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If you are in dispute with another person or business, you may be considering going to court. However, litigation can be expensive, time-consuming and inappropriate for your particular concern. Instead, you may wish to consider using alternative dispute resolution. This article will detail what alternative dispute resolution (ADR) is, and outline the three common alternative dispute resolution methods in New Zealand.

What is Alternative Dispute Resolution in New Zealand?

Alternative dispute resolution is any method of resolving disputes or conflicts that do not involve going to court or litigation. The method of dispute resolution that you choose to take will depend on:

  • your desired costs;
  • the amount of time you wish to invest;
  • the confidential nature of your dispute;
  • the nature of the relationship you have with the other party or parties involved; and
  • your desired outcome. 

The most common ADR processes are:

  • negotiation;
  • arbitration; and
  • mediation. 

The key matters that distinguish these forms of dispute resolution are whether:

  • you and the other party, or parties, control the process and outcome;
  • a neutral third party assist you in achieving the outcome; or
  • a neutral third party imposes a decision. 

Negotiation

Negotiation is a dispute resolution process in which parties, or their representatives, communicate and work together to reach a conclusion or agreement. 

It is a self-resolution approach to disputes. Only the parties themselves are involved, and those individuals determine the entire negotiation process. As there is a large amount of flexibility with negotiations, the parties will usually decide on a method or process they will follow before engaging in the negotiation.

The key elements of the negotiation process are:

  • the parties themselves decide the outcome;
  • it can be as fast, cheap and informal as the parties wish it to be; and
  • there is an endless amount of flexibility regarding its procedural requirements, as the parties themselves conduct it.  

Negotiation is typically the first step in dispute resolution intervention. After engaging in a negotiation, it is common for parties to move on to another form of dispute resolution. However, given the relationship you have with the individual you are in conflict with, this unstructured and unfacilitated approach to dispute resolution may be inappropriate. 

Arbitration

Arbitration refers to a dispute resolution method in which conflicting parties agree for a neutral third party (an arbitrator) to come to a final resolution of the dispute. 

It is a contractual method to dispute resolution. The arbitrator has the authority to make a binding and enforceable decision due to an agreement reached between the parties. This agreement will usually be contained in a contract clause that creates and governs the parties relationship, such as an employment agreement or business contract. The parties will agree that, should a dispute arise, an arbitrator will settle the matter. Accordingly, the parties will be bound by this decision, whether they consider it to be correct. 

The key elements of the arbitration process are:

  • a neutral third party decides the outcome;
  • it is similar to going to court, in the way that it involves evidence, calling witnesses and the presentation of legal arguments; and
  • there is a large amount of flexibility as to its procedural requirements. 

The commercial sector typically uses arbitration.

Mediation

Mediation is a dispute resolution process in which a neutral third party (a mediator) facilitates the negotiation between conflicting parties. It is a mediator’s role to assist parties in resolving their dispute. 

You can consider mediation as the middle ground between negotiations and arbitration. The parties are assisted by the mediator in making their own decisions and agreements, instead of having a decision imposed on them or being left unfacilitated. The mediator will help the parties in:

  • defining their issues;
  • drawing out relevant information;
  • exploring potential settlement options; and
  • negotiating a final, mutually beneficial settlement agreement. 

Once parties resolve their dispute, the mediator will draft a written agreement that outlines the mediation process’s outcomes and resolutions. This document is known as a mediated agreement.

The key elements of the mediation process are:

  • a neutral third party facilitates the outcome;
  • it is relatively informal and both consensual and confidential; and
  • the parties can negotiate flexible solutions that do not conform with any specific legal or general guidelines. 

Employment-related disputes typically utilise mediation processes. 

Key Takeaways

Using the court system is not the only way to resolve conflicts in New Zealand. Instead, you may wish to use an alternative method to resolve your case. The most common forms of dispute resolution processes are:

  • negotiation;
  • arbitration; and
  • mediation. 

What process, or processes, you decide to embark on will depend on your desired extent of flexibility, the presence of a third party and your available resources. 

If you wish to engage in alternative dispute resolution methods, contact LegalVision’s dispute and litigation lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What is alternative dispute resolution?

Alternative dispute resolution refers to any method of resolving disputes or conflicts that do not involve going to court or litigation.

What are the types of alternative dispute resolution?

The most common types of ADR are: negotiation; arbitration; and mediation.

Is alternative dispute resolution effective?

Alternative dispute resolution can be beneficial if done correctly. At times, ADR will be more appropriate than litigation, as it is typically more cost-effective, flexible and less time-consuming.

Why is alternative dispute resolution important?

ADR is important because it provides conflicting parties with more options to resolve their conflict.

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