Alternative Dispute Resolution (NSW)
Updated on Oct 26, 2023 • 5 min read • 346 views • Copy Link
Alternative Dispute Resolution (NSW)
Alternative dispute resolution (ADR) includes a variety of different processes that are designed to help people to resolve their disputes informally. ARD is an alternative to going to court that is generally faster, less stressful, less costly, and more flexible. It is also generally easier to maintain confidentiality and to preserve the personal or working relationships involved when using ADR. This page deals with alternative dispute resolution in New South Wales.
Many contracts require that parties try alternative dispute resolution in the event of a dispute, before resorting to litigation. In some cases, a court or tribunal may require parties to try alternative dispute resolution before they can make a formal claim.
Negotiation is an informal first step that is usually advisable when seeking to resolve any dispute. Negotiation should be attempted before other methods of alternative dispute resolution and before initiating court proceedings.
In a negotiation, the parties will generally communicate directly with each other, offering suggestions as to how the matter might be resolved to try to come to an agreement. In some cases, it may be necessary to conduct negotiation with the help of an impartial third person.
Mediation involves engaging an independent third party (a mediator) to help disagreeing parties reach a solution during a confidential session. A mediation may be conducted face-to-face or over the phone. The mediator helps the parties to clarify what is in dispute, identify possible options and try to reach an agreement. Mediators do not give legal advice or impose a decision.
A mediator’s role is to:
- explain the process and set guidelines
- make sure everyone has a chance to talk, be heard and respond
- help the parties to identify and communicate about what they hope to achieve
- help clarify the issues
- help the parties to develop options and consider possible solutions
- help the parties reach an agreement
- make sure everyone understands any agreement reached.
Parties taking part in mediation will generally talk directly to the others involved in the dispute but they may also have separate sessions with the mediator. There are usually breaks for the parties to consider what has been discussed and get advice or support if needed.
If everyone agrees, a mediation session may include support people, lawyers or other professionals. Mediation can be undertaken voluntarily by the parties, but it may also be required as part of a contract, ordered by a court, or part of a government agency process.
Mediation is likely to be unsuitable if parties don’t feel safe communicating with each other, or where there is a significant power imbalance that prevents one or more of the parties from negotiating effectively.
Before mediation, you may want to get legal advice as to what your rights are and what responsibilities you owe. You may also want advice as to what alternatives are available if you don’t reach an agreement.
Arbitration is a formal type of dispute resolution. Each party presents their case to the independent arbitrator who, after hearing all the evidence, makes a decision. The parties may be represented by a lawyer. Experts may also give evidence for the arbitrator to consider.
Arbitration may be useful if the subject matter is highly technical, or if the parties want a confidential solution. It may be voluntary, ordered by a court, or required as part of a contract.
If parties to a dispute are to use arbitration successfully, they need to agree that the arbitrator’s decision will be binding. If the arbitrator makes a decision any of the parties is not happy with, they may be able to appeal.
A formal means of alternative dispute resolution is expert determination. This involves the resolution of a dispute through a decision of an independent third party, who is an expert in the issues involved. The parties must have first agreed to be bound by the expert’s decision.
Conciliation is conducted by an independent third party (a conciliator) who helps the parties to identify the issues, consider options and try to reach an agreement. Conciliation is a process often used when an application has been made to a tribunal or other government agency in an attempt to resolve a dispute without the need for a formal hearing. It may also be undertaken voluntarily.
A conciliator does not make a decision about the dispute but helps lead the parties to a resolution. The conciliator’s role is similar to that of a mediator, except that they may give some legal information and provide parties with expert advice on the alternatives for sorting out the issues in dispute. They may have professional knowledge of the subject matter.
Conciliation may be held face to face, over the phone, or by holding separate sessions with each party.
Lawyers may be present during conciliation.
Courts, tribunals and alternative dispute resolution in New South Wales
Alternative dispute resolution processes in New South Wales can be utilised before, during or after formal court processes have been started.
NSW Fair Trading provides a dispute resolution process for those who have a problem with a business, trader, landlord or tenant.
The NSW Civil and Administrative Tribunal (NSWCAT) also offers a dispute resolution process through its Consumer and Commercial Division.
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