Alternative (Construction) Dispute Resolution (ADR)

Overlooking a site which was subject to international arbitration

Overlooking a site which was subject to international arbitration

Comparison of Alternative Construction Dispute Resolution Procedures

What is Alternative Dispute Resolution?

The term ‘alternative dispute resolution’ might originally have been applied to any method of resolving disputes other than litigation. Language changes and ADR is now commonly used to describe alternatives to any imposed, externally-regulated and binding system of resolving disputes.

It may mimic processes such as courtroom trials or arbitration hearings, or adopt wholly dissimilar procedures. There are formal protocols or codes of conduct available which can be followed if wished. (Guidance on this may be obtained from various bodies, of which the Centre for Effective Dispute Resolution, CEDR[1] is one, and reference may usefully be made to the Commission of the European Communities’ green paper which defines alternative dispute resolution as ‘out-of-court dispute resolution processes conducted by a neutral third party, excluding arbitration proper’.[2]).

Traditionally, alternative dispute resolution is entered into voluntarily and governed by agreement between the parties in dispute. More recently, ADRs which are conducted by the court or entrusted by the court to a third party (ADRs in the context of judicial proceedings), are taking on a greater significance in Europe. For example, pursuant to Rules 26.4 and 44.5 of the Civil Procedure Rules for England and Wales, which came into force on 26 April 1999, the court may suspend a case to allow the litigants to have recourse to mediation and can order the litigants to make financial penalty payments if they refuse mediation.

Benefits and Difficulties of Alternative Dispute Resolution

ADR can work well where all want a fair and equitable remedy – and badly where they do not. These voluntary and little-regulated processes can be disingenuously appropriated to obfuscate rather than resolve issues, so deferring the day of reckoning and delaying both technical and legal remedy. For this reason, non-binding dispute resolution procedures are useful only where those involved are capable of moderating self-interest with enlightened objectivity, in which the natural desire to avoid blame is balanced with the long-term benefit that comes from consensus rather than dispute.

Finding consensus between opposing interests, especially where the outcome is likely to be costly to one party, is difficult. It is useful for those involved to remember, when considering strict liability, that compromise over the cost of repair is often cheaper than litigation. If the parties can be persuaded that it is better to put their energies and money into resolution rather than dispute, alternative dispute resolution offers several tried and tested methods.

[1][2] ‘Commission of the European Communities, Brussels, 19.04.2002, COM(2002) 196 Final Green Paper on Alternative Dispute Resolution in Civil and Commercial Law’.