements of information management, negotiation, neutral facilitation and case evaluation. The panel at the mini trial is mainly composed of top-level executives and senior managers who are in a position to take a decision as regards the dispute. After the presentation of case by both parties, the parties’ representatives meet with or without the neutral party and reach a settlement.

 

Advantages

·      The decision reflects the desires of the parties

·      The involvement of experts makes a decision easier to make by the parties

·      It is a supervised procedure that will result in less arguments and quicker resolution

·      It saves time and is cost effective

·      The non adversarial mode of settlement enables parties to better understand each other’s perspective

·      It is private

·      It builds relationship

·      It is more future focused

 

Disadvantages

 

·      Since the third parties do not reach a binding decision for the parties, it may lead to indecision

 

G. Early Neutral Evaluation (ENE)

The parties or their attorneys summarise the conflict for a neutral third party (an evaluator who has extensive experience in the area of law in dispute or who may be a retired judge) to give a non-binding opinion or the settlement value of the case and or a non-binding prediction of the likely outcome if the case is adjudicated upon. The third party to appoint is agreed upon by the lawyers for the parties.

 

Advantages

·      This method triggers realistic settlement offers that can be agreed upon by both parties having known the strength or otherwise of their positions

·      The conclusion is predictable and influenced by the parties

Disadvantages

·      The party with the stronger case may take advantage of the weakness of the opposition’s case to exploit him in his settlement offer having known the likely outcome of the case if adjudicated upon by a judge.

 

H. Med-Arb

This is known as Mediation-Arbitration. It involves mediation and arbitration. It is a process where the third party called the med-arbiter, is authorized by the parties to serve, first as a mediator, then as an arbitrator. The neutral party is usually skilled in mediation and arbitration in order to guide the parties through the mediation process and then to sit over the arbitration process and hand down a binding decision.

 

It must however be noted that the confines of ADR mechanisms are not exhaustive. There are other hybrid processes such as Negotiation-Litigation, Mediation-Litigation and so on.

 

Advantages

·      This gives the parties a fair opportunity to make their decision and a third party comes to their rescue only when a deadlock is reached

 

Disadvantages

·      The skilfulness of the third party in both mediation and arbitration may make the process more expensive than other methods of alternative dispute resolution

·      The parties do not have an option to walk away when they reach a deadlock as the third party must reach a decision for them

·      The decision reached by the third party may be unsatisfactory and may not reflect the desires of the parties