BEX107 Business Law: Strengths & Limitations of ADR in Commerce

This essay explores the importance, strengths, and limitations of Alternative Dispute Resolution (ADR), particularly in the context of commercial transactions. It highlights ADR's benefits, including greater party control, reduced costs and time compared to litigation, and increased compliance due to party involvement in creating agreements. The essay also addresses potential drawbacks such as loss of control, decreased confidentiality, and reinforcement of power imbalances. It emphasizes the growing use of ADR in various courts, tribunals, and commercial areas, moving beyond a simple alternative to the formal justice system. The discussion includes the concept of equality in ADR, differentiating between formal and substantive equality, and advocating for the latter to ensure fairness and justice for all parties involved. The essay concludes by stating that ADR provides parties with significant control over dispute resolution processes, balancing its benefits against potential problems, and recognizing its value as a method of choice in resolving disputes.

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RESEARCH QUESTION
Alternative dispute resolution (“ADR”) is an important tool …..
Discuss.
Student Name
Institution
Date:

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It needs to be noted in the beginning that Alternative Dispute Resolution (ADR) allows greater
control to the parties to a dispute while resolving the conflict as compared to proceedings in case
of litigation. Generally, ADR is considered as providing certain benefits to the parties. Not only
due to the reason that it is quicker and cheaper as compared to litigation, provides greater control
to the parties to the dispute over the transition and financial costs related with the process of
dispute resolution (Warren, 2010). At the same time, ADR also provides phone and delivers up
to the expectations of the community related with access to justice. It also acts as an accessible
gateway to substantive justice. The rate of compliance is high in case of the comments that have
been implicated by using ADR processes, increasing from the infidel limitations and mediation
and going up to the litigation arbitration, as a result of the involvement of the parties in creating
their own agreements and most probably, in their own words. The confidentiality aspect of ADR
also needs to be noted but at the same time (Douglas, 2001). It also provides ability to the parties
to stay away from the courts. In the center parties can resolve their problems behind closed doors
(King et al., 2009). However, while the agreements that are the result of ADR processes provide
a number of benefits to the parties, the parties may also have a certain problems like they may
lose control over the process, decreasing confidentiality and rising costs. There are those of
flexibility and the chances of maintaining relationship with the other party (Nadja, 2008). At the
same time, the ADR processes can also reinforce the traditional power imbalances and the
perception of secondhand justice, especially from the point of view of the weaker groups of the
society and from the viewpoint of some feminists (Silver, 2009). In this way, while evaluating
the positive and negative points of ADR, it needs to be noted that the ADR provides a wide
range of dispute resolution processes that can keep the parties away from the courts, provide the

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parties to the dispute more control over the resolution of conflict and at the same time, they are
also likely to contribute in saving time and cost for all those involved.
The ADR procedures are missing the Ginsburg angel to reduce the costs and delays that are
present in case of traditional good proceedings. The result is that Australians are looking for a
less formal means of resolving disputes. The government is also trying to reduce the cost of
formal court system. As a result, the size of ADR sector is increasing significantly and it is
expected to continue with this expansion (Downes, 2008). Already ADR procedures are used in
case of different courts and tribunals as well as other organizations that are operating in federal
arena. At the same time, ADR is also being used more frequently at the state level. The influence
of ADR is also increasing in the commercial area. It is extended beyond the individual disputes
and areas like client complaints, enterprise bargaining, employee grievances and industrial
relations. In context of commercial activities, the increasing emphasis is on dispute prevention,
resolution and management. In this way, ADR has moved forward from simply being an
alternative to the formal justice system (Sourdin, 2008).
ADR assist the parties at several different levels. For example in a wide range of potentially
critical and transitional situations, facilitated negotiations can help the parties in identifying
issues and developing different options available to them. As a result of the rising use of video in
Australia, NADRAC had been established in 1995 so that it can provide for the needed
inconsistent policy advice to the Attorney General regarding the development of high-quality,
efficient and economical ways to resolve disputes without looking for a judicial decision
(Abramson, 2005).
The concept of equality in ADR: The idea of equality plays a significant role in our thinking
regarding justice and fairness. One approach the quality is not as formal equality. In this case, it

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is required that everyone should be treated equally. The idea is that if everyone is treated equally,
justice and fairness can be achieved. But this is not necessarily the case. Therefore, if people are
unequaled, but they are treated equally, it will result in inequality (Parry, 2008). For example, it
is not equality if a person who is visually impaired is asked to fill a loan form, unaided. In the
same way as the other persons who are not visually impaired. Same problems can be present in
case of resolving disputes (Altobelli, 2006). For example, if people go for mediation and they are
not equal in their capacity to use ADR and a significant power imbalances present, it is unlikely
that the outcome will be just and fair. Therefore even if the parties are treated by the mediator
impartially, the result can be unjust. In this regard an example of commercial mediation can be
given where participants are present in a dispute (Spencer and Samantha, 2008). One of the
participants is an intelligent, articulate professional who is representing a large corporation and
has access to significant resources of advice and money. On the other hand, there is the owner of
a small business owners note with the support and a talent for hard manual work only. Such
differences present in person style can turn into positive or negative attribute in case of ADR.
Therefore treating people equally while resolving the dispute, may still result in unfair
agreement.
Substantive equality: substantive equality requires that the unequal as it should be treated
unequally. Therefore the persons who are oppressed, underprivileged and comparatively
powerless should be provided with what is required by them to allow them to take part equally
and to achieve a fair and just outcome (Preston, 2008). Therefore, for the purpose of achieving
the inequality, the presence of underprivileged or the lack of power Corp. needs to be
recognized. It needs to be compensated, inappropriate and empowering ways. In order to provide
justice and fairness to the disempowered people it is required that their views regarding the

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problem should be listened to. On the other hand, if the powerful only provide what is required
or deserved by the disempowered according to them, they may be providing that will be
inappropriate.
A major problem present with substantive equality is that unless it is recognized by the powerful
that in order to create a level playing field, it is necessary that the other side should be provided
more help, they will protest that. What is taking place is not just, and it is unequal. Indeed, they
are experiencing unequal treatment, but such statement has been designed with a view to produce
substantive equality. Of course, in a number of situations the comparatively powerful do not
recognize that the other party lens power and privilege (Spencer, 2011).
Therefore, in the end, it needs to be stated that by adopting ADR processes, the parties dispute
have major control over the process that is being used by them for resolving their disputes.
However, the benefits of using ADR processes for the purpose of resolving disputes need to be
balanced against some of the problems associated with these processes. Generally these
processes are much cheaper and quicker as compared to litigation. Similarly, the transaction and
financial costs are much more less than litigation, especially at the low-end of the dispute
resolution spectrum when parties are using methods like mediation or negotiation. Basically, in
case of ADR, the delivery of substantive justice is involved. It provides a chance to the parties to
get what they want by negotiating and creating their own agreement. This concept of justice
flows to the events that have high level of compliance as the parties are directly involved in the
creation of such agreements. Therefore they are more likely to adhere to the agreement.
Another important aspect of ADR is that of confidentiality. Therefore, disputes can be resolved
by the parties while remaining away from public time. This is generally involve them in case of
commercial and family disputes.

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But it cannot be denied that the ADR processes help the parties to dispute in staying away from
the expense of litigation and they also provide directorial control over the process. However, it
needs to be noted that ADR is only one alternative and it is not the method of choice.

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References
Abramson, H., 2005, ‘Problem-Solving Advocacy in Mediations: A Model of Client
Representation’ 10 Harvard Negotiation Law Review 103
Altobelli, T., 2006 ‘A Generational Change in Family Dispute Resolution in Australia’ 17
Australasian Dispute Resolution Journal 140
Douglas A, S, 2001, Alternative Dispute Resolution Programs in Law School Curriculum-What’s
Next? Report for the ABA Section of Dispute Resolution
Downes G, 2008 “Alternative Dispute Resolution at the AAT”, 15 AJ Admin L137
King M, Freiberg A, Batagol B and Hyams R, 2009, Non-Adversarial Justice Federation Press p
88.
Nadja, ‘A., 2008, The Mediation Meta-Model: Understanding Practice’ 25 Conflict Resolution
Quarterly 97
Parry D, 2008 “Revolution in the West: The Transformation of Planning Appeals in Western
Australia”, 14 LGLJ 119
Preston BJ, 2008 “The Land and Environment Court of New South Wales: Moving towards a
multi-door courthouse - Part II”, 19 ADRJ 144
Silver, M., 2009, ‘Supporting Attorney’s Personal Skills’ 78 Revista Juridica UPR 147
Sourdin, T, 2008, Alternative Dispute Resolution LBC Thomsons, 3rd ed
Spencer, D and Samantha H, 2008, ‘Deal or No Deal: Teaching Online Negotiation to Law
Students’, 8 Queensland University of Technology Law and Justice Journal 93
Spencer, D, 2011 ‘Pre-litigation Procedures: A Legislative Update and Mediation Media Watch’,
21 Australasian Journal of Dispute Resolution 139

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Warren M, 2010, “Should Judges be Mediators?” 21 ADRJ 77