Alternative Dispute Resolution: Survey Analysis

Alternative Dispute Resolution: Survey Analysis BY NINA LAURINKARI 1 and LUDOVICA BELLO2 1 Nina Laurinkari has a LLB in European and International...
Author: Diane Hall
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Alternative Dispute Resolution: Survey Analysis

BY

NINA LAURINKARI 1 and LUDOVICA BELLO2

1

Nina Laurinkari has a LLB in European and International law. She is currently finishing her LLM in Law and Globalisation with Human Rights focus at Maastricht University, where she is equally part of the Honours Research Programme. She supports the Research and Liaison department at Effectius. 2

Ludovica Bello is a graduate in international relations from Maastricht University, the Netherlands. Her principal subjects of interest are international law, conflict resolution and migrant rights. She is currently working as an intern at the International Organisation for Migration (IOM) in Montevideo, Uruguay.

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INTRODUCTORY REMARKS

The Effectius’ survey on Alternative Dispute Resolution (ADR) mechanisms has been sent to over 300 organisations worldwide. This article presents and analyses the answers of the 44 survey respondents who have answered to the 10 survey questions related to the type(s) of ADR they offer, the challenges they encounter and the solutions they recommend.

The responding organisations are located throughout the world and serve different functions with different ADR specialisations. This article does not aim to provide a general overview of the ADR environment, but survey respondents did provide important insights into the nature of the ADR mechanisms they offer. Next to presenting the main outcomes of the survey, this article highlights the main trends and shared concerns.3

(1) Basic features of ADR service providers

As to the nature of the ADR service

provider,

6

respondents are governmental. A

larger

portion

of

respondents are the ADR entities

established

independently

from

the

governments, with 20 nongovernmental

organisations

(NGOs)

17

and

private

initiatives/ services.

33

The sample size varies from one (sub)question to another; as some answers were incomplete or inconsistent and the data analysis should be read in that light.

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Alternative Dispute Resolution : Survey analysis

With regard to their reach, 19 of the responding ADR entities are active at domestic level and 11 at sub-national or regional/ local level; 23 entities describe their ADR services as ‘transnational’.

Hence, the majority of ADR services seem to be

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offered according to specific regional demands.

(2) What type(s) of ADR methods do you offer?

ADR types

The answers regarding the (combinations

of)

ADR methods offered were quite

straight-forward:

as

can be seen in the graph,

no. of responses

main

40 35 30 25 20 15 10 5 0

mediation and arbitration were the most widespread forms of ADR. ADR types

Mediation was defined as

the provision of a neutral third party who facilitates the

communication between the parties at a dispute, and who assists the solution-finding processes. Arbitration, on the other hand, was defined as an ADR method which is set up on ad hoc and contractual basis, which is governed by party autonomy i.e. allows for parties’ discretion to determine rules on the seat of arbitration, the composition of panel, the arbitrator, the applicable law, the modus operandi etc.

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Those two ADR methods, or at least one of these services, are offered by almost all respondents. They clearly constitute the core forms of alternative conflict resolution and are sometimes complemented by additional dispute resolution services.

For instance the looser form of arbitration without prior contractual agreement i.e. conciliation has been selected by many entities. About one third of the respondents indicated other services such as negotiation4 , facilitation5 and fact-finding6.

Only a limited number of organisations listed the alternative dispute resolution methods collaborative law7, mini-trials8 and ombudsmen9.

Remarkably, several organisations stressed under the category other ADR methods the importance of providing ex-ante trainings for ADR methods. Those trainings include, among others suggestions to form enquiries/ committees for early neutral evaluation, investigations or friendly mediation, and initiatives on customary procedures, multi stakeholder facilitation, and interdisciplinary enquiries. These activities are often more informal than the standard ADR methods as they aim at creating another level of dispute resolution before going into ‘mainstream’ ADR procedures or court proceedings. These services can allow the organisation to better protect or foster good relationships between the disputants (and eventually the neutral third party). Other innovative approaches mentioned where the development of platforms or specific councils such as a settlement council, a trained expert network or ad hoc procedures. These methods can,

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when parties negotiate voluntarily, resolving their conflict of interest through bargaining and without necessity of neutral party facilitation 5

when a neutral person helps to communicate, to examine material, and to work together more effectively and creatively, but without decision-making authority or contribution to the substance of the discussion 6

where the focus is on finding objective/ missing facts, with the aim to make the disputing parties agree on the available information and on the interpretation and application of present facts 7

used mostly to resolve family disputes by supporting cooperation in a result-focused setting without involving a third neutral party but only representatives/attorneys of the disputants 8

whereby the conflicting parties decide on the composition of the tribunal which then can act inquisitorially and may comment on evidence presented by the two parties without other power than persuasive one 9

intermediary officials who investigate customer complaints against their employers/ citizen complaints against the government services; though often appointed by constituents, they represent the interest of the public

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Alternative Dispute Resolution : Survey analysis

however, also be understood as preparatory steps to further specialise and tailor the core ADR procedure(s).

Other separate methods mentioned dealt with capacity-building initiatives in communities, training programs in schools, and peer mediation to spread the culture of ADR across all levels of society. It is interesting to note that those were mainly programs that organisations offered in addition to the normal ADR services.

(3) What is your affiliation with the official judicial authorities?

Most respondents (33) offered their services independently from traditional judicial/ formal dispute resolution structures; only 10 respondents are clearly attached to, a part of, or realised through the judicial domestic system.

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5 respondents specified partial state or ministerial involvement as to the establishment of the ADR mechanism i.e. in the form of the authorising or appointing instance.

(4) Who has access to your ADR method(s), and what kind of disputes can be handled?

The beneficiaries of the ADR services are mainly citizens or private organisations (33). Whereby 5 organisations provide their services only to private companies and 2 only to citizens/individuals, 10 organisations are accessible to both citizens and companies alike. Only 18 organisations mentioned the government as a possible recipient of the ADR services, whereby all of these organisations except one also indicated citizens and companies as possible beneficiaries.

The trend of providing ADR services to private persons or organisations also explains the character of the disputes to be settled by the respective ADR mechanisms/ services:

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Most of the disputes are dealt with by alternative means of civil nature (13), especially those arising out of commercial (29) or labour (9) disputes. 7 entities provide further specifications on their ADR mechanisms as addressing, amongst others, social disputes in a family or community contexts. Criminal disputes are dealt with rarely (2), and if so, then as a part of general ADR services across the range of dispute ‘sectors’. Some of the commercial dispute resolution services indicate a specific sector specialisation, e.g. industries such as oil & gas/ maritime issues (3) or housing/ education disputes (2).

(5) Are there any eligibility requirements for accessing your ADR mechanism/ bringing a claim?

About half of all respondents indicated down payments i.e. a fixed cost set for presenting

a

claim,

and

documentation requirements such as basic identification, and/or

a

evidence contract

as

prerequisite(s) for access to the ADR mechanism. In most cases, they are required alongside the other.

15 respondents answered that there were no specific eligibility requirements whatsoever; those were almost all ADR entities from the non-governmental sector.

Only a small amount of entities indicated time restraints (minimum/ maximum elapse of time between disputed event and claim) or status requirements (relationship with specific community, rank within organisation, social status, position in company etc).

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Alternative Dispute Resolution : Survey analysis

Some respondents pointed to other eligibility requirements. In a number of cases, a very specific type of status is one of the key requirements, such as being a member of a law enforcement authority or of a law association.

Several respondents mentioned the necessity to have filed a claim in court before, or at least to have initiated some kind of informal complaint procedure prior to the ADR mechanism. This setup leads to a de facto relationship between the formal judicial system and the availability of ADR services. This approach may bring about a degree of transparency of disputes arising and possible cases, but it also places financial burdens on the judiciary and an administrative burden on disputing parties.

(6) Modus operandi/ procedural aspects

Modus operandi binding decisions supervisory mechanism

case-specific yes

possibility of appeal

no 0

10

20

30

40

no. of responses

Can the outcome be appealed / remedied / modified? The first sub-question, whether or not the outcome can be appealed, showed the most balanced responses. It often varied case-to-case, in specific cases only, sometimes yes; and equally important, there was often no appeal possible.

ADR providers may understand the concept of appeal differently, as it may be formal or informal; however, the responses do seem to highlight the fact that appeal is not a constituent element of ADR procedures, but rather that it varies according to the single methodologies. [7]

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Is there a supervisory / monitoring mechanism when implementing the decision? The large majority of respondents does not have a mechanism for monitoring the implementation of decisions in place. Only about a fourth of respondents did indicate a certain degree of supervision during the implementation phase of the ADR decision.

This outcome is striking, as decisions are often binding. As a monitoring element would facilitate the transparent implementation and facilitate a possible follow-up of the ADR outcome, it seems safe to assume that the main reason for not pursuing any monitoring elements is its feasibility rather than conviction.

Are the solutions binding? A large majority of respondents has stated that their decisions are binding (32 out of 41). Even though most organisations stated that enforceability was not a particular problem for the outcome of their cases (see responses to question 8 below), Effectius does not have enough data to conclude with certainty that there is indeed an effective mechanism that guarantees enforceability. It is one thing to say that decisions should be respected, but yet another to have a procedure that will ensure this.

(7) How important are the following advantages of your ADR method compared to traditional in-court settlements?

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Alternative Dispute Resolution : Survey analysis

The most often quoted advantage of ADR methods in comparison to traditional-court procedures is its flexibility, i.e. the increased discretion for the parties to the dispute such as the flexible nomination of a neutral third party and the possibility to tailor the dispute settlement procedures according to the specific needs of the parties leaving room for more practical and adequate solutions. Similarly important were the advantages of ADR methods in terms of speed (e.g. less complex procedures/ timely settlement) and confidentiality (understood as the added value of privacy and the possibility to preserve reputations and relationships). With regard to latter criteria, only one responding organisation indicated a weak difference compared to traditional in-court settlements.

A little more diverse, but still mainly positive have been the answers of the respondents with regard to the added value of ADR methods in terms of a possible decrease of financial burden for the parties involved, the likelihood of settlement (i.e. of reaching a solution), and the advantage of lower overall costs for the justice system. A large majority of the respondents deemed their ADR methods to bring about (very) significant differences in this regard, whereas some organisations indicated only weak or no differences, or did not know about the respective impact.

When we look at the durability of settlement, i.e. the likelihood of the agreement to be longlasting and sustainable over time, it is striking to note that 5 respondents did not know about the impact of their ADR methods on the durability of the settlement. This could also be linked to the lack of data, monitoring ability or lack of interest to measure the effectiveness of their ADR methods.

A noteworthy deviation from above-described trends relates to the added value of ICT-based features in alternative dispute settlement procedures. More than half of the respondents indicated that they did not know the added value of ICT elements in the dispute settlement procedures (21 out of 35). Only 9 respondents found their ADR methods to bring about a (very) significant difference in terms of ICT-based features, whereas 3 organisations indicated such added value as weak or non-existent. This finding could be interpreted in different ways. Perhaps organisations do not review or evaluate the added value of their ADR methods in terms of ICT-features or ADR service providers do not (knowingly) make use of the advantages of ICT-based dispute settlement procedures. In any case, this finding does seem to highlight the fact that online [9]

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dispute resolution methods and/or the role of ICT-based features within ADR settlement procedures deserves more attention and evaluation in the future.

(8) What difficulties do you encounter in the daily practice/execution of the ADR services offered, and to which degree?

no of responses

obstacles 40 35 30 25 20 15 10 5 0

don't know no obstacle weak obstacle significant obstacle very significant obstacle

As to the difficulties encountered during the daily practice and execution of the ADR services offered, the biggest obstacle is the lack of awareness and/ or media coverage of the concept of ADR methods in general – for more than half of all respondents (25 out of 39), this constitutes a (very) significant obstacle. This finding seems consistent with other problems that might be related to this obstacle, like the lack of infrastructure, the lack of funding, the lack of institutional support, and insufficient human resources.

Potential issues unrelated to the general public awareness of ADR methods seem less of an issue, such as excessive expenses for parties, a high administrative burden, the excessive duration of dispute settlement, the negative public perceptions of ADR, the lack of available adequate research, or an insufficient conflict prevention effect. The length of the dispute settlement procedure does not seem to be a problem at all.

20 percent of the respondents declared that they had no knowledge related to some obstacles. This could point to a need for broader research into this field or a better evaluation of ADR services. 10

Alternative Dispute Resolution : Survey analysis

(9) Which potential or implemented solutions have you identified to tackle these problem areas?

Negative public perceptions

The negative public perception of ADR was considered a major problem, and many respondents were willing to contribute with their suggestions for awareness-raising activities.

For instance, some lawyers or legal practitioners believe that ADR is actually quite expensive. A sound evaluation and clear communication with respect to the costs of ADR could be very helpful in this regard. Equally, the gradual transformation of arbitration which in some regions obtains more and more characteristics of traditional litigation (for example in the US) has actually resulted in rising costs and delays. This issue needs to be recognised and addressed where possible to improve general attitudes towards ADR.

Awareness-raising campaigns can be organised within local communities through a wide array of initiatives such as conducting workshops with local elites, working together with traditional courts by exchanging views and stimulating joint initiatives, and hands-on experiences/ co-working with the local population in order to create a more inclusive process. In order to redress negative stereotypes in general, seminars can be organised to sensitise the general public of the benefits of ADR.

An innovative and inclusive approach is needed to stimulate a general change in dispute resolution culture in society. This can be strengthened by creating groups and associations that are more accessible and targeted information campaigns.

Lack of awareness/media coverage

A related problem is the lack of public awareness and/or media coverage concerning the individual ADR service providers.

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Many respondents address this issue with marketing and promotion activities such as organising events and enhanced engagement with (social) media by virtue of articles/ interviews, attendance of media events and press briefings.

More innovative approaches suggested are the joint promotion of ADR service with partner entities and similar service providers, as well as the distribution of simplified material with the main features of the ADR mechanism/pros & cons to business entities and/or prospective beneficiaries/ clients.

Lack of infrastructure

Next to modernisation of infrastructure, one entity suggested the establishment of a permanent instead of a temporary representation. Another organisation mentioned leasing as a potential solution.

The low response rate for solutions related to this obstacle might be explained by the fact that some dispute resolution services might not need too much infrastructure in the first place.

Lack of funding

Some entities recommended spending more time to investigate potential donors, and to make use of official funding projects/ platforms. The search for sponsors can be increased through marketing and project proposals; or at the other extreme, one can opt for focusing solely on funding available from the parties seeking access to the ADR mechanism. Another interesting recommendation was offering only fast-track ADR methods and to involve only a limited amount of dispute settlement experts.

An innovative idea brought forward is offering parallel training programs for a fee, such as seminars, lectures or trainings. This solution seems very promising, as it combines highly recommendable awareness raising and capacity building initiatives with a source of funding.

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Alternative Dispute Resolution : Survey analysis

Expenses for parties too high

Solutions to high expenses faced by the potential beneficiaries and clients of an ADR mechanism have to be seen in the context of the different features of ADR mechanisms offered.

Whereas some respondents pointed to the fact that the expenses were justified because of discretion and control of parties (i.e. arbitration, mainly in the private sector), others pointed to the free provision of ADR services (i.e. mediation or facilitation, mostly nongovernmental service providers) or the option of existing legal aid programs for vulnerable populations provided by the government (public sector entities).

Several arbitration institutions stressed the benefits of drafting a very clear and comprehensible fee structure.

Lack of institutional support

In order to increase institutional support, many respondents pointed to the need of increasing support by the courts by stressing the referral of cases to ADR organisations and enhanced cooperation in general. Some entities focused on their own responsibility, and stressed the networking efforts needed to make their ADR services more available to the traditional dispute resolution structures. As to ‘how’ cooperation and support could be improved, most of the respondents remained silent. More concrete suggestions were the creation and maintenance of an institutionalised relationship with relevant stakeholders in the form of a Stakeholder Advisory Group, as well as the idea to develop draft adapted rules of the ADR method(s) offered that would be more compatible with formal judicial structures.

Lack of research

Within the category lack of research, the respondents identified various issues that need further research. Those were for instance an investigation into alternatives to ADR methods, [13]

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the effectiveness of ADR, the availability of reliable statistics on how many cases are solved in which manner, and the crux of the matter, whether ADR is a viable alternative to traditional litigation or not. To make progress in this context, research and statistics methods should be incorporated more often. In addition, increased collaboration with external experts and (occasionally) commissioning researchers to evaluate and improve the working of the system can also be useful.

ADR organisations can benefit from being more closely related to academics, experts and universities. This also helps them to be kept updated on topical issues and new developments. Moreover, this cooperation would be quite beneficial in terms of raising interest, awareness and expertise of ADR methods – an aspect which, as demonstrated by Effectius’ research, is widely needed.

Administrative burden

To tackle the administrative burden, the following options where mentioned: technology solutions, engagement of experts (which, however, raises again aspects of funding), and a more efficient division of labour.

Insufficient conflict prevention effect

The conflict prevention effect needs to be examined and addressed at a more holistic, interdisciplinary level across all sectors and levels of society. Nevertheless, some respondents shared interesting ideas on this issue, stating that comprehensive solutions lie in improved peace-building processes including improved monitoring and early warning systems.

Inefficiencies of investigation/preparation

The investigation and preparation of alternative dispute settlements should be a neutral process, but unfortunately this is not always the case. Various respondents indicated that there should be more knowledge and a stronger data gathering focus to improve the fairness of the dispute resolution processes. Also, some feared that not all staff members within an ADR 14

Alternative Dispute Resolution : Survey analysis

entity have sufficient competence or training to conduct proper investigations and, even more importantly, to deal with problems that might arise during the proceedings. In this context, the need for further training and monitoring was stressed, and more scrutiny during review and recruiting processes.

Insufficient human resources

Besides general recommendations such as hiring more staff and training more personnel; the basic recommendation here was capacity-building and the need for more independent staff and the creation of a ‘culture of learning’. Inefficiencies of proceeding

The quality of proceedings can be improved by foreseeing trainings for arbitrators, the councils or the dispute resolution expert in charge of the process. After all, they face some cases where the parties involved in the proceedings are unwilling to cooperate, and show little motivation to see the process to an end. Another challenge that needs to be tackled is the inability to take part in, or be present during the proceedings. The problem of mobility can be tackled by sponsoring travel expenses or videoconferencing methods.

Obstacles in reaching agreement / judgment

Several respondents agreed that there needs to be a stronger willingness of the parties to participate in the ADR processes. Trust building between parties is important in this regard. This often goes hand in hand with trust in the neutrality of the arbitration authority. Some organisations suggested intercultural services as a means to curtail the gap in understanding and tolerance between the disputants. In addition, the value of stimulating communication before the proceedings was stressed. This could lead to the conclusion of some sort of agreement or consensus before a hearing, in order to minimise the time and efforts needed in front of deciding or mediating authorities. Interparty communication gives rise to many unanswered questions in itself such as the authority and expertise of those following the prior exchange of viewpoints and challenges related to intercultural and intersectoral communication.

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Excessive duration of dispute settlement

To shorten the duration or proceedings, short time slots can be fixed beforehand by the authority or parties themselves on a case-by-case basis, or laid down in a rule as a fixed time limit that is applicable to all disputes. Other respondents referred to the need to keep track of all disputes and not to lose too much time and efforts on one case or program, whereas others pointed simply to the required cooperation of the parties.

Inability to enforce solutions

Even though arbitral awards are de jure recognised and enforceable in most countries globally, they need to be more efficiently applied in practice, and better understood. Arbitration solutions are binding by means of an agreement or a contract submitted to the parties before the start of proceedings. This ultimately requires statutory enforcement measures via formal judicial systems if (one of) the parties does not meet the agreed conditions. Some respondents proposed the simplification of procedures and the explanation of the relevant laws that apply, in order to discourage parties from bringing the case before a court. Equally, this aims at encouraging adherence to the outcome and to discourage its violation. After all, non-adherence to the decision may have serious consequences and not all parties are aware of this.

CONCLUDING REMARKS

More research is needed on the main features, modi operandi, challenges and potential of ADR methods. This Effectius’ survey provides additional insights based on an international and cross-sector study on ADR mechanisms. It provides new findings on how responding ADR providers organise themselves, the main differences and difficulties they face – and potential solutions found.

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Alternative Dispute Resolution : Survey analysis

We sincerely hope that this survey also shows that ADR organisations face quite similar difficulties throughout the world. To us, it strengthens our commitment to stress the need to exchange best practices and challenges between different organisations, regardless of their different specialisations and ideologies. Exchanging both challenges as well as solutions can allow ADR service providers to improve their individual capacities. It also allows to address the common goal of rendering access to justice more efficient, flexible, feasible and equitable with more confidence. In short, ADR service providers must work together to demonstrate that ADR can be a very valuable component of an effective justice system.

Nina Laurinkari and Ludovica Bello Published as part of the Effectius Newsletter, Issue 13, (2011)

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