Is Arbitration within the remit of ADR?

A question posed by the blogger (Chinwe Stella Egbunike-Umegbolu) on member connect. resolution. institute. See links below: 

  • https://memberconnect.resolution.institute/browse/allrecentposts
  • https://memberconnect.resolution.institute/communities/community-home/digestviewer/viewthread?GroupId=25&MessageKey=6a63b726-7b39-418f-9be4-af2c0ab724f2&CommunityKey=ca3c9f1c-d081-4b93-bd77-b2041de7b451&tab=digestviewer&ReturnUrl=%2fbrowse%2fallrecentposts
Professor Emilia Nneka Onyema pointed out on Expert Views on ADR (EVA)
‘that quite a lot of Arbitration lawyers like herself will not consider Arbitration as falling within ADR because it is a process wherein a third party decides or makes a decision for the parties, unlike Mediation or Conciliation where the third (3rd) party supports the parties or the disputants to decide for themselves.’
What is your take on the above-stated statement?  Do you Agree or Disagree?
Excerpt from Episode15: Careers in ADR with Professor Emilia Onyema
https://memberconnect.resolution.institute/blogs/chinwe-umegbolu1/2021/03/19/careers-in-adr
https://anchor.fm/chinwe1/episodes/Episode-15–Careers-in-ADR-with-Professor-Emilia-Onyema-escm0e

 

  • Members responses:
1.  RE: Is Arbitration within the remit of ADR?
Arbitration is the pinnacle of ‘determinative’ ADR.  It is the most formal of the processes which parties submit to when they are unable to resolve matters themselves.
Mediation is the first step where an independent third person attempts to encourage parties to dissect the dispute and see the strengths and weaknesses of their position and the need to compromise.
Conciliation attempts the same but offers an opinion on the solution if the parties are intransigent.  This is akin to a Dispute Board ‘recommendation’ although the latter may be more formal.
The next step in ‘resolution’ is a binding third party determination – this may be ‘interim binding’ as is the case with Adjudication, or Dispute Boards or an Expert Determination with monetary limits.
Failing all of these, there is ‘final and binding arbitration.
Remember, the processes we are discussing are intended to achieve ‘resolution’ outside the Courts.-

2.  RE: Is Arbitration within the remit of ADR?

D.B
Posted 15 days ago

One thing that I don’t think that anyone has mentioned yet, is that the arbitration process in international arbitration is completely confidential. That even extends to the award not being made public unless it needs to be enforced or is subject to appeal. I think this clearly makes it an alternative process to court trials and decisions and is perhaps one of the main reasons why it has been embraced by parties to commercial disputes.

3.  RE: Is Arbitration within the remit of ADR?

Posted 15 days ago

I think the point that emerges from this discussion is that the term “arbitration” itself is not homogenous.  It comes in many shapes and forms and some of them may come within the purview of ADR and others may not.  The point that David Baldry has made is a good one, that is, that arbitration, especially international arbitration, is a confidential process and even the award is confidential in some circumstances.  In some jurisdictions, such as applies in NSW under section 38 of the Civil Procedure Act, 2005 (NSW), there is compulsory court-annexed arbitration provision which is anything but confidential or voluntary and pursuant to the Act and the Rules of Court, the Court may refer any matter out to arbitration for hearing by a court-appointed arbitrator.  The award, which becomes a judgment of the court after 28 days, is as public as any other judgment and there is very little to distinguish that arbitration process from a hearing in open court.  Nevertheless, the court system refers to it as “an ADR process” which I think is inaccurate in the circumstances.  In Wes Trac Pty Ltd v East Coast OTR Tyres Pty Ltd [2008] NSWSC 894 at [38] Barret J pondered why such arbitrations are diminishing in popularity and concluded that one reason is that the arbitral award “…can be displaced virtually at the whim of a party and replaced by a judicial process and a judicial determination.”  Whilst His Honour was there dealing with Supreme Court arbitrations, my own anecdotal experience suggests that, in the Local Court at least where magistrates deal with a busy criminal list every day, the court-annexed arbitration system for civil cases is as popular as ever.  I have delivered more than a hundred arbitral awards, only one of which was disturbed on a rehearing.  This process is quite different from arbitrations conducted under the Commercial Arbitration acts and from International Arbitrations and it may be that we need to acknowledge that some arbitrations may come under the ADR banner and some may not.

4.  RE: Is Arbitration within the remit of ADR?

  1. (of one or more things) available as another possibility or choice.

2.  relating to activities that depart from or challenge traditional norms.

Arbitration certainly meets the first part of the definition of ‘alternative’ in that it is another way of having your matter determined by someone authorised to impose a solution. Judicial determination and arbitration are part of the same genre albeit with differing procedures.

Arbitration does not meet the second part of the definition.

Arbitration has been an integral part of the traditional norms of our Western judicial system since the Common-Law Procedure Act (UK) 1854. It has been prominent in Australian jurisdictions since the late 19th century and throughout the 20th century. It, like judicial determination, has become the traditional norm.

It is the introduction of mediation in the latter part of the 20th century that has seen a fundamental departure from this traditional norm. The term ADR arose directly out of this development.

The process of imposing a result on the parties being expressly excluded in the mediation approach has been the fundamental departure.

Therefore, arbitration can call itself ADR if it likes but mediation (using the broad Singapore Convention definition) is the more accurate representation of what has become known as ADR.

5.  RE: Is Arbitration within the remit of ADR?
M. K
The different views all have merit and turn on the defn of adr used-in my world i try to talk about the spectrum of DR options from unassisted direct discussions thru to litigation. So does the answer have any real significance?-Arb.is closest to litigation on the spectrum it is
different as it is private and parties can Decide or have a hand in deciding who will be deciding.More like expert determination——————————

6.  RE: Is Arbitration within the remit of ADR?

Thanks, M and G for your responses to this question.  I enjoyed reading your thoughts.

7.  RE: Is Arbitration within the remit of ADR?

Posted 16 days ago

That is an interesting question that has certainly occupied the minds of dispute resolution theorists over time.  It would appear from the evidence that the official court view is that arbitration is encompassed as a form of ADR.  Paragraph 8 of the Local Court of NSW Practice Note Civ. 1 speaks of referral to compulsory arbitration under the heading of “Alternative Dispute Resolution.”  Other NSW Court practice notes speak of “referral to arbitration or some other form of ADR.”  Outside the court system arbitrations, although comprising a determinative rules-based process, nevertheless involve an element of disputant choice.  For example, in many cases, the parties either agree to arbitrate their dispute or they have agreed pursuant to some earlier contract that they will arbitrate any dispute.  They agree on the selection and appointment of an arbitrator and they usually agree on the time and place of the arbitration.  Few of these options are available in a strictly litigated environment.  Notwithstanding all of this, my own view is that arbitration is not an alternative dispute resolution.  It is litigating in another room.  This is because, ultimately, it is a rules-based determination of a dispute by a third party who considers the dispute on the basis of evidence and makes a binding determination.   The parties themselves play no part in the decision-making process except by way of evidence in which they attempt to persuade the decision-maker of their case.  The decision-maker merely makes a determination on the evidence and provides a reason for the determination.  In my view that is not ADR.  My own arbitration practice comprises receiving cases from the court in respect of which I am expected to make procedural directions, hear the case, provide reasons for the award and return the file to the court.  There is no voluntary component of the process at all (except perhaps to have the matter reheard before the court if they are dissatisfied with my decision).

8.  RE: Is Arbitration within the remit of ADR?

Posted 16 days ago

9.  RE: Is Arbitration within the remit of ADR?

Posted 16 days ago

Depends on what you mean by “Alternative” in ADR.

Traditionally, “alternative” has meant an alternative to the courts. In that sense, arbitration is ADR because it’s not a court resolving the dispute.

However, the author seems to equate “alternative” with “facilitative” and that “determinative” forms of ADR (arbitration, adjudication, expert determination etc) are not “alternative” because a third party imposes a binding (final or interim) decision. This is a view, but it’s not my view.

Or, perhaps because the conduct of many arbitrations is similar to the conduct of a court case, the author sees them as the “same” and therefore not “alternative” meaning “different”. This is a definition that alternative can bear but it’s not how it’s used in the phrase “Alternative Dispute Resolution”.

10.  RE: Is Arbitration within the remit of ADR?

D, you took the words right off my keyboard. I agree 100% with your response. T.

11. RE: Is Arbitration within the remit of ADR?

I feel Arbitration falls within ADR. I view thee, Arbitrator, as one of the disputing parties, albeit having no interest in the decision other than its fairness. The arbitrator is open to being pursued by the parties, often independently of ‘black letter law’ technicalities or constraints. The parties, therefore, are the facilitators and the Arbitrator one who makes a decision they (the mediator) can live with, without that decision’s exceeding the mediator’s authority. A judge on the other hand although having a somewhat similar role has to consider legislation, precedents and the possibility of appeals.

12.  RE: Is Arbitration within the remit of ADR?

Hi P,
I agree with your basic premise, however, from my arbitration training, just like a judge, arbitrators “must consider legislation, precedents and possibility of appeals.”
The difference, IMO, is that arbitrators may consider and agree with any resolution that the parties arrive at and write the (confidential) agreement/award accordingly. This might occur in a mediation session within the arbitration process.
Arbitration is ADR because it has this flexibility (to use the parties’ resolution) that a judge may not have.——————————

13.  RE: Is Arbitration within the remit of ADR?
D.D
Posted 16 days ago

As Dale said, it all depends on the definition of ADR. Traditionally, this was Alternative (to litigation in court) Dispute Resolution. Then, some suggested that it should be ‘Amicable Dispute Resolution’, while others suggested ‘Appropriate Dispute Resolution. Each term implied that everything and anything is better than litigating in the courts where the parties have no control over the process and no say in the outcome. This misconception only adds to an already divided perception of what has become a system of various processes all serving the same scope of managing disputes. Today the range of various facilitative and determinative processes recognised and supported by legislation and the courts are equally part of this system that in most cases allows parties to manage their dispute in a way that best serves that dispute. Courts are an integral part of this system and their processes now incorporate many steps that not too long ago were only available in the ‘Alternative’ processes. It may be time to move on with the terminology to better reflect the changing reality of dispute management overall.

 

14.  RE: Is Arbitration within the remit of ADR?

“time to move on with the terminology”? I disagree. I wouldn’t want to start behaving like a government department, wasting resources (member time, RI funds) on changing names. I think that’s missing the point. A good definition is always helpful.

15.  RE: Is Arbitration within the remit of ADR?

Posted 16 days ago

Tess, I was not suggesting for RI to invest resources in changing names for the sake of changing names. It may happen organically in practice if updated definitions no longer match the terminology used. All I implied was to allow for the beautiful flexibility that is characteristic of the field to change terms too to best reflect reality. But you are right; a good definition is important and may solve inconsistencies just as well.

16.  RE: Is Arbitration within the remit of ADR?

Posted 16 days ago

ADR and the word ‘alternative’ can mean whatever you want it to mean.

For the legal profession ADR often means an Alarming Drop in Revenue and for the judiciary, an Alarming Drop in Relevance.

ADR /Mediation has certainly shaken up the Centuries-old litigious dispute resolution model. It is now a mere shadow of its former self in terms of participation.

We now have judges in the Federal Circuit Court and in state Supreme Court’s (SA) sitting as mediators in their own courts although referring un-resolved matters back to other members of the bench to make a determination. Are the courts now turning ADR too ??

It’s interesting that arbitrators want to market themselves or be seen to align with the broader ADR community rather than being seen as a legitimate alternative to litigation.

It seems everyone is now ADR.

The Singapore Convention created a line in the sand, in my view. On one side is mediation and on the other side arbitration/judicial determination. Both sides should be comfortable in their own skin.

 

17.  RE: Is Arbitration within the remit of ADR?

Hi G, that’s an interesting comment:
“We now have judges in the Federal Circuit Court and in state Supreme Court’s (SA) sitting as mediators in their own courts although referring un-resolved matters back to other members of the bench to make a determination.”Can you give a deidentified example?——————————

18.  RE: Is Arbitration within the remit of ADR?

Two sitting South Australian Supreme Court Judges/Masters conduct in-house mediation particularly in relation to contested estates matters and other noncriminal matters.

In the Canadian province of Québec, judges have been performing judicial mediation for decades. Research has disclosed that litigants have been delaying settlement until they are able to access a free judicial mediator. It has killed the private mediation profession and has not resulted in lowering the cost of justice as compared to jurisdictions where private mediation has flourished.

Parties have somehow got it into their head that a judge mediator must be better than a non-judge mediator. Maybe just because it’s free!

19.  RE: Is Arbitration within the remit of ADR?

Silver Member
Posted 14 days ago
Thank you all for your contributions. Though they are divergent views, they all raised valid points.
Hence there is a need for more research on the above subject matter… possibly get every one of you on the show to discuss further. :)Many thanks.——————————

20.  RE: Is Arbitration within the remit of ADR?

Posted 13 days ago

I have had some issues logging on and been busy with both facilitative and determinative DR. D has said quite well what I would have. I also agree with B and D.

Whether alternative, amicable or appropriate, it is an alternative to litigation. Although litigation may be appropriate in some cases.

I used the acronym ‘DR’ instead of ‘ADR’ above, but it was tongue-in-cheek.

Many firms now use DR instead of litigation for their dispute resolution services. Some who believe that ADR should be only amicable or facilitative would say ADR and Arbitration to encompass both, as has done the ICC. This is really limited to mediation and arbitration and possibly dispute boards and does not cover the whole gamut means of resolving disputes that are alternatives to litigation. In teaching or advising clients, I too tend to explain the spectrum. This is particularly important at the contract drafting stage when deciding which form or forms to include.

21RE: Is Arbitration within the remit of ADR?

Posted 12 days ago
True a third party makes a decision in ‘Arbitration’ but it is not always if at all a judicial style decision. In fact, the arbitrator tries to find a middle ground or ‘a decision both parties can live with’. we all know that the court may concede some points to one party but it is seldom a ‘drawn game’. I make the point again it is based on highlighting and explaining interests to the parties. It has more in common with evaluative mediation than litigation and arguably expert determination.
Finally, the whole of ADR can tend to be a practice in search of a theory, whereas the aim is to find alternatives to litigation.——————————

22.  RE: Is Arbitration within the remit of ADR?

Posted 12 days ago

Hi. I have always thought of the word “alternative” in Alternative Dispute Resolution as meaning an alternative to litigation before a court, in Australia a Chapter lll court in the Australian Constitution. So I have thought of the Fair Work Commission (and its predecessor institutions) as an ADR institution. All arbitration is not the same. There is mandatory arbitration, private arbitration, Med-Arb, non-binding recommendations etc. Aren’t they all at the upper end of a continuum from non- determinative to determinative processes outside the court system, with facilitative mediation at the lower end of the continuum?

23. Is Arbitration within the remit of ADR?
Jul 17, 2021 9:51 PM
G.R:
I suggest that determinative processes are more to do with resolution whereas non-determinative processes are about evolution. The latter is a genuine alternative to traditional litigation and its little brother arbitration.
In a complex post-industrial world where the connections between things are more important than the things themselves, it is a process where parties face each other without interruptive layers proffered by lawyers (disintermediation)  that opens the door to new possibilities and serendipity.
Cutting a deal based on the opinion of one lawyer just doesn’t cut it.
24.  Is Arbitration within the remit of ADR?
Original Message:
Sent: 17-07-2021 07:50 PM
From: P. A
Subject: Is Arbitration not within the remit of ADR?I agree with B.  There is a continuum.  Indeed the diversity of issues discussed at our International Conference this week illustrated the point well.  Both facilitative and determinative processes were well represented.  And hybrids are no less properly described as ADR.  In my view, the hallmark of a skilled ADR practitioner is to move up and down the continuum, as needed in the process of resolving a dispute.  Even med-arb-med is ADR – the notion that the middle phase doesn’t seem to be distinctly odd, even if it is unusual.
Jul 18, 2021, 3:10 PM
Donna Ross
International ADR Practitioner
Donna Ross Dispute Resolution
Melbourne VIC
Whether ADR is additional, appropriate or alternative – or amicable, hence the reference by Professor Onyema to the fact that ADR does not include arbitration, which is why some call the whole spectrum Arbitration and ADR – it should include ALL methods outside of litigation, including negotiation.

As to agreements for expert determination, I have always seen included the expert is not an arbitrator. whether the issue to be determined is a contractual or legal one does not change the legal status of the neutral. ED, as it is inaptly abbreviated, is not governed by the CAAs. This goes beyond the mere binding nature of the ultimate determination.

25. Is Arbitration within the remit of ADR?
Original Message:
Sent: 18-07-2021 02:52 PM
From: B.T
Subject: Is Arbitration not within the remit of ADR?
J,
In NSW, the state government condition of contract used for most projects is GC21.  It has expert determination as to its primary dispute resolution mechanism but the determination is generally only final and binding if the amount to be paid from one party to another is less than $500,000.   In most of the EDs that I do, that limit is exceeded and there is the option to litigate.  However, having got a (hopefully well-reasoned) determination, few matters do proceed to litigation.
You raise an interesting observation regarding the role of the determiner as an ‘expert’ and not as an ‘arbitrator’.
In most cases that I have done recently, there is more legal expertise required than technical knowledge.  Often in NSW, the appointed ‘expert’ is a barrister or retired judge.  What then does acting as an ‘expert’ mean compared with acting as an “arbitrator’.  It avoids legal challenges to the determination which often follow from an arbitral award.
Jul 19, 2021 1:01 PM
D.M
The determinative end of ADR can be a knock-down, drag-em-out, winner-takes-all fight to the finish. While it can serve as a circuit breaker and allow a relationship to reset, it can also burn bridges and bring a relationship to an acrimonious end.

And, sometimes, that’s what you want.

Not all business interactions are relationship-based – many are purely transactional, you make money on this deal or not at all. Even where business is relational, some relationships are toxic, and, if you are going to get out, you might as well take as much loot as you can grab.

——————————
D. M

——————————

——————————————-
Original Message:
Sent: 19-07-2021 11:51 AM
From: G.R
Subject: Is Arbitration not within the remit of ADR?

Although this appears to be one of those frustrating definitional debates there is a serious underlying principle we are traversing.

I take the view that litigation, arbitration, expert determination, dispute boards, adjudication, referee, mini-trial and other determinative processes are all the same horse but with different jockeys.  The ultimate decision is contracted out to an intermediary.

The alternative is to make the decision in-house so to speak. Whether this be mediation or in the case of major projects, Project Alliancing.
Project Alliances allow all parties an equal say in any decisions and all issues must be resolved without recourse to litigation.  All decisions are made by an Alliance Board made up of one representative from the owner and each non-owner participant. All decisions must be made unanimously with no abstentions. It is a holistic approach that gives it amazing flexibility in times of disagreement.
Everyone is equally responsible for the problems and the solutions. It has a proven record of better than ‘business as usual’ outcomes.  There is no need for dispute boards, dispute resolution clauses or referees as is self-directing.
Both mediation and Project Alliances fit with the whole movement towards disintermediation particularly with the removal of intermediaries in economics, supply chains, management, field ethnography and, dare I say, the law and politics.
In addition, there is a whole rewilding movement in nature, economics and society in general. Mediation and Project Alliances and other non-deterministic approaches to conflict are a way for the law to re-wild itself in a post-ordered industrial legal and commercial world that has disappeared. The world is now a more fluid and interconnected place. A lot wilder.
Litigation has lost its commercial value not because mediation is an attractive product that everyone is rushing to buy nor is it because the judiciary and the legal profession have suddenly become incompetent. It is because the world has changed.  Generals generally tend to fight the last war.  The legal profession needs to be careful that it is not doing the same.
REFERENCE:
Posted on the Discussion thread Memberconnect. resolution.institute. Australia / Sydney- 2021
https://memberconnect.resolution.institute/communities/community-home/digestviewer/viewthread?MessageKey=8e37382c-390f-40ac-b887-fc5a26bbbe40&CommunityKey=ca3c9f1c-d081-4b93-bd77-b2041de7b451&tab=digestviewer#bm8e37382c-390f-40ac-b887-fc5a26bbbe40

 

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