ALTERNATIVE DISPUTE RESOLUTION METHODS BY ARSHAD NAWAZ KHAN

law

1. ALTERNATIVE DISPUTE
RESOLUTION
ArshadNawazKhan

2. •Alternative Dispute Resolution (ADR) is the
procedure for settling disputes without litigation.
Why ADR
•It is usually faster and less costly
•People have a chance to tell their story as they see it
•It is more flexible and responsive to the individual
needs of the people involved
•It is more informal
•The parties' involvement in the process creates
greater commitment to the result so that compliance
is more likely
•the confidential nature of the process

3. Modes of Alternative Dispute
Resolution
•Negotiation
•Mediation
•Arbitration
•Family group conference
•Early Neutral Evaluation (ENE)
•Fact-Finding Method
•Mini trial
•Mini jury trial
•Organizational ombudsman

4. Negotiation
•Negotiation involves two parties discussing and
compromising to obtain an agreed solution.
•Any form of direct or indirect communication whereby
parties who have opposing interests discuss the form of
any joint action which they might take to manage and
ultimately resolve the dispute between them
•Negotiations may be used to resolve an already-existing
problem or to lay the groundwork for a future
relationship between two or more parties.
•Negotiation is usually carried out without legal
representatives, but each party can take their own legal
representation to assist

5. Characteristics
•Voluntary:No party is forced to participate in a negotiation.
•Bilateral/Multilateral:Negotiations can involve two, three or
dozens of parties.
•Non-adjudicative:Negotiation involves only the parties. The
outcome of a negotiation is reached by the parties together
without recourse to a third-party neutral.
•Informal:There are no prescribed rules in negotiation.
•Confidential:The parties have the option of negotiating
publicly or privately.
•Flexible:The scope of a negotiation depends on the choice of
the parties. The parties can determine not only the topic or
the topics that will be the subject of the negotiations, but also
whether they will adopt a positional-based bargaining
approach or an interest-based approach.

6. Advantages
•In procedural terms, negotiation is probably the most flexible form
of dispute resolution
•Negotiations have a greater possibility of a successful outcome when
the parties adopt an interest-based approach as opposed to a
positional-based approach i.e. win-win approach
•Negotiation is a voluntary process.
•There is no need for recourse to a third-party neutral.
•The outcome of a negotiation only binds those parties who were
involved in the negotiation.
•Negotiation will provide the parties with the opportunity to design
an agreement which reflects their interests.
•Negotiations may preserve and in some cases even enhance the
relationship between the parties.
•Opting for negotiation instead of litigation may be less expensive

7. Disadvantages
•Parties may be of unequal power and the weaker party(ies) may be placed at
a disadvantage.
•A successful negotiation requires each party to have a clear understanding
of its negotiating mandate. If uncertainty exists regarding the limits of a
party's negotiating authority, the party will not be able to participate
effectively in the bargaining process.
•The absence of a neutral third party can result in parties being unable to
reach agreement.
•The absence of a neutral third party may encourage one party to attempt to
take advantage of the other.
•No party can be compelled to continue negotiating.
•The negotiation process cannot guarantee the good faith or trustworthiness
of any of the parties.
•Negotiation may be used as a stalling tactic to prevent another party from
asserting its rights (e.g., through litigation or arbitration).
•

8. Mediation
•The intervention into a dispute or negotiation by an
acceptable, impartial and neutral third party who
has no decision making power, to assist disputing
parties in voluntarily reaching their own mutually
acceptable settlement of issues in dispute
•Mediation is negotiation between disputing parties.
•Assisted by a neutral.
•The mediator is not empowered to impose a
settlement.
•The mediator's presence helps shape the final
settlement.

9. Characteristics
•Voluntary:No party is forced to use a mediator, nor are they
forced to agree to a particular settlement.
•Non-Coercive:The mediator does not decide for the parties,
but helps them make their own decision.
•Assisted Negotiation:The mediator's role is to be an impartial
third party who helps the parties reach a fair and mutually
acceptable settlement.
•Informal:The proceedings of a mediation are more relaxed
and informal than those of a court or an arbitration
•Confidential:Generally, mediation is described as a
confidential process. It is up to the parties to jointly establish
any limits. If it is decided that the mediation should be
confidential, the parties and the mediator should sign a clause
to that effect.

10. Preparation
•The choice to go to mediation rests with the parties.
•The parties must mutually select a mediator, either
through referrals or directly.
•The mediation agreement should be drafted, laying out a
number of critical items, including, but not limited to:
▫Logistics of the mediation
▫The cost-sharing arrangement
▫The mandate of the mediator
▫Confidentiality
▫The use of subsequent processes if mediation is
unsuccessful
▫Remuneration for the mediator.

11. Tasks of mediation
•Agreeing to mediate
•Understanding the problem(s)
•Generating options
•Reaching agreement
•Implementing the agreement

12. Important steps
•Stage 1: Initial Contacts with the Disputing Parties
▫Build credibility
▫Promote rapport
▫Educate the parties about the process
▫Determine whether a lawyer needs to be consulted
▫Increase commitment to the procedure
•Stage 2: Selecting a Strategy to Guide Mediation
▫Assist the parties to evaluate various methods of conflict
resolution
▫Assist the parties to select an approach
•Stage 3: Collecting and Analyzing Background
Information
▫Gather and verify accurate data about the personalities,
contest and substance of a dispute

13. •Stage 4: Designing a Detailed Plan for Mediation
▫Identify strategies that will enable the parties to move towards agreement
•Stage 5: Building Trust and Cooperation
▫Prepare parties to deal with difficult substantive issues
▫Handle strong emotions
▫Identify perceptions and minimize effects of stereotypes
▫Build recognition of the legitimacy of the parties and issues
▫Clarify communications
•Stage 6: Beginning the Mediation Session
▫Open communication
▫Establish an open and positive tone
▫Establish ground rules and behavioral guidelines
•Stage 7: Defining Issues and Setting an Agenda
▫Identify broad topic areas of concern to the parties
▫Obtain agreement on the issues to be discussed
▫Determine the sequence of handling the issues

14. •Stage 8: Uncovering Hidden Interests of the Disputing Parties
▫Identify the substantive and procedural interests of the parties
▫Educate the parties about each other's interests and needs
•Stage 9: Generating Options for Settlement
▫Develop an awareness among the parties of the need for options
▫Assist in lowering parties' commitment to positions or sole
alternatives
▫Generate options through brainstorming and dialogue
•Stage 10: Assessing Options for Settlement
▫Review the interests of the parties
▫Assess how interests can be met through various options
▫Assess the costs and benefits of each option

15. •Stage 11: Final Bargaining
▫Bring the parties' interests together
▫Generate will to compromise
▫Create an agreement or Memorandum of
Understanding
•Stage 12: Achieving Formal Settlement
▫Identify procedural steps to operationalizethe
agreement
▫Establish an evaluation and monitoring procedure
▫Formalize the settlement and create an enforcement
mechanism.

16. Role of a Mediator
•Encourage exchanges of information
•Help the parties understand each other's views
•Let the parties know that their concerns are
understood
•Promote a productive level of emotional expression
•Lay out the differences in perceptions and interests
•Identify and narrow issues
•Help parties realistically evaluate alternatives to
settlement
•Suggest that the parties take breaks when
negotiations reach an impasse

17. •Encourage flexibility and creativity
•Shift the focus from past to future
•Shift the focus from one of blame to a creative
exchange between the parties
•Hold caucuses with each disputant if there is
deadlock or a problem
•Propose solutions that meet the fundamental
interests of all parties.

18. Advantages
•Mediation is particularly useful when the disputing parties need or
desire to maintain an ongoing relationship. The consensual process
in mediation allows parties to avoid the adversarial elements of
litigation
•Mediation is a creative approach to dispute resolution which is not
governed by strict rules of procedure. This allows the parties to
design a process which suits their needs and encourages a
consensual, rather than an adversarial approach.
•The presence of a mediator allows disputants to explore settlement
options openly thereby allowing the mediator to become privy to
both the interests and positions of the parties.
•Mediation is particularly advantageous in complex cases which
involve numerous issues.
•The process is appropriate if confidentiality is considered necessary.
•A mediated settlement can be reached far quicker than a litigated
one.

19. •Due to the speed and informality of a mediation, the
costs are generally considerably less than litigation. This
is of importance both to corporate parties who wish to
keep costs down and to parties who otherwise might not
be able to afford the cost of the court process.
•The presence of the third-party neutral allows for a
controlled dialogue which is useful if previous
negotiations have broken down or if the issue being
mediated sparks strong emotions.
•It is a general rule that the costs of mediation will be
borne equally by all parties. Therefore, both parties have
an equal stake in the outcome and a sense of ownership.

20. Disadvantages
•Since parties to a mediation meet face to face, there is
concern, particularly in cases involving harassment, that
there might be a power imbalance between the parties.
•Due to its private, non-adjudicative nature, mediation
cannot produce legal precedents.
•A strong-willed mediator can exercise too much control
over the mediation and affect the eventual resolution.
•The lack of a binding third-party decision, might
encourage a defendant to agree to a mediation, but not
fully cooperate, in an attempt to delay a resolution of the
dispute.

21. Arbitration
•Arbitrationis“alegaltechniquefortheresolutionof
disputesoutsidethecourts,whereinthepartiestoa
disputereferittooneormorepersons(the
“arbitrators”,“arbiters”or“arbitraltribunal”),by
whosedecision(the“award”)theyagreetobe
bound.”
•Arbitrationshouldnotbeconfusedwithmediation.
Inthearbitration,thearbitratorobligedto
determinethedisputebyreferencetocertainrules,
ratherthantoseekcompromisewhichismediator’s
task.

22. •Therearecurrentlytwomainpiecesoflegislation
dealingwitharbitrationinPakistan:TheArbitration
Act,1940("ArbitrationAct")andtheRecognition
andEnforcement(ArbitrationAgreementsand
ForeignArbitralAwards)Act,2011("Foreign
AwardsAct").
•Arbitrationgenerallyallowsthepartiestodesign
mostaspectsoftheresolutionprocesstosuittheir
needsandthenatureofthedispute.Further,the
partiestoanarbitrationareabletochoosethe
arbitrator,anoptionwhichisnotavailableinthe
traditionalcourtsystem.

23. Characteristics
•Voluntary:Parties must expressly agree to arbitrate in
writing, or fall within the ambit of legislation that
mandates arbitration in a given situation
•Controlled:The parties and their counsel are able to
control procedural aspects of the process, including the
choice of neutral, timing and location of the hearing, as
well as who, other than the parties themselves, may be
present.
•Private:An arbitration is usually conducted in private.
•Informal:Generally there are no strict procedures
prescribed for arbitration process.
•Adjudicative:As in litigation, once a case has been
presented by each side, the arbitrator issues a decision.

24. •Binding/Non-Binding:According to the nature
of subject, the arbitration may be binding or non-
binding.
•Confidential:Arbitration is generally confidential,
if the parties so elect.
•Adversarial:While the arbitration process is based
on the adversarial style of the litigation model, the
conduct and nature of the hearing are determined by
the parties, their counsel and the arbitrator.
•Flexible:The parties have discretion in choosing
an arbitrator and the procedure to be followed in
resolving the dispute.

25. Advantages
•The parties can select the arbitrator(s); arbitrator(s) can
be selected on the basis of experience relevant to the
issues;
•The proceedings can be held in private and
confidentiality may be preserved,
•The rules of procedure can be as formal or informal as
the parties and their counsel determine, subject to any
statutory requirements,
•The cost of the proceedings can often be more easily
contained
•Due to increased control of the process there can be a
greater opportunity for settlement
•Arbitral awards can be binding.

26. Disadvantages
•The success of arbitration is largely dependent on
the experience of the arbitrator(s)
•Arbitral awards are not of legal precedential value;
•Recourse against an award is very limited
•May not suit disputes involving matters of public
law, such as constitutional issues
Time and cost can be significantly affected by a lack of
co-operation of the parties or poor process design,
or by lack of availability of an arbitrator(s).

27. Pakistani Law
•There are currently two main pieces of legislation
dealing with arbitration in Pakistan: The Arbitration
Act, 1940 ("Arbitration Act") and the Recognition
and Enforcement (Arbitration Agreements and
Foreign Arbitral Awards) Act, 2011 ("Foreign
Awards Act").
•“arbitration agreement” means a written agreement
to submit present or future differences to
arbitration, whether an arbitrator is named therein
or not
•“award” means an arbitration award
•reference” means reference to arbitration