Rabia Mustafa

Any method or process of resolving conflicts by a neutral third party, such as a mediator or arbitrator outside of court or without litigation process is referred to as Alternative Dispute Resolution (ADR). The word ‘alternative’ is itself self-explanatory. Negotiation, conciliation, mediation, and arbitration are included in ADR. Compared to traditional court proceedings, these procedures are typically more private, informal, and stress-free.

How ADR works?

As ADR is intended to resolve conflicts without the involvement of a judge or jury, this route is typically open whenever efforts between the client and the insurer to address any disagreements among themselves have failed and come to an impasse.

Definitions of Key Terms of Alternative Dispute Resolution

Arbitration: The decision is made by an impartial third party known as an “arbitrator” after hearing the arguments and supporting documentation from each side. Compared to a trial, arbitration is less formal, and the rules of evidence are frequently eased. In a binding arbitration, the parties consent to the arbitrator’s ruling being considered final, and an appeals process is typically not available. If the parties to nonbinding arbitration disagree with the arbitrator’s ruling, they may request for a trial.

Mediation: An impartial third party known as a “mediator” assists the parties in their efforts to come to a mutually agreeable resolution of the conflict. Instead of making a decision, the mediator facilitates communication between the parties so that they can try to resolve the conflict on their own. When family members, neighbours, or business partners are involved, mediation may be especially helpful. If one side has a sizable advantage in power or control over the other, mediation might not be the best course of action.

Reconciliation: This is the act of harmonizing differences and settling disputes. Here parties to a dispute confer with each other and reach an agreement on how to restore or bring back harmony in their relationship. Reconciliation is a form of ADR where parties look for a resolution of their dispute on a voluntary basis, assisted by a reconciler.

Neutral Evaluation: In an effort to facilitate settlement, a neutral party with subject-matter experience and expertise hears abbreviated arguments, assesses the advantages and disadvantages of each side’s case, and provides an assessment of likely court outcomes. With the parties’ permission, the neutral evaluator may also offer case planning advice and settlement assistance.

Settlement Conferencing: Before proceeding to trial, the parties and their counsel meet with the court or the judge’s representative in settlement conference to try to resolve some or all of the matters at issue. The focus is on narrowing the specific matters in dispute, and parties’ participation is limited.

Negotiation: The preeminent mode of resolving disputes is through negotiation. Although the two most popular ADR methods are arbitration and mediation, negotiation is nearly often used to settle disputes first. Through negotiation, a problem can be resolved by getting the parties together. The primary benefit of this method of dispute resolution is that it gives the parties themselves the ability to direct the course of action and the resolution. Compared to other forms of ADR, negotiation is far less formal and offers a lot more freedom.

Advantages of ADR

  1. ADR is Cost Effective: This indicates that ADR is comparably less expensive than litigation since there would be less fees incurred by the parties in the determination of their dispute.
  2. ADR is Speedy: Non-adjudicatory methods of dispute resolution are fast, save time, and do not involve the delays and uncertainties as compared to the adjudicatory method of dispute resolution, which takes time to decide a case or settle a legal dispute.
  3. It is flexible: This is because parties have the freedom to choose the procedural norms that will govern their disagreement and they have the authority to decide their own fate rather than ceding that authority to an adjudicator. Parties can even choose their own arbitrator or mediator. ADR is also exempt from court formalities including the rules of evidence, witness, consequential delays, and everything else.
  4. Alternative Dispute Resolution (ADR) encourages cooperation by allowing the parties to collaborate with the impartial arbitrator or mediator to settle the conflict and find a solution that is agreeable to all sides.
  5. Technical Expertise: In arbitration, the arbitrator is an impartial expert with technical knowledge of the dispute at hand. As such, he or she is a specialist in the subject matter and has previous experience with the arbitral procedure. In contrast to the adjudicatory technique, where a judge might not be familiar with all of the technical details of the case at hand, he will be able to administer justice effectively and expeditiously.
  6. Perpetual Solution: Contrary to an issue settled through formal adjudication, the parties, in general, resort to a cycle of litigation, preferring appeals and reviews. However, a matter settled through Mediation is resolved perpetually which also removes conflict between the parties.
  7. Confidential nature of ADR proceedings: The result achieved during the negotiation or arbitrator hearing is typically kept confidential by the parties. Since the majority of trials and processes in an adjudicatory manner are open to the public and press, this is not possible. Because ADR is secret, they are free to concentrate on the dispute’s merits without worrying about how it will be received by the public.

Why it is much needed in Pakistan

The development of ADR over the past few decades reflects both an effort to encourage a less formal conflict settlement process and, on the one hand, dissatisfaction with the formal court system that is known for its delays. There is no legal philosophy behind this evolution. Instead, it was required by the expansion of business litigation that required quick resolution, by the continuous rise in court workload, by the weighting of court dockets, and by the imbalance in the judge-to-case ratio as a result of scarce resources.

The following statistics, published by the Law and Justice Commission of Pakistan, in its report ‘Judicial Statistics of Pakistan 2020’, present a clear picture of the workload on courts, the number of pending cases in Pakistan, and the imbalance of judge-to-case ratio:

The above-mentioned number of cases in each court shows how many new cases are registered each year, how many cases have been decided, and resultantly the number of pending cases is increasing daily. For instance, during the year 2020, in the Supreme Court of Pakistan, 16,755 new cases were filed, 13,055 cases were decided whereas 42,998 cases were pending. The total number of undecided cases was 46,698. If we see the grand total of all the compiled cases of the Supreme Court, High Courts, and District Courts, 3,057,594 cases were decided when 1,824,386 cases were already pending. However, in the same year, the number of new cases was more than the decided ones i.e. 3,316,242. Ultimately, the grand total number of pending cases became 2,151,834. It means 2,151,834 cases were yet to decide before the start of the New Year. The end result of this analysis indicates that there is a need to find a solution to decide these cases which are piling up year by year. ADR is the solution for the speedy process and to ease the workload on courts. The awareness of the process of ADR among the general public must be there so that they know what could be the ‘Alternate Solution’ of their disputes.

In short, ADR can be understood in the following summarized way:

  • Insured clients who are denied a claim are offered this path as an alternative to expensive and time-consuming litigation.
  • Alternative dispute resolution (ADR) offers to settle disputes outside of the courtroom with the help of an impartial third party.

Outcomes may be non-binding and advisory in nature or enforceable without the right to appeal.

Writer is a Senior Research Fellow at the School for Law and Development

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