Alternative Dispute Resolution

The glossary to the Civil Procedure Rules ("CPR") defines alternative dispute resolution ("ADR") as a "collective description of methods of resolving disputes otherwise than through the normal trial process." The Centre for Effective Dispute Resolution ("CEDR") offers a similar but slightly more focussed definition:

"A body of dispute resolution techniques which avoid the inflexibility of litigation and arbitration, and focus instead on enabling the parties to achieve a better or similar result, with the minimum of direct and indirect cost".

Those methods or techniques include mediation, early neutral evaluation, mini-trial and expert determination as well as a number of hybrids. 

Those processes have at least two things in common. First, they are relatively informal. Secondly, the parties retain far greater control than they would in litigation or arbitration which often enables them to find solutions that would not otherwise be possible. For instance, parties to a design right dispute may agree that someone who is alleged to have infringed a design right may become a supplier or distributor of the design right proprietor to the benefit of both. ADR is not right for every dispute but, where it is, it can save parties considerable time and money and preserve long term business relationships.

Mediation may conveniently be regarded as negotiations conducted by a neutral chairperson known as the mediator. It differs from most other forms of ADR in that the mediator decides nothing. His or her job is simply to guide the parties towards settlement. The technique works because the mediator gains insight into the parties' underlying interests through confidential meetings known as caucuses that usually reveal areas of common ground, mutual advantage or vulnerability not always obvious to those actually involved in the dispute.

In a typical mediation the parties will be asked to present their cases to the mediator and the other side. The object at this stage is to identify the issues. The mediator will then invite each party to discuss particular matters in caucus. He or she will then recall the parties to suggest an analysis of the dispute and an agenda for tacking the issues. Through a succession of joint meetings and caucuses the issues are refined and where possible resolved. The eventual result should be a written agreement possibly in the form of a consent order.

The success rate of mediation is remarkably high. In its article "CEDR Solve mediation statistics 2004", CEDR reported that 75% of all mediations settled in one day or shortly afterwards. 

Early Neutral Evaluation
Early neutral evaluation (
"ENE") is a non-binding opinion by a judge, experienced advocate or litigator or some other person with experience of resolving issues of the kind in dispute as to the likely outcome of the dispute should the matter be litigated or arbitrated. The object of the exercise is to reduce uncertainties as to the merits of the case to facilitate meaningful negotiations or mediation and/or to reduce or clarify the issues in dispute should the matter go to court or arbitration. It is intended to have a salutary effect on recalcitrant parties who might otherwise be tempted to play on the uncertainties that arise in all dispute resolution procedures.

A good example of ENE is offered by the Commercial Court. Section G2 of the
Commercial Court Guide enables the judges of that court to offer ENE wherever it appears likely to assist in the resolution of the dispute or particular issues in it. If the parties accept such an offer a judge may give directions as to the preparatory steps for the evaluation. Should ENE fail to resolve the dispute the judge who gives the evaluation disqualifies himself from taking any further steps in the litigation unless the parties agree otherwise.

The non-binding opinions service on whether a patent is valid and whether it has been infringed offered by the Patent Office since the beginning of October 2005 under s.74A of the Patents Act 1977 can also be regarded as a form of ENE.

A mini-trial is a refinement of ENE in which the neutral is joined by directors, officers, senior employees or other representatives of the parties who have not previously been involved in the dispute. The procedure is used in North America rather more frequently than in England. A good description of the procedure appears in the article "Mini-Trial Procedures" on the American Arbitration Association website.

Expert Determination
The determination of a technical issue by an experienced professional whose expertise, integrity and independence are respected by both sides. The expert reaches his conclusion from his own enquiries, experience and findings and does not attempt to adjudicate between the parties. As his finding is the opinion of an expert and not an adjudication it cannot be appealed or reviewed. Expert determination has long been used in leases where such questions as the allocation of expenses between the landlord and tenants or the extent of repairs are referred to a surveyor. It is nowadays used increasingly frequently in computer supply contracts.

Electronic Commerce and ADR
Because electronic commerce brings people from all over the world into contact, and occasionally conflict, fast and inexpensive ways of resolving disputes between such persons are required. Cross-border litigation is slow and expensive and can only be justified only where substantial interests are involved and at least one of the parties has the means to pay for it. Disputes over registration of domain names is a good example. The costs of a passing off or trade mark action are so high that many trade mark proprietors were prepared to pay substantial ransoms to cyber-squatters.

One response, which has proved to be most successful, is to require registrars of generic top level domain names to insert contract terms obliging applicants for gTLD registrations to refer disputes over registration to a tribunal appointed in accordance with the Internet Corporation for Assigned Names and Numbers ("ICANN") Uniform Domain-Name Dispute-Resolution Policy ("UDRP"). The UDRP has proved to be so successful that many national registrars introduced similar schemes for country code top level domain name disputes. Nominet's Dispute Resolution Service for the UK is a typical example. A similar scheme has been launched by WIPO for disputes between application service providers. 

Art 17 of the electronic commerce directive (Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market) requires EU member states to encourage out of court settlement of on-line disputes.

Organizations offering Dispute Resolution Services
The Chartered Institute of Arbitrators has nearly 10,000 members worldwide promotes and facilitates all forms of dispute resolution. The WIPO Arbitration and Mediation Centre in Geneva provides administrative support for resolution of multi-jurisdictional IP disputes, particularly domain name and ASP disputes. The Association of Northern Mediators is a forum for mediators practising in the North of England.