MLC101 Business Law

Question:

Essay Topic : It is better to resolve disputes in domestic, international business, consumer, or commercial matters through court proceedings than alternative dispute resolution (“ADR”)

Do you agree or disagree with this statement?

Discuss

1. To recognize and evaluate legal issues, apply key principles of commerce law.

2: Interpret legal issues in both domestic and international contexts.

3: Use appropriate technology to search for, retrieve and apply information relevant to law and commerce.

Answer to Question: MLC101 Business Law

Introduction

Alternative dispute resolution, which can be used in solving disputes, can make any justice system more efficient.

This process is inexpensive and can save couples time and money.

For example, parties can waste a lot of money and time by hiring lawyers or filing suits.

ADR also increases satisfaction and smoothens relations between parties.

From the litigation side, it is for rare cases that the parties remain in close relations after the settlement.

ADR can improve the efficiency of courts by decreasing cases burden.

This paper will examine the effectiveness of ADR in commercial, domestic and international disputes.Alternative Dispute Resolution

ADR is a conflict resolution process that offers a more comprehensive option to litigation.

ADR involves a third party, which is different from lawsuits. This helps the parties to reach an amicable agreement.

There are many different ADR processes.

One of these is called a negotiation.

This one involves voluntary communication.

The parties involved in a conflict have to talk to one another and then reach an agreement.

Negotiation is often referred to as ADR or conflict prevention.

Mediation is another method of ADR.

This is when the conflicting parties seek the assistance of an independent, neutral third party.

A mediator is a facilitator process, just like negotiation.

It should be noted that the role and function of the third party is to facilitate, not to give any advice.

There is also conciliation.

This process is widely used by Labour Relations Commission in solving industrial disputes.

This process is used extensively in resolving disputes within the construction industry.

The process is classified as an advisory one.

This involves the participation of a third person who helps participants to assess the problem and then actively supports them in reaching mutual agreements.

After conciliation, arbitration is also known to be a determinative ADR process.

All determinative processes involve a third party neutral who listens to both parties and decides a case.

A combination of expert determination and adjudication are other examples of determinative processes.

These are the most widely used methods, but there’s another class called Collective ADR.

This method is often used when multi-party situations are involved and the parties don’t want to use litigation.

Ombudsman Schemes could be an example.

Judicial ADR Procedure is another option.

These are dispute resolution options that can be used to resolve disputes between parties. However, they can also be used to resolve cases during litigation.

ADR Overview and Objectives

ADR procedures can be used to achieve both policy and objective goals.

ADR methods such conciliation and mediation are part of Irish statutory systems (Cox (2012)).

A similar arrangement is in Australia where the Australian Conciliation & Arbitration Commission oversees the ADR process.

There are many ADR methods, but the scope of their application varies between countries.

ADR may be carried out in one location only; others can spread it across the country.

ADR can resolve many types and kinds of conflicts.

Disputs can be between employees vs. managers, consumers vs. merchants, or government vs. the government.

ADR is an area that can benefit from such conflicts. They also provide a platform for examining its effectiveness.

ADR’s effectiveness can be complicated because different methods and application may produce different results.

A remedy that is legal under ADR may differ from a solution in another jurisdiction, depending on local laws.

However, ADR can be used in numerous situations.

Cost effective

ADR is often used to settle domestic disputes like employees against management. Numerous studies have shown that it can save money.

American Arbitration Association, 2010, stated that ADR methods, such as negotiation and mediation, increase the chances of both parties reaching an agreement.

Like litigation, arbitration tends to be more predictable than that of mediation.

This is because there are less chances of a harsh verdict in arbitration than it would be in a trial.

ADR is a method of resolving domestic disputes that allows parties flexibility and lowers the costs of mediation, arbitration, and negotiation.

These benefits increase even more when international conflicts are involved.

This reduces the need for parties to cross national boundaries.

The judgment of a foreign court is often contested.

He stated in (Campbell, 2010) that parties tend to avoid situations in which their case would be heard before a court located outside of their country.

One party fears the other’s court will decide their case in favor of the company that resides within.

Arbitration is becoming more popular than litigation.

Arbitration is becoming more popular than litigation for many reasons.

Most parties also avoid litigations as they take too long and are not as efficient as what is happening in the United States.

Additionally, it is very expensive and results in a rather hostile relationship between the involved parties.

Time Saving

ADR effectiveness can be evaluated by assessing the time required to resolve disputes.

Then it is possible to compare the time taken with a litigation process.

It is also known as the time it takes to dispose of a case.

It usually refers to the time between filing a case and settlement.

(Amsler, et al.2009) The study showed that ADR can save employees approximately 88 hours per year and take around six months to complete a case.

A study by The Study Centre for Consumer Law-Centre for European Economic Law, 2007, compared the effectiveness of ADR to litigation in consumer vs. business disputes. It found that consumers are more likely to seek a fast solution through direct negotiations than to assert their legal rights.

One example of consumer redress is delivery, repair, replacement, refund or exchange of product or services.

Since businesses are often repeat participants in direct negotiations, it is becoming more common for businesses establish and run formalized complaint handling procedures within their companies to resolve consumer disputes as soon as they arise.

Other Effects

Direct effects like cost and time can be easily measured.

ADR offers additional benefits to participants.

Some of these benefits even go as far as helping non-participants.

These benefits can include ADR where the employer and an employee both use it, and the employee keeps his/her job.

There are other benefits, such as the increase in effectiveness of courts. This benefit can be beneficial to firms who go through the courts.

The advantage is that they can settle their case outside.

There are other advantages, such as a reduced number of cases in courts and a quicker resolution for those in litigation (Tarr. 2014).

Conclusion

ADR has been shown to be cost-effective and efficient for both the parties.

ADR may offer final solutions in some cases, but not all. Negotiations or mediation can fail and the parties could end up in court.

Policy makers should be aware that ADR can offer the same solution as the court and can help improve the effectiveness, efficiency, and awareness of the courts.

Refer toCox, J. (2012).

Business law. 5th ed.

Oxford: Oxford University Press.

American Arbitration Association (2010).

Handbook on employment arbitration and ADR. 2nd ed.

Huntington N.Y. Juris, p.51.

L. Amsler. T. Nabatchi. T. Senger. J. Jackman. M.

Dispute Resolution and The Vanishing Trial. Comparing Federal Government Litigation, ADR Outcomes.

Ohio State Journal on Dispute Resolution. Vol 24(2). Available at: https://ssrn.com/abstract=1127878 [Accessed 25 Apr. 2017].

The Study Centre for Consumer Law, Centre for European Economic Law (2008).

A comparison and evaluation of alternatives to redress for consumers other than through ordinary judicial procedures.

Final Report, Page 46Campbell, D. (2010).

International dispute resolution. 1st ed. Alphen aan den Rijn: Kluwer Law International., p.8.Tarr, G. (2014).

Judicial procedure and judicial decisionmaking. 6th ed. Boston: Wadsworth, Cengage Learning, p.220.