Mediation and Arbitration
Disputes are preva
lent in society in every sphere of life. Whenever a dispute arises between individuals, groups, and countries, the disputants give weightage to resolve it through hassle-free processes. The ordinary course of action is to sue the parties and initiate litigation based on the nature of the dispute. Another way to resolve disputes is the Alternative Dispute Resolution (ADR). Mediation and arbitration are ADR processes that facilitate the parties in resolving their conflicts without knocking on the court’s doors as the top pick. The parties who do not want to open a can of worms prefer to settle their differences out of the courtrooms. Mediation is the first resort, followed by arbitration as a fallback option. It is carried by a mediator who should be neutral and trained to help the conflicting parties reach a consensus.
Conversely, arbitration is carried out by a trained arbitrator serving as a judge responsible for resolving the conflict. The mediator and an arbitrator must be knowledgeable and independent. (Commonwealth Coatings Corp vs Continental Casualty Co 393 US 145).
Suppose mediation and arbitration fail or result in a deadlock; parties will transition to another process called Med-Arb. Med-arb rushes to aid in avoiding any impasse created in mediation or arbitration. It is a hybrid mediation-arbitration approach that combines the benefits of both mediation and arbitration. Hence, mediation, arbitration, and med-arb techniques are a virtue of necessity and provide a safe window to the parties concerned.
Process of Mediation and Arbitration
Mediation proceedings commence once the parties agree or put forth mutual demands to a mediator. The decisions made in mediation are not binding, but they help the parties to find common ground. It merely focuses on interests and needs, not legal positions. In case of any deadlock in the mediation process, parties choose arbitration. It is less formal than a court trial but more formal than mediation. A neutral and trained arbitrator is empowered to make a binding decision. In arbitration, the arbitrator hears evidence and arguments from both sides. The primary goal is a fair and impartial decision to balance both sides in a conflict. Decisions made in the arbitration are usually final and enforceable.
Effectiveness of Mediation and Arbitration
The standard to measure the effectiveness of mediation and arbitration can be the settlement rate, the satisfaction of the parties involved, and the cost-effectiveness of the process. Pakistan, highly dependent on litigations, has struggled to make headway in Alternative Dispute (ADR) methods. However, the new arbitration law draft is seen by many as a good omen. To determine the effectiveness of ADR methods, considering developed countries like the United States is necessary. In the USA, data from the American Arbitration Association 2021 revealed that the settlement rate in arbitration cases has steadily increased, reaching an average of 77% in 2020. Also, parties involved in ADR mechanisms report more satisfaction than traditional litigation. According to the Harvard Negotiation Law Review, 75% of participants in mediation were satisfied with the process and outcome while minimizing costs. The reports by Statista, the settlement rate in Japan was 35.8% in 2019, while the satisfaction rate of litigants was 82.4% in 2018. The data mentioned above suggests that alternative dispute resolution methods hold promise for achieving successful resolutions.
The Impact of ADR on Judicial Efficiency
Currently, 2.4 million cases are pending in courts across the country, and 80% are pending in the district judiciary, as reported in the Tribune Newspaper. The latter statement is made by Justice Mansoor Ali Shah, the senior puisne judge of the Supreme Court while addressing a function of restructuring arbitration laws in Pakistan. https://tribune.com.pk/story/2464963/sc-judges-suggests-separate-commercial-courts ADR methods are fundamental to reducing such caseloads without going into the nitty-gritty of lengthy court proceedings. Leveraging innovative dispute resolutions can reduce the courts’ workload and significantly enhance access to justice by providing a more streamlined, cost-effective, and timely way of resolving disputes, promoting excellent quality and fairness within the legal system. Hence, ADR techniques profoundly impact the judiciary by discouraging case flow to the courts. Due to its accessibility and speed, disputes can be resolved more quickly.
The Road Ahead
As the judiciary already grapples with the challenges of congestion and delay, the importance of mediation and arbitration will only continue to grow. The absence or less use of the ADR system has roiled our justice system, resulting in a staggering backlog of new cases over time. Pakistan must recognize the growing usage of arbitration and mediation in all cases, from civil to commercial matters. It is, therefore, necessary to quell the caseloads by adopting practical approaches like the ADR. As the judiciary stands at the precipice of a new era, lampooned by the masses, and its 130th rank out of 142 countries as of the 2023 report of World Justice Project’s Rule of Law Index, the integration of ADR system within the legal system serve as beacons of hope amidst all the criticism that surrounds judiciary. Beyond the hallowed halls of academia, these steps must be implemented, and out-of-court settlements must be encouraged directly or indirectly under the supervision of courts.
