Advantages and disadvantages of dispute resolution processes
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The advantages and disadvantages of the major dispute resolution processes may be summarised as follows:
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Arbitration
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Advantages
| - It is private - there is no public record of any proceedings, although not necessarily confidential
- Comparative informality
- Speed, although this depends very much on the manner in which the arbitrator conducts the arbitration
| - The parties can agree on an arbitrator with relevant expertise in the matter
The arbitrator's award can be enforced as a judgment of the court
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| Disadvantages
| - The parties must bear the costs of both the arbitrator and the venue
- Sometimes arbitration simply mimics court processes and so you do not get the advantage of informality and speed
- Limited powers of compulsion or sanction if one party fails to comply with directions of the arbitrator, which can significantly slow down the process
- The arbitrator has no power to make interim measures, such as for the preservation of property
- Limited appeal rights
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Expert determination / adjudication
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Advantages
| - The parties can select the expert or the characteristics of the expert
- The expert can act as an investigator
- Seldom lengthy oral arguments or legal submissions
- No cross examination or formal evidence
- Streamlined, speedy and flexible procedures as agreed between the parties and the expert
- Less expensive
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| Disadvantages
| - The expert cannot go beyond the jurisdiction specified in the contract
| - The expert determination is not supported by statute
| - No testing of evidence or assertions
- The expert's powers are limited
- Limited opportunities for appeal
- The expert's determinations must be enforced by commencing court proceedings
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Litigation
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Advantages
| - Generally regarded as the highest quality decision making
- Judges can compel the parties to comply with timeframes and have powers of sanction for non-compliance
- Judges have the power to make orders to provide interim relief to protect a party's position pending the final judgment
| - There are well defined rights of appeal in cases where errors of fact or law are made
- Judgments are enforceable within Australia
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| Disadvantages
| - Potentially greater costs if the dispute is not well managed or the other party seeks to delay the proceedings
- Potentially longer time period to obtain a judgment
- Proceedings are generally conducted in public
- Judgment will be subject to appeal
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Mediation
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Advantages
| - Informal process
- Can be initiated at any time as agreed between the parties
- Allows commercial relationships to be maintained during and after the dispute
- Parties can reach agreement incorporating flexible approach to outcomes
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| Disadvantages
| - If the parties do not agree, there is no outcome and the mediation has failed
- The mediator has no power to order the parties to do or to refrain from doing anything
- Information may be 'given away' in the process
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Updated 14 July 2014 |