INTRODUCTION:

“ADRs are flexible, that is, in principle the parties are free to have recourse to ADRs, to decide which organisation or person will be in charge of the proceedings, to determine the procedure that will be followed, to decide whether to take part in the proceedings in person or to be represented and, finally, to decide on the outcome of the proceedings.¹ ADR is an umbrella term which includes various sorts of processes, except litigation, used to resolve disputes between parties. Differences include: levels of formality, the presence of lawyers and other parties, the role of the third party (for instance the mediator), and the legal status of any agreement reached.²

Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes without a trial. Common ADR processes include mediation, arbitration, and neutral evaluation. These processes are generally confidential, less formal, and less stressful than traditional court proceedings. ADR often saves money and speeds settlement. In mediation, parties play an important role in resolving their own disputes. This often results in creative solutions, longer-lasting outcomes, greater satisfaction, and improved relationships. ADR can be defined as a technique or mechanism of dispute resolution through the intervention of the third party. In ADR the neutral third party may bridge the gap between the parties by bringing them together through the process of arbitration, conciliation, mediation or negotiation, thus the ADR aims to provide an inexpensive, speedy and less formalistic remedy to the aggrieved party. Its purpose is to provide a remedy which is most appropriate in the circumstances of the case.

All ADR processes share several features which are illustrated below:-

Ø typically less formal than litigation,

Ø they provide a rapid, relatively inexpensive alternative to litigation,

Ø they usually encourage negotiated settlement rather than adjudicated decisions,

Ø they are often highly confidential in relation to litigation,

Ø they are flexible enough to be adapted on a case-by-case basis, because they are not governed by legal rules, and

Ø they are typically provided by private practitioners for a fee, rather than by judges and lawyers. ³

Brief History of Alternative Dispute Resolution

ADR started in the USA in a drive to find alternatives to the traditional legal system, felt to be adversarial, costly, unpredictable, rigid, over-professionalised, damaging to relationships, and limited to narrow rights-based remedies as opposed to creative problem solving. The American origins of the concept are not surprising, given certain features of litigation in that system, such as: trials of civil actions by a jury, lawyers' contingency fees, lack of application in full of the rule "the loser pays the costs". Beginning in the late nineteenth century, creative efforts to develop the use of arbitration and mediation emerged in response to the disruptive conflicts between labor and management. In 1898, Congress followed initiatives that began a few years earlier in Massachusetts and New York and authorized mediation for collective bargaining disputes. In the ensuing years, special mediation agencies, such as the Board of Mediation and Conciliation for railway labor, (1913) (renamed the National Mediation Board in 1943), and the Federal Mediation and Conciliation Service (1947) were formed and funded to carry out the mediation of collective bargaining disputes. Additional state labour mediation services followed. The 1913 New lands Act and later legislation reflected the belief that stable industrial peace could be achieved through the settlement of collective bargaining disputes; settlement in turn could be advanced through conciliation, mediation, and voluntary arbitration.

Need for ADR

The system of dispensing justice in India has come under great stress mainly because of the huge pendency of cases in courts. In India, the number of cases filed in the courts has shown a tremendous increase in recent years resulting in pendency and delays underlining the need for ADR methods.

Types of ADR Mechanisms:

ADR is generally classified into the following types:-

Arbitration:

The dispute is submitted to an arbitral tribunal which makes a decision (an "award") on the dispute that is mostly binding on the parties. It is less formal than a trial, and the rules of evidence are often relaxed. Generally, there is no right to appeal an arbitrator's decision. Except for some interim measures, there is very little scope for judicial intervention in the arbitration process. The major dispute resolution processes consist of two main classes: those that reserve authority for resolution to the parties themselves and those in which a third party decides the matter.⁴

Conciliation:

A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute in reaching a mutually satisfactory agreed settlement of the dispute. Conciliation is a less formal form of arbitration. The parties are free to accept or reject the recommendations of the conciliator. However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.

Mediation:

In mediation, an impartial person called a "mediator" helps the parties try to reach a mutually acceptable resolution of the dispute. The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves. Any person who undergoes the required 40 hours training stipulated by the Mediation and Conciliation Project Committee of the Supreme Court (SC) can be a mediator. He also needs to have at least ten mediations resulting in a settlement and at least 20 mediations in all to be eligible to be accredited as a qualified mediator. Mediation leaves control of the outcome with the parties.

Negotiation:

A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement to the dispute. It is the most common method of alternative dispute resolution. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life.

Lok Adalats

‘Lok Adalat’ is yet another form of ADR created as per the requirements of people in particular areas. Camps of Lok Adalat were initially started at Gujarat in 1982 and now they have been extended to all over India. The main purpose of establishment of Lok Adalats is to diminish the heavy burden of pendency of cases in the Courts which were of petty nature. The seekers of justice are in millions and it is becoming rather a heavy burden on the courts to dispose off such matters keeping in view the ever increasing litigation.

Importance of Alternative Dispute Resolution (ADR) in India

Alternative Dispute Resolution System has great importance in India. Here courts have a huge number of pending cases which require a lot of time for their disposal by the courts as the procedure of courts is very lengthy. Dispute Resolution (ADR) is needed for their quick resolution. Increase in number of pending cases in the courts, delay in trial, extremely expensive litigation system of Courts are some of the reasons for the enactment of Arbitration and Conciliation Act, 1996. Moreover, these is a large number of illiterate and poor people in India, who cannot afford the lengthy, technical and expensive system of courts and the Alternative Dispute Resolution (ADR) could be a boom for these people. At present the need of the hour is to relieve the courts from the heavy burden of petty cases so that they can devote time to those cases which are more heinous and deal with criminals who are a threat to society. It is important that a student should get the basic idea of having the benefit of avoiding litigation and opting for alternate dispute resolution. A person must know that by wasting the time of the courts the expenses of the courts go up. These expenses are met by the Government of India from the taxes which are paid by the citizens of the country. There are ways and means to resolve a dispute peacefully. The only thing is that we have to have communication with an open mind and try to avoid from approaching the courts.

In this lesson, you have learnt about the Alternate Dispute Resolution Procedures, namely Arbitration, Conciliation, Mediation, Negotiation and Lok Adalats.

Status of ADR System in India

Statutory Backing: The Legal Services Authorities Act was passed in 1987 to encourage out-of-court settlements, and the new Arbitration and Conciliation Act was enacted in 1996.

Inclusion of Plea Bargaining: Procedure for plea-bargaining was included in the Code of Criminal Procedure in 2005.

o Plea-bargaining is best described as a "pre-trial negotiation between the accused and the prosecution during which the accused agrees to plead guilty in exchange for certain concessions by the prosecution."

§ Lok Adalats: Lok Adalat or "people's court" comprises an informal setting which facilitates negotiations in the presence of a judicial officer wherein cases are dispensed without undue emphasis on legal technicalities.

o The order of the Lok-Adalat is final and binding on the parties, and is not appealable in a court of law.

§ Other Legal Provisions:

o In 2021, the Lok Sabha passed the Arbitration and Conciliation (Amendment) Bill, 2021 to check misuse by “fly-by-night operators” who take advantage of the law to get favourable awards by fraud.

The Bill intends to replace the Arbitration and Conciliation (Amendment) ordinance issued in November, 2020.

More recently in July 2022, the Parliamentary Standing Committee on Law and Justice recommended substantial changes to the Mediation Bill, 2021.

Online Dispute Resolution (ODR): The NITI Aayog in its recently released report - The Future of Dispute Resolution discusses the concept of Online Dispute Resolution (ODR) - its evolution, significance and present status in India.

ODR refers to the usage of ICT tools to enable parties to resolve their disputes.

In its first phase, ODR shares its fundamentals with ADR Mechanisms of negotiation, mediation and arbitration.

Advantages and Disadvantages of ADR System in India

Participating in a civil suit is unpleasant and tiring. Expenses in payment of court fee, lawyers fee and fee for obtaining copies of court proceedings and orders involve lot of expenses. A party to a case may be required to come many times for proceedings in the case involving expenses in travel to and from the court, spending time in court and meeting other expenses. On the other hand, it has certain benefits too. The legal rights may be determined where interpretation of law is required. ADR allows parties to work together to solve the dispute without letting the relations getting sore. Thus, many disputes as to quality of in the commodity trades, rent of commercial property.

ADR methods involve considerable benefits as well as significant drawbacks. Due to this reason, it is highly recommended for disputants to assess current situation and position of their case as to whether it fits any of the ADR method or not. In order to understand advantages of ADR methods, advantages and disadvantages are examined below separately.

Allow Access to Justice: ADR methods can be more accessible to those who have limited economical sources.

Efficiency on Time and Cost: Even though, there are still numerous discussions with regard to the efficiency of ADR methods by means of time and cost. It might be possible to mention that, ADR methods are more or less efficient than that of adjudicative dispute resolution methods.

Flexible and Creative: The parties can choose the ADR process that is best for them. For example, in mediation the parties may decide how to resolve their dispute. This may include remedies not available in litigation (e.g. a change in the policy or practice of a business) ⁵

Confidential: Unlike the court system where everything is on the public record, ADR can remain confidential. This can be particularly useful, for example, for disputes over intellectual property which may demand confidentiality17.

Win-Win Nature: ADR methods are non-adversarial. In order to establish long-lasting business relationship, it is quite important to resolve dispute in amicable way and produce win-win outcomes.

1. ADR process can be initiated at any time, when the disputing party takes recourse to ADR.

2. It can provide more expeditious and less expensive settlement of disputes.

3. It promotes conducive and amicable mechanisms.

4. This system provides a flexible procedure and is not rigid.

5. No lawyer’s assistance is mandatory, it does not mean that the role of lawyer is diminished.

6. ADR reduces the workload of the regular courts of law.

7. ADR helps in confining disputes as a private matter.

8. ADR can be used to reduce the gravity of contentious issues between the parties.

Benefits of alternative dispute resolution

ADR gives parties in dispute the opportunity to work through disputed issues with the help of a neutral third party. It is generally faster and less expensive than going to court.

· save a lot of time by allowing resolution in weeks or months, compared to court, which can take years

· save a lot of money, including fees for lawyers and experts, and work time lost

· put the parties in control (instead of their lawyers or the court) by giving them an opportunity to tell their side of the story and have a say in the final decision

· focus on the issues that are important to the people in dispute instead of just their legal rights and obligations

· help the people involved come up with flexible and creative options by exploring what each of them wants to achieve and why

· preserve relationships by helping people co-operate instead of creating one winner and one loser

· produce good results, for example settlement rates of up to 85 per cent

· reduce stress from court appearances, time and cost

· keep private disputes private - only people who are invited can attend an ADR session, unlike court, where the proceedings are usually on the public record and others, including the media, can attend

· lead to more flexible remedies than court, for example by making agreements that a court could not enforce or order (for example a change in the policy or practice of a business)

· be satisfying to the participants, who often report a high degree of satisfaction with ADR processes give more people access to justice, because people who cannot afford court or legal fees can still access a dispute resolution mechanism.

CONCLUSION:

In the light of aforesaid explanations, it might be recommended for disputants evaluate existing position of their case and their needs prior to determine the best method to be used while resolving the dispute at stake. Each method has its own benefits as well as drawbacks. Due to this ground, it is not possible to reach a conclusion that any of the methods absolutely circumvent others. However, there is a clear intention in the business world to apply ADR methods while dealing with the conflicts arisen from international commercial contracts. On the other hand, there are still considerable amount of business people who does not prefer to break their routine on applying litigation.

SUGGESTIONS:

· ADR Institutions must develop largely in all parts of the country.

· Each court should have Arbitration and Mediation Centres.

· The legal recognition of ADR bodies would be of no use unless the people are aware as well as keen to choose ADR over the courts.

· Measures must be taken to encourage more voluntary use of ADRs.

· There is a need to establish new private bodies for non-commercial disputes.

· The accelerated pressure upon the Indian judiciary would also need to be minimised with empowering ADR system.

· In order to cope with the needs of the people and provide them the inherent right to access to justice, the task is to empower the existing ADR systems with more strength.

REFERENCES:

1. Green Paper on alternative dispute resolution in civil and commercial matters COM/2002/0196 Final. Available at http://eurlex.europa.eu

2. Lewis and McCrimmon. The Role of ADR Processes in the Criminal Justice System: A view from Australia‘. Paper presented ALRAESA Conference, Uganda, September 2005 at 2. Available at: http://www.justice.gov.za.

3. Lucille M. Ponte, Thomas D. Cavenagh, Alternative Dispute Resolution in Business, West Educational Publishing Company, 1991, p. 28

4. Lucille M. Ponte, Thomas D. Cavenagh, Alternative Dispute Resolution in Business, West Educational Publishing Company, 1991, p. 29

5. Victorian Law Reform Commission, Civil Justice Review Report, March 2008, p.214

Received on 11.07.2023 Modified on 03.08.2023

Asian Journal of Management. 2023;14(3):211-215.

DOI: 10.52711/2321-5763.2023.00036