What is the best and cheapest way to resolve commercial disputes outside of court?
19-March-2015 Commercial Disputes By Mark StreeterHow to use Alternative Dispute Resolution (ADR) to resolve commercial disputes
The “best” way of resolving a dispute changes and certainly depends on the context, the type of dispute, its complexity and the competing interests of the parties. In commercial settings, the “best” way almost certainly involves a strong consideration of the most cost-effective way of resolving a dispute.
In some circumstances, the nature of the dispute (eg. fraud) requires a more heavy-handed approach, especially when it involves the preservation of assets, intellectual property, search orders, suppression orders or other forms of urgent ex-parte interlocutory relief (this involves approaching the Court for certain orders before the other party is notified). Following is a brief explanation of when it is appropriate to use ADR, with a particular focus on the differences between litigation, mediation and conciliation.
What is mediation?
Mediation involves the intervention of a third party who is trained (either in mediation or in that particular area of dispute) and impartial. The mediator assists both parties to resolve their dispute.
The National Alternative Dispute Resolution Advisory Council (NADRAC) prefers to see the term ‘mediation’ to describe a process where:
“The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise on or determine the process of mediation whereby resolution is attempted.”
Practically speaking, the mediator will sometimes give advice about the substance of the dispute. Parties will often be referred to a court-“annexed” mediation (that is, referred by the court to a court registrar or appointed mediator) or the parties can choose to appoint their own private mediator and share the associated costs.
What is conciliation?
Conciliation can have different definitions depending on the jurisdiction. Essentially, conciliation is similar to mediation in that the conciliator does not play a determinative role; however, NADRAC has made the following distinction:
“Mediation is purely facilitative, whereas conciliation may comprise a mixture of different processes including facilitation and advice.”
Conciliation is a term used in the following jurisdictions or sectors:
- Industrial disputes (historically)
- Family Law
- NSW Civil and Administrative Tribunal (formerly the Consumer Trader and Tenancy Tribunal); and
- Health or aged care sectors.
Which direction to take?
If you are seeking to resolve a commercial dispute, you firstly need to do the following:
- Ask yourself: “What outcome do I really want to achieve?”
- Obtain legal advice and understand your legal rights, obligations and position before acting.
- Never discount the benefits of ADR – particularly in circumstances where it might offer remedies which may not be possible in litigation.
Clients are often bombarded by the variations of ADR and unnecessarily immerse themselves in weighing up the pros and cons of a plethora of ADR options. As a consequence, it is not unusual for clients to lose focus of the end goal.
Streeterlaw would strongly recommend to clients that they firstly consider what they really want to achieve. A good lawyer will let you know whether your desired outcome is possible and give you the options for the ‘best’ way of achieving it.
While litigation delivers results, there will always be doubt about the outcome. It’s very important that clients understand the options provided by mediation and conciliation before proceeding to the often more costly alternative of litigation.
If you would like advice on how to best resolve your dispute efficiently and cost effectively, please contact Streeterlaw on 8197 0105 or email advice@streeterlaw.com.au.
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