What does "ADR" stand for?
ADR stands for Alternative Dispute Resolution. Arbitration is, strictly, a form of alternative dispute resolution. However, the term ‘ADR’ has recently come to be used as comprising all those non-adjudicative methods of resolving a dispute which are alternative to litigating in Court. Mediation is the most common form, but there are many other forms of ADR that are being used increasingly to avoid the cost of litigation.

What is Mediation?
Mediation is a very quick, inexpensive and private way of settling disputes. Most mediations take place within one day, although very large or multi-party disputes may be mediated over two or more days. The extent of preparation is very limited compared to litigation and this enables mediations to take place within a very short time of the parties agreeing to mediate and reduces the cost of any professional advisers. ACI has achieved hearings, where necessary, within a week of being asked to appoint a mediator, although more time allows for better reflection and preparation on the part of the parties. The process is not elaborate and the cost of preparation for the mediation is normally very small.

How does Mediation work?
The mediation process is ultimately flexible and will vary according to the mediator’s perception of what is required for the particular dispute. Typically, the parties may provide the mediator with some or all of the following: a written case summary, a chronology of the dispute and the settlement history, a list of issues, a copy of any pleadings or submissions exchanged and a small bundle of core documents. If the mediator thinks that it would be helpful, and particularly in the more substantial or complex cases, he may hold a Preliminary Meeting to discuss the ground rules for the mediation and confirm arrangements. If necessary, this can be done over the telephone.

At the hearing, it is essential that the parties should be represented by someone who has authority to agree a settlement of the dispute. At the beginning of the hearing the mediator will explain the procedure in an open forum at which each party will often be encouraged to make a statement of his position.

What follows is a process of structured investigation and negotiation carried out through the mediator by means of private sessions with each party individually. The private sessions with the mediator are confidential and the mediator will not disclose any information or document provided to him during those sessions without the consent of the party concerned. The parties agree, before commencing mediation, that neither of them may use any information obtained during the mediation in any future litigation or for any other purpose.

The process is non-binding in the sense that either party can walk out at any time, although it is stressed that parties should approach the mediation with the intention of seeing the process through to the end of the allotted period. It is only by doing so that the negotiations can be given a full opportunity and the mediation a proper chance of success.

The mediator acts purely as a neutral or "conduit" between the parties. The mediator’s task is to assist the parties in reaching their own settlement. The mediator cannot give judgment. It is possible, however, in an unsuccessful mediation to ask the mediator to make a written recommendation on how the dispute could be appropriately settled and the mediator may do so if he considers it helpful. Parties who cannot settle at the mediation often manage to do so thereafter on the basis of the mediator’s recommendation.

If the mediation is successful the parties will usually enter into a binding settlement agreement. Settlements in mediation are often quite different to those imposed by a Judge in litigation. They may include not only monetary compensation but also, for example, provision for future business opportunities, a new contract on new terms or a benefit in kind. Parties often feel that they have achieved a better and more commercial result by mediation than can be obtained in litigation.

What are the fee arrangements for mediation?
ACI operates a Fixed Fee Mediation Scheme. The amount of the Fixed Fee will depend upon the seniority of the mediator chosen and the length of the hearing. The fee scale for administration  is set out on the Fee Sheet for ADR Processes available from the ACI Administrator.

What is the success rate of mediation?
Mediation has an extremely high success rate. Over 80% of cases are settled during the course of the mediation. Of those that are unsuccessful at the mediation, many settle within a few days thereafter. ACI believes that this process is aided by the recommendation of a specialist lawyer engaged in the field of the dispute.

What are the advantages of mediation with ACI?
ACI believes in providing lawyer mediators who are specialists in the type of dispute being mediated. This means that the mediator has an understanding of the background to the dispute and the legal issues involved. ACI believes that this enables the mediator to conduct the proceedings more decisively and provide an experience and expertise that assists both parties in their endeavour to find an acceptable compromise. The lawyer mediator is particularly well able to assist the parties in identifying the issues and in assessing their risks in the litigation.

What are the other available forms of ADR?
ADR may comprise any procedure the parties wish to follow for their dispute. However, the other common non-adjudicative forms are Early Neutral Evaluation and Mini-Trials.

How does Early Neutral Evaluation work and what disputes are suited to that method of resolution?
ENE is a process by which a dispute is put before an independent neutral third party who gives a non-binding decision indicating the way in which he considers the dispute would be determined by a Judge or arbitrator. The process is particularly useful where the dispute involves a difficult point of law or interpretation of a contract which prevents the parties from successfully mediating the dispute or otherwise reaching settlement. Senior lawyers are particularly well placed to give the indication sought.

The neutral usually gives directions for an agreed list of issues, the exchange of any relevant documents and the creation of a small core bundle where necessary. No documents can be produced in confidence within this process.

ENE may be conducted without an oral hearing, if the parties so wish, although it is common for there to be a short hearing. The procedure at the hearing will be determined by the neutral but witnesses are not normally heard. The parties commonly make short submissions within a time limit set by the neutral. After the hearing the neutral publishes a non-binding written decision. Settlement is very often achieved between the parties on the basis of the evaluation. The parties may, if they wish, agree to be bound by the decision of the neutral where the determination of the issue will be determinative of the whole dispute.

What are Mini-Trials and how does that procedure operate?
Mini-Trials take a number of forms. The most common is a process by which the parties present the essence of their case by submission and sometimes evidence to a Tribunal made up of senior executives (who typically were not involved in the transaction) from the parties and a neutral chairman. This is done within a strictly limited time to enable the neutral to make a non-binding evaluation. Negotiations can then take place and the process may proceed (if the neutral considers it appropriate) as if it were a mediation.

This process is particularly suitable for larger, more complex disputes where there are points of law or construction combined with substantial issues of fact. Although the procedure inevitably takes longer than a mediation or early neutral evaluation, it has considerable value where the dispute would take a substantial period of time for hearing before a court or arbitrator, and mediation is unlikely to be successful because of the mixture of issues of law and fact. Typically a case which might last several weeks or months in court or arbitration would be dealt with in a Mini-Trial within two or more days . The process enables the parties to assess the strength of their own and the other parties’ cases and experience shows that the non-binding award or evaluation (which will include a determination of points of law or construction and issues of fact) often results in a settlement.

It is an essential part of the process that the parties are represented by senior officers who will play an active part in any settlement negotiations which follow the evaluation, whether or not those officers are appointed to participate as part of the tribunal.

What are the fee arrangements for ENE and Mini-Trials?
All neutrals supplied by ACI for ENE and Mini-Trials operate on an hourly rate. There is an additional administrative fee that is payable to ACI. The amounts that are payable are set out on the Fee Sheet for ADR Processes available from the Administrator.

How is the process of ADR commenced with ACI?
Firstly, unless the contract provides for ADR, it will be necessary to agree the process and that it should be carried out under the ACI Rules with the other party. ACI can sometimes help the parties to reach agreement as to how to proceed. Parties should ask the Administrator for assistance in these circumstances.

Having agreed the appropriate form of ADR under the ACI rules, the next stage is to complete the form entitled "Request for ADR". This should be at the back of the Rules booklet, alternatively it can be obtained from theAdministrator. The Request Form should be sent to ACI, together with the appropriate Initial Fee as set out on the Fee Sheet. Parties may ask ACI to appoint a neutral on whom they are agreed or they may ask ACI to appoint a neutral within a particular fee band. ACI will always seek to appoint a neutral with the particular expertise in the field of the dispute.

Where can I find out more about the various schemes operated by ACI?
At the front of the booklet containing the Rules there is a detailed description of each form of ADR described above and how it operates. Parties intending to participate in an ADR process, or their professional advisers, will also find it helpful to read the Rules for the process that they intend to select. Parties who have particular questions about the processes and how they work can also contact ACI where the personnel are only too happy to assist.

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Patron: Rt Hon The Lord Saville of Newdigate