Mediation is a private, voluntary process where an individual, the mediator, helps to facilitate a resolution to the dispute between the parties. Parties enter in to mediation voluntarily and are only bound by the outcome if it is agreed by them and recorded in writing. By mediating parties can protect themselves against most if not all of the risks associated with litigation. This is because mediation is carried out in private and is about negotiating a settlement to the dispute rather than have a third party make a decision which you are forced to live with. Mediation usually lasts for a day but in the current environment it can be scheduled over a longer period to allow for technology. Since 2016 Hunt ADR has appointed mediators in more than 100 disputes and more than 90% of these have settled at mediation. An incredible statistic which demonstrates the power of mediation.
As mediation is a voluntary process, the law in the UK does not force parties to mediate. However, there are many instances where a party refusing to mediate has found that they have been hit with significant cost penalties in the court at a later date - even if they won the eventual court case. This needs to be considered carefully by both parties - the party offering mediation needs to make sure they are offering a process which is documented and has at the very least a named mediator or mediation provider and that fees are transparent. The other party needs to be very cautious if they are refusing an offer to mediate and may wish to take legal advice if they are thinking of refusing. It is a dangerous tactic with the courts routinely penalising those with no suitable reason for refusing to mediate.
Arbitration is like a private court where the judge, known as the Arbitrator, issues a decision called an Award. The Award is legally binding on the parties. Arbitration can be done by a sole arbitrator dealing with documents only evidence or it could include hearings and meetings between the parties and the arbitrator. Sometimes there is a panel of arbitrators, a Tribunal, with three arbitrators sitting together. As an adversarial process, like at court, arbitration results in a binding outcome where one party will be the victor and the other will be defeated. Unlike court hearings though, everything in the arbitration is confidential. Since 2016 Hunt ADR has published more than 1000 arbitration awards resolving disputes between businesses, between consumers and businesses and between trade bodies and their members. Parties have used our services in mainland Europe, Hong Kong, Singapore and the United States of America.
Adjudication is predominately used in the UK to resolve construction disputes. The adjudicator has 28 days to issue a decision which is binding on the parties until the contract is complete. It is also used in consumer disputes by ombudsman. Hunt ADR has recently become an Adjudicator Nominating Body under the relevant construction Acts and we are working on a number on innovations which we will bring to the market soon.
Conciliation is close to and often interchangeable with mediation The significant difference is that a conciliator can make a recommendation to the parties to help them resolve the dispute. An example would be where parties are close to settlement but just can't find that extra concession to make it work. The Conciliator, who will know each parties' top and bottom line, can make a recommendation that he or she thinks the parties will agree to. More often than not it works!
There are many other types of ADR, like dispute boards, neutral evaluation (and early neutral evaluation), medarb, arbmed, medadj and expert determination, To find out more please contact us.