Alternative Dispute Resolution (“ADR”)
Courts were established under the Irish Constitution of 1937 and the Constitution provides that save for such special and limited circumstances as may be prescribed by law, justice shall be administered in public. As an alternative to going to court as a means of resolving disputes, parties may consider the alternatives methods of resolving disputes, known as Alternative Dispute Resolution (“ADR”). ADR is dealt with in private and thus preserving confidentiality regarding the dispute.
The following are examples of the principal methods of alternative dispute resolution:
This is a very common approach to resolving a dispute whereby the parties, with or without their legal advisors, will meet and endeavor to reach a solution to the dispute
Both parties involved in the dispute agree to use a neutral third party to help solve the dispute. The terms of the agreement are decided between the parties with the help of the mediator. Generally, decisions made in mediation are legally binding if both parties agree to it. Since 1st January 2018, mediations are governed by the Mediation Act 2017.
What is Commercial Mediation
Commercial Mediation is a private and confidential dispute resolution process in which an independent and neutral third party (the Mediator) seeks to help the parties to reach a mutually acceptable negotiated agreement.
Before the process commences there is a level of briefing the Mediator of the dispute. Depending on the complexity of the dispute, process can take a day or longer, many straight forward disputes will be resolved in a one day session.
The Mediation is attended by a ‘decision maker’ for each party as well as their legal advisors, relevant experts and insurers (if any). Not all commercial mediation disputes has experts, sometimes just the disputing parties.
The process is voluntary and either party can withdraw at any time. However, if a settlement is reached it is legally binding.
Role of the Mediator
The Mediator is a facilitator appointed by the parties. The Mediator does not decide who is right or wrong or issue a judgment in favour of one party. The Mediator’s function is to support the process, gather information and assist in problem-solving. The Mediator seeks to isolate the issues, help the parties to evaluate the strengths and weaknesses of each other’s case and encourage the parties to work co-operatively towards settlement. This is done in private meetings between the Mediator and each party and as appropriate in joint meetings where both parties (or some of their representatives) attend with the Mediator.
Key Advantages of Commercial Mediation
Control – Confidentiality – Flexibility – Economic alternative to litigation
The Mediation Process
There are 5 phases:
(1) The Preparation Phase – selecting the Mediator and agreeing the terms of the Mediation
(2) The Opening Phase – Many mediations start with the parties meeting in a joint session at which everyone is introduced, the Mediator outlines the procedure
(3) The Exploration Phase – Private meetings take place between each party and the Mediator.
(4) The Negotiation Phase – Direct and indirect negotiations begin with the assistance of the Mediator who challenges each party, in order to explore the strengths and weaknesses of their position.
(5) The Concluding Phase – Lawyers representing both sides draw up the agreement recording the settlement. The mediator will seek to ensure that a Settlement Agreement is both viable and sustainable. The objectives are that the Settlement Agreement satisfies the parties, deals with all the issues, is workable and practical and minimises the possibility of future dispute. Once the settlement is reached, it becomes legally binding.
If No Settlement is Reached
If settlement is not reached at the Mediation it is often reached shortly afterwards. At worst the Mediation will usually assist in a streamlining of the issues in any subsequent litigation or arbitration, as the case may be.
Arbitration is usually but not always, built into legal agreements. Its main advantages to going to court are it can be more speedy and unlike a court the proceedings are private and therefore confidential. Where the parties have not provided for arbitration in their agreement, if the parties are agreeable, they can decide to go to arbitration and have an arbitrator appointed to hear their dispute. The person who is appointed arbitrator to hear the dispute, is usual someone with a professional background of the subject matter in dispute. Ireland adopted the UNICTRAL Model law and arbitrations in Ireland are governed by the Arbitration Act 2010.