• Disputes
  • July 28, 2021

What is Dispute Resolution?

Dispute resolution is the process of resolving a dispute or conflict between different parties. Crucially, dispute resolution can be a way of solving a conflict without having to go to court. 

As a business owner, it will be useful to know and understand methods of dispute resolution, should a situation arise where you need to resolve disagreements within your business, or with 3rd parties.

What is the Purpose of Dispute Resolution?

Dispute resolution is a way of resolving a conflict or dispute, often without needing to go to court and have a judge or trial decide the dispute - which can be an expensive undertaking 

What is alternative dispute resolution? 

The process of dispute resolution is also known as alternative dispute resolution, appropriate dispute resolution or ADR. The process can be used to attempt resolution of most business disputes.

There are four main types of dispute resolution: 
  • Negotiation
  • Mediation
  • Arbitration
  • Litigation

A starting point with dispute resolution can be negotiation. Both sides seek to find common ground on a dispute. This could be internal grievances around employment or director responsibilities, or disputes with 3rd parties, such as trading partners and investors. 

Considering the view taken by the opposing party is key. But sometimes the differences are too broad and the negotiation process fails. This leads to other dispute resolution remedies being considered.

Mediation is a process by which the parties involved in the dispute come together, but with an independent party present - the mediator - who tries to help the disputing parties come to a resolution that both sides can live with.

The mediator is impartial and it is not their role to come to a decision, but rather to help both sides agree to a resolution. Mediation is not as formal as the arbitration and litigation processes and as a result, it is usually much cheaper.

In mediation, a settlement agreement is drafted after a resolution, detailing what both sides have agreed to comply with. 

Arbitration is a more formal legal process. This uses an independent arbitrator to make a decision about the dispute. All parties provide evidence and the arbitrator uses this information to come to a conclusion, seeking to resolve the dispute. 

This form of dispute resolution allows all parties to have an influence on the process. As there are no court-imposed deadlines, it can be more flexible. It is also generally cheaper than litigation. Arbitration decisions are legally binding and they are generally able to be enforced in a similar way to court judgments, so taking legal advice is highly recommended

If the more informal dispute resolution methods fail, then going to court may be the only option remaining.

Litigation is when a dispute resolution Solicitor is enlisted to help resolve the dispute, giving expert advice on the best approach.

Dispute resolution Solicitors will deal with court proceedings and manage all the documentation throughout the process. Litigation is usually the most expensive form of dispute resolution. If it goes in court, it is likely that the other side will have also taken expert legal advice

What is a Dispute Resolution Clause?

A dispute resolution clause is typically a written agreement between you and the other party. It specifies what should happen in the event of a disagreement that may arise in the future.

The clause may lay out what the process is should a dispute arise, such as mediation, arbitration or perhaps litigation. A dispute resolution clause can cover contractual, as well as non-contractual disputes between parties. 

Why should you use Dispute Resolution?

Businesses might want to use a dispute resolution process because of factors relating to cost. In particular, mediation, which is much less expensive than other legal processes. They can also be much quicker as the parties do not need to get involved in lengthy and time-consuming court proceedings. 

With more participation from each individual involved in the dispute, they can have greater influence as there are no court-imposed rules, regulations and deadlines. Dispute resolution is also much less formal and more flexible than going to court. 

What Methods of Dispute Resolution are available?

Some methods of dispute resolution that are available are adjudicative processes and consensual processes.

Adjudication is when a neutral third party reviews the details of the dispute and the case that each party puts forward, and comes to a decision on the dispute which will be enforced. 

The process is begun by any party involved in the dispute issuing a Notice of Adjudication, which details any information about the dispute, as well as the resolution the referring party wants. That party will then appoint an Adjudicator, or arrange for the process of appointing one. 

Consensual dispute resolution is a settlement where the parties involved consent to a resolution, rather than getting an independent party to resolve the matter. This is a cheaper and quicker method of dispute resolution than adjudication, as only the disputing parties are involved. 

The parties on each side of the dispute have to get their side across in a way that allows the other party to understand their position, and come to a decision and subsequently agree a settlement together. 

Related articles

For further information about LawBite and dispute resolution, please visit our dispute service page

You can also read through our business dispute blogs, and download your free Dispute Settlement Agreement template to learn more. 

You can get legal assistance from LawBite 

At LawBite, our lawyers can provide excellent legal advice for dispute resolution. We will connect you to top-flight lawyers on our platform who can give expert advice regarding how you can go about resolving your dispute through mediation, arbitration, or litigation, among other forms of ADR. 

We use online tools and advanced technology to give your SME the legal advice you require, faster and cheaper. If you were looking to understand ‘what is dispute resolution?’ or ‘what is alternative dispute resolution?’, we hope this guide has helped you.  

Read through our FAQs or make an enquiry to learn more and get the legal advice you need as soon as possible.

Browse through our latest blog posts to read more about LawBite, the services we offer and legal insights which can help your business. 

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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