Formal and Informal Dispute Resolution

November 14, 2018 Law

In todays competitive world, people have opposing interests, needs etc. Having conflicts is not a problem. Conflicts become harmful only when they take the shape of disputes. Disputes generally take place between family members, relatives, friends, businesses as well as between the state and individual citizens. International, Governments or companies of two countries might also enter into a dispute. The problem with disputes is if ignored, they can cause real damages and can bring life and business to a standstill. Conflicts can be both positive and negative, i.e they might be stressful and harmful a lot of times but if they are dealt with constructively they clear the air between the parties to the dispute. However, not dealt with effectively and efficiently, they may be very harmful. DISPUTE RESOLUTIONDispute resolution is way of settling down disputes between the parties to the dispute. The other name for dispute resolution could be conflict resolution. There are certain dispute resolution mechanisms like: LitigationNegotiationArbitrationMediationConciliation etc.

People who feel that they have been harmed by some incident or contract or any other transaction either pursue formal methods of dispute resolution such as filing of a law suit against the other party, or might use the informal methods to resolve their conflicts or disputes. Generally dispute resolution offers methods of resolving the disputes beyond the scope of the formal legal system. The dispute resolution processes are often categorised as formal and informal processes. The formal processes of dispute resolution are usually expensive and time-consuming whereas the informal processes, on the other hand, are less expensive and less time-consuming. The formal processes of dispute resolution can be processes such as litigation which is also known as the formal court system. On the other hand informal processes can be those wherein the disputes between the parties are resolved outside the formal court system. The informal processes are not an alternative of the formal court system but are only meant to supplement the court system. The alternative dispute resolution process is generally considered to be an informal method of resolving disputes. It is often seen that justice is not easily accessible to the poor due to lack of knowledge and poverty. Therefore, the primary objective of the ADR procedure is to avoid vexation, expenses& delays as well as promotion of justice to all.

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Various Forms of ADR are as follows:

Negotiation

It is a process that individuals use to satisfy their needs when someone else controls what they want. Negotiation is a non-binding procedure. It involves discussion between the parties without any intervention of a third party in order to reach to a settlement of the dispute. One party directly approaches another with an offer of negotiated settlement on the basis of an objective assessment of each other’s position.

Mediation

It is an attempt to help the parties in a disagreement to hear one another, to minimise the harm that could be a result of such disagreement. Mediation is a non binding procedure. It involves a neutral and non- partial third party i.e the mediator who assists the parties to the dispute in reaching a mutual, satisfactory ; agreed settlement of the dispute.

Conciliation

It is a non-binding procedure involving a neutral third party i.e the conciliator, who is chosen with the consent of the parties to the dispute. The conciliator assists the parties to the dispute in reaching a mutual and a satisfactory agreed settlement. The role of the conciliator is to interview each of the parties individually and disclose any information or statement made by one party to the other for comments.

Arbitration

Arbitration is considered to be an alternative to litigation. It is a binding dispute seprocedure.ocedure . The dispute here is submitted to an arbitral tribunal consisting of arbitrators who make a decision in the form of an award and this award is a binding on both the parties to the dispute. The ADR processes in the narrow sense includes only those processes in which the decision finally arrived at is with the consent of the parties to the dispute, such as the processes of

Negotiation, Mediation and conciliation whereas in the wider sense it includes the process of Arbitration which is considered to be an alternative to litigation. Thus, it is generally observed that negotiation, mediation and conciliation are categorized as informal processes of dispute resolution and arbitration being an alternative to litigation is often considered as a formal process.

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