U.S. Alternatives to Arbitration
Changes in the law and in business practices come slowly, and they develop unevenly from country to country. Nowhere is this observation more true than in the field of alternative dispute resolution, or ADR.
It is an interesting phenomenon that ADR started in the United States and had already reached a fairly high level of development before it began to be exported into other countries and areas of the world.
Until the advent of "modern" or "American style" ADR, the traditional alternative to court throughout the world has been arbitration. Arbitration has long been used in business and commerce as an expert, private, informal and relatively inexpensive binding dispute resolution alternative to formal litigation. But over time, arbitration has become more formal and "legalized" to the point at which, in the United States, it has begun to be regarded as almost as expensive as court.
In reaction to the high-cost, adversary and "win-lose" features of arbitration, American businesses, during the past two decades, have increasingly turned to the use of mediation and a variety of other ADR techniques as alternatives to arbitration. Under the guidance and support of such groups as the Harvard Negotiation Project, the Center for Public Resources and - despite its name - the American Arbitration Association, uses of mediation and other consensual dispute resolution techniques have increased, and nonbinding dispute resolution has now reached a relatively high state of development in the U.S. business world.
This trend has been accelerated by the American construction industry, long regarded as a pioneer and innovator in nonjudicial conflict resolution. These developments in the United States have continued to move the dispute resolution process upstream - closer to the sources of disputes - by developing new techniques for early or "real time" resolution of disputes, control of disputes at the source, and even their prevention and avoidance. As a result, ADR is now firmly established in American business as a respected way to avoid the transaction costs of conflict and to preserve business relationships.
Significantly, other countries have been relatively slow to embrace these new ADR techniques, and the American commitment to ADR is only now beginning to be replicated in other countries. In the international business community, arbitration has continued to be the almost exclusive method of dispute resolution.
Recently in Europe, however, criticism of the high costs and delays of international arbitration has increased.1 In recent years, therefore, there has developed a growing interest around the world in studying American ADR techniques, particularly mediation and its variations, as alternatives to arbitration.
But progress has been slow. In an article on ADR published this year, the distinguished English barrister, scholar and author Arthur L. Marriott reported that the principal uses of mediation in England have been limited to labor disputes, divorce and family issues, but he noted that "there is growing interest in mediation of civil and commercial matters." He pointed out that "the use of mediation in the private sector in civil and commercial disputes is very much in its infancy," and that "it is clear that mediation of such disputes in the private sector...is more talked about than practiced."
As the rest of the world seeks to learn about these methods, U.S. business lawyers and other dispute resolution experts will continue to be in great demand abroad as designers and architects of systems to prevent, control - or at least achieve an early resolution of - disputes, and as trainers of neutrals and advocates in the implementation of these concepts.
- (1) Alan Redfern and Martin Hunter, Law and Practice of International
- Commercial Arbitration 248 (Sweet & Maxwell 1991).
- (2) Arthur L. Marriott, "Alternative Dispute Resolution," in Ronald Bernstein, John Tackaberry and Arthur L. Marriott, Handbook of Arbitration Practice 581, 589-590 (Sweet & Maxwell 1998).
Reprinted with permission from the October 5, 1998 issue of The National Law Journal. Copyright 1998, NLP IP Company. All rights reserved.
This article is intended to provide the reader with general information and should not be considered a substitute for specific legal advice or opinion. Readers are advised not to act upon this information without seeking professional counsel.)
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