Ask any law firm in Perth and they will tell you that being party to a business dispute can be emotionally and financially draining, and can seriously harm your business operations. And while business disputes are common in any industry, knowing how to resolve the issue can be difficult.
In this blog, we discuss the advantages of alternative dispute resolution (ADR) and how it can help cut costs and speed up the resolution process, allowing businesses to get back on their feet and resume operations.
Whether you’re a business manager, owner, or executive, read on to find out how ADR can assist you to resolve disputes.
What is alternative dispute resolution?
Alternative dispute resolution or ADR, is a process designed to assist willing parties to resolve an issue without the involvement of a court. When successful, ADR is an affordable alternative to traditional litigation and can mean that the parties concerned avoid what would normally be lengthy and costly legal procedures.
In practice, ADR is a way for disputing parties to find workable solutions that resolve the issue at hand. This is administered by legal professionals who have extensive legal experience and can include a broad range of techniques and processes, including mediation, conciliation, early neutral evaluation, case appraisal, referee involvement, case conferencing, arbitration and negotiation (more on this soon).
Benefits of alternative dispute resolution Western Australia
Alternative dispute resolution benefits both (or all, depending on the number of parties) parties involved in the process and can provide the grounds for resolution without the added costs, time and even reputational damage that come with fully-fledged litigation. Here are some of the main benefits to disputing parties:
Affordable
ADR is usually significantly cheaper than going to court and can be a lifesaver for smaller businesses that cannot afford to hire legal representation on an ongoing basis.
Fast
ADR can produce results quickly and easily, although there must be a willingness on both sides to come to an agreement. ADR also benefits from not being weighed down by the bureaucracy of the courts which also increases the efficiency of the process.
Confidential
For small and medium businesses, reputation means everything and going to court can often put long-established relationships on the line. For many business owners, ADR allows the narrative to be controlled and interests protected.
Flexible
Dispute resolution sessions are not bound by any court working hours, and can happen online, and in more user-friendly formats. This can mean that day-to-day operations may continue in the background while the dispute is being resolved.
How does ADR compare to traditional litigation?
ADR can be appealing to businesses looking to avoid court proceedings. Here are the main points of difference when compared to traditional litigation:
Cost
For cost-sensitive small businesses, ADR provides the tools and space to reach simple and durable solutions at a lesser cost than going to court. Small WA businesses that rely on daytime traffic can also stand to save money by scheduling ADR for after hours to ensure that business may go on.
Time
Compared to traditional litigation, ADR has the advantage of not being reliant on a third party (i.e., the courts) to decide – and instead, ADR allows disputing parties to take initiative in order to reach workable solutions. ADR can also take place in non-traditional formats like online or at short notice, meaning that the chances of finding a timely resolution are higher.
Outcome
No matter their position, WA businesses involved in disputes have the opportunity to find mutually agreeable resolutions. Compared to judgements issued by the courts, ADR produces outcomes where both parties can stand to gain, rather than defining a clear winner and loser per se. And once an agreement has been reached, there is always the possibility to sign a binding agreement in order to formalise the outcome.
What to expect from ADR
Depending on the circumstances, different types of alternative dispute resolution may be required to arrive at a resolution. Here are the fundamentals:
Mediation
Mediation is where an impartial third party is brought in to assist disputing businesses to come to an agreement or settlement that is acceptable to all parties involved. The mediator works to create an environment where parties can express their concerns, interests and needs freely, without fear of retaliation, and facilitates communication and negotiation between them to help them reach a mutually satisfactory outcome.
Arbitration
Sometimes, businesses party to the dispute are unable to make decisions or arrive at resolutions on their own – or with support from mediation. This is where arbitration can make a difference. This process involves the appointment of an independent arbiter who listens to the arguments and evidence presented by each side and then makes a binding decision on the matter.
The parties agree in advance to abide by the decision made by the arbitrator, which can be enforced by law. Unlike mediation, arbitration involves a decision-maker who has the authority (given by the disputing parties) to resolve the dispute.
Negotiation
Business disputes are often characterised by conflicting wants and needs of two or more parties and sometimes engaging in an old-fashioned trade-off can help solve the issue. Negotiations can therefore involve compromises, concessions, and trade-offs to arrive at a solution that is acceptable to all parties.
The negotiation process can be informal or formal and may be facilitated by a third party, such as a mediator or arbitrator. For negotiation to work, it requires effective communication, active listening, and a willingness to understand the other party’s perspective.
Get started with ADR today,
As a business owner or manager, it’s essential to be aware of ADR processes, so you can take advantage of them when needed.
At Solomon Hollett Lawyers, our commercial dispute lawyers specialise in ADR processes and can help you resolve your business disputes efficiently and confidentially. Don’t let disputes harm your business, contact us today for a free 15 minute consultation. Let us help you get back to doing what you do best – running your business.
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Craig Hollett is a highly regarded and well-versed commercial litigator with over 20 years’ experience. Craig’s extensive experience includes commercial and contractual disputes, building and construction, general commercial litigation, debt recovery, bankruptcy and insolvency, insurance law, professional indemnity and liability, defamation, mortgage enforcement, vocational disciplinary proceedings, OH&S prosecutions and public liability.