Friday, August 24, 2007
UNDERSTANDING ADR (Alternative Dispute Resolution) AND ITS DEVELOPMENT WORLDWIDE – THE CHALLENGES AND OPPORTUNITIES FOR QUANTITY SURVEYORS
Mohd Norazman Bin Mohd Zaini
James R Knowles (Malaysia) Sdn Bhd
norazman.zaini@jrknowles.com
This paper was presented at QS National Convention 2003, 18-19 August 2003 at Sheraton Hotels and Towers, Subang Jaya, Selangor, Malaysia.
ABSTRACT
ADR has been widely discussed worldwide. In some countries, such process has been experimented leading to an established framework for its application, but to other countries ADR remained as a term for academic discussion. This paper will briefly discuss the meaning of ADR and briefly exploring its features, types, and on the enforceability aspect of ADR being a pre-determined agreement to resolve dispute by referring to the recent case law. The author will then explore the practice of ADR around the world in countries such as the United Kingdom, the United States, Japan, Australia and the selected ASEAN countries The author will then discuss what the Quantity Surveyors need to know when dealing with ADR. This includes important factors influencing the selection of ADR method as a mean to settle dispute, and the ADR procedures published by the International Chamber of Commerce. The final part of this paper will be the identification of opportunities, where and how the Quantity Surveyor can fit in the fast growing ADR process.
KEYWORDS : ADR, Quantity Surveyors, selection, procedures, opportunities
1.0 THE MEANING OF ADR
Literally, ADR stands for Alternative Dispute Resolution. One may then ask “as an alternative to what”? The obvious answer to this question would be an alternative to the existing established Dispute Resolution Methods i.e. litigation and arbitration..
One may claim that the later dispute resolution method is not common and can only be chosen for use by agreement between the parties in dispute and therefore should be considered as part of ADR. The author is of the opinion that an attempt to define what is ADR should be put in perspective. Arbitration although is not a common method of resolving dispute is an established dispute resolution method and been supported by statute since 1952. Although its not as common as litigation, it is a fact that in many key industries such as construction, marine, insurance, etc.; arbitration is an established and standard method of dispute resolution commonly incorporated in standard forms of contract. In this sense, the author believes that ADR should refer to an alternative dispute resolution method other than not only litigation but also arbitration.
When we talk about ‘alternative’ one may also ask whether ADR can be a ‘true alternative’ or ‘substitute’ to litigation. According to Street (1989), ADR mechanism is not and cannot be recognised as an alternative, in the true sense of the court system1. It is a fact that in our legal system not all disputes can be resolved by ADR method. Disputes involving fraud cannot be referred to court as all criminal offences are State matters. Disputes relating to tort is difficult but not impossible to be resolved by ADR method. ADR is not suitable and appropriate for these cases because of the detailed factual discovery and many legal test need to be executed to determine liability and the simplicity of ADR will not be sufficient to justly resolve tort disputes.
Apart from the above, it is important to understand that ADR is an “interest based” method of resolution whereas litigation and arbitration is “rights based” in its attempts to find resolution to disputes. Therefore, it is apparent that ADR method cannot be the true alternative to litigation and arbitration. In this sense, it is better to promote ADR for dispute where the quality and features of litigation and arbitration is not fundamentally required.
2.0 THE FEATURES OF ADR
The key features of ADR includes:
(a) Low Cost - Low cost here refers to the cost for employing ADR as a method to resolve dispute such as fees for the appointment of representative, fees for third party such as mediator, experts, etc, rental of venue, documentation cost, etc. and minimising damages cost such as interest cost, etc incurred by the parties.
(b) Speedy Resolution - Speedy resolution is the main attraction for ADR and therefore, this feature must be preserved. In order to realise this feature protocols, procedures must be minimised and formality be reduced.
(c) Confidentiality/Privacy - Privacy and confidentiality must be strictly exercised and naturally, ADR offer these features.
(d) Flexibility - There must be flexibility in exercising ADR method. Rigid procedures must not be adopted.
(e) Perceived Fairness - ADR method appears to be a fair method for resolving international disputes as the parties chooses their own third party or expert to assist them in resolving the dispute. In other words, the interest and values of the parties are taken into account in ADR rather than litigation whereby the decision is refuted by the laws of the State and values of the judges.
(f) Effectiveness - ADR method must be effective in resolving the matter in dispute. It is important to take note that besides arbitration, other ADR method is not about determining who is right and who is wrong. It is more of a process to resolve dispute through compromise in a mutually conducive environment. Therefore, for ADR method to be effective, the parties must have the mutual spirit to resolve the dispute.
(g) Creative - Creative and explorative are an essential values in ADR method. It is not purely a technical skill, but more of an art to be practised by the third party with the main objective of getting the parties to resolve their disputes.
3.0 THE TYPES OF ADR METHODS
The types of ADR method includes:-
(a) Negotiations - It is a process of where the parties meet and negotiate solution to their disputes. There are no rules or procedure for carrying out a negotiation. Information exchange is the heart of any dispute resolution, therefore, parties are advised to make preparation so that the negotiations can be effective. It is fundamentally important that the person who has authorisation to make decision attend to the negotiation. Many negotiations are seen to be a waste of time because the attendees of the negotiation need to revert back to their superior for decision. The parties must also have a clear mind, good faith and desire to resolve the dispute.
(b) Mediation - Mediation2 can be generally defined as:-
“A private, informal process in which the disputants are assisted by one or more neutral third party/ies in their efforts towards settlement. The mediators advise and consult impartially with the parties in dispute in order to bring about a mutually agreeable resolution of disputes”.
(c) Early Neutral Evaluation – Can be generally defined as:-
“A process of which a neutral third party inquires into the merits of a dispute during the early stages of arbitration/litigation. The neutral evaluation of the case may assist in settlement of some of all issues prior to extensive discovery”.
As the definition suggests, this is a process of non binding adjudication aimed at encouraging evaluative discussions at early stage in view of obviating the need for a full blown hearing, preparation or even lead to a negotiation and settlement process.
(d) Expert Determination - As the term suggests, this is a process where dispute is brought to an Expert to be determined by him. No formal procedures involved and the Expert may request for submissions of case by the parties, conduct interviews, take evidence or make inspections. This method is best suited to refer disputes relating to discrete legal or technical issues for a decision.
(e) Mini Trials - Mini Trials as an ADR method which is widely used in the United States. It replicates litigation, but in a simplified form. The author prefers to describe Mini Trials as Express Trials, whereby focus is made on the relevant issues of a dispute only.
(f) Arbitration - Arbitration is the most widely used ADR method over the years. The incorporation of the provision to arbitrate in most standard forms of contract by many major industries such as insurance, construction, marine etc. contributed to the popularity if not mandatory use of Arbitration.
4.0 THE ENFORCEABILITY OF ADR
The resolution of a dispute achieved from ADR process can only be made binding by way of an agreement between the parties. If a party deviated from such an agreement, the other parties can take action by applying for specific performance in generality or sue for breach of contract.
The other aspects of enforceability is whether an agreement made between the parties to resolve dispute through ADR process can be enforced by the Court. The decision in the recent case of Cable & Wireless Plc vs IBM United Kingdom Ltd (2002) 2 All ER (Comm) 1041 states that for a reference to ADR to be enforceable, the provision referring to ADR must be certain and the procedures be identified. The decision of this case recognises ADR as a process of resolving dispute and made such agreement to ADR enforceable by the Court.
5. PRACTISES OF ADR WORLDWIDE
The United States and the United Kingdom have been in the forefront in the practice and development of ADR. Mediation for example has been practiced in the United States since 100 years ago to resolve labour dispute. Most variety of ADR can be found practiced in the United States such as mini trial, summary jury trial etc. In the United Kingdom, a more structured development can be seen.. Arbitration and adjudication is popular in the United Kingdom whereas mediation remained as a favourite approach to be explored.
In Japan, conciliation is a popular practice. Conciliation has the broadest meaning under the Japanese Civil Code where it refers to an agreement to settle disagreement through any method. Conciliation can be broadly categorised into 2, i.e. outside or within Court proceedings. The former refers to negotiation between the parties outside court and the later refers to a conciliation process recommended by the judge during trial. The resolution if the conciliation process is successful is reduced into an agreement know as the “conciliation agreement”. With the existence of this conciliation agreement, the parties lose the right to appeal and such agreement is enforceable in court. In the conciliation process, the judges are acting as conciliators. They suggest the possibility of settlement and guide the parties to agree to settle their dispute.
The practise of ADR in Australia is categorised into “facilitative” process such as mediation/conciliation, “advisory” process such as case appraisal and neutral evaluation and “determinative” process such as Arbitrator and binding expert determination. The most prevalent form of ADR is mediation, however, in the statutory context, conciliation is often used. Conciliation here is by no mean has a clear distinction with mediation. It maybe that in a conciliation process, the conciliators have more “interventionist” role than mediators such as promoting the principles of the statutory scheme in the conciliation process. ADR methods such as case appraisal and neutral evaluation are used where there is a requirement for the 3rd party to use his experience and guide the parties to a reasonable settlement. Arbitration in Australia is still in use but tend to be less popular as mediation and case appraisal being used more in the last decade. The building and construction industry has shown a steady swing towards mediation and other forms of ADR and away from arbitration. Many professionals associations have ADR schemes to train their members and promote the service. Many government agencies have extensive ADR programmes in place and there exist specialist commercial providers of ADR services such as Mediate Today3 and Australian Commercial Disputes Centre4 in Sydney. Many universities and private consultants provide training services for prospective ADR practitioners.
The most popular method of ADR in China is arbitration, governed by the China International Economic Trade Arbitration Commission (CIETAC). However, in most cases the CIETAC arbitration panel will arrange the parties to try to mediate, and the mediation process is more of an evaluative or directive rather than a facilitative model as practised by the West. In the event that the mediation fails, the dispute will then be brought to arbitration. The main concern in switching from mediation to arbitration process is that some of the information used in the mediation process may be brought in the arbitration against the parties, however the CIETAC rules make it clear that parties are not permitted to use information or offered concession from a failed mediation to bolster their positions in arbitration. Other forms of ADR methods are not popular and in use in China.
In Hong Kong, ADR is better known and practised. Arbitration, mediation and conciliation are the popular ones used. The Arbitration Ordinance consist of provision for conciliation as a method of resolving the dispute where a neutral party will offer an opinion on the merits and make suggestion for a suitable settlement. This is an active measure adopted and practised in Hong Kong to avoid arbitration where possible. This is because of the growing dissatisfaction of arbitration and its high cost. Besides arbitration and conciliation, Hong Kong have also explored and experienced the setting up of a single neutral body who is an expert in the filed of the contract to deal with possible dispute over a project. Examples being the setting up of a Dispute Review Board (DRB) to head off conflict before they become a dispute for Chep Lap Kok Airport and the setting up of a Dispute Review Advisor (DRA) for the construction of an extension to Queen Mary Hospital. These bodies appear to have minimised the number of scope of disputes whilst providing a speedy resolution. The other ADR method such as expert determination, mini trial etc does not seem to be popular or actively practised in Hong Kong. Mediation is the most popular. It refers to a facilitative process. The Hong Kong mediation council which is a recognised authority having about 150 mediators, was only part of the back. Hong Kong International Arbitration Centre then. Nevertheless, the mediation facility does not seem to be fully utilised for same reason.
Arbitration is the main method of ADR used in Thailand as a result of enormous increase in foreign trade and investment between 1980s and 1990s. This is supported by the development of institutional support such as The Thai Arbitration Institute (TAI) established in 1990. The legal framework also seems to be developing rapidly. The Thai Arbitration Act 1987 has been recently replaced by the Arbitration Act 2002, bringing it closely in line with the UNCITRAL Model Law. Thailand is a party to the New York Convention facilitating international enforcement of award. All these developments and establishments have promoted arbitration as the main ADR method in Thailand. Other non-confrontational ADR methods are also been traditional practised in the form of mediation or conciliation. This is reflected in the TAI whereby it requires the parties to meet and explore the possibility of conciliation before dispute is submitted to arbitration. There is also an institutionalised mediation centre being established as a parallel body to TAI. However, these other ADR methods are struggling for a place in Thailand.
Indonesia in general do not practise litigious culture, therefore commercial litigation is rare. The state of ideology “the Pancasila” calls for deliberation to reach consensus and discourage confrontation of any kind. This ideology have rooted in the society and is applied in the legal practise. Indonesia’s Arbitration Law (Law No 30 of 1999) and the rules of Badan Arbitration Nasional Indonesia (BANI) require the arbitration tribunal to first attempt to cause the parties to reach amicable settlement before commencing hearing. The Indonesian Law 1999 was not a totally new legislation but a comprehensive revision of the mid 19th century Dutch code of civil procedure. Therefore, arbitration is not new at all to Indonesia. Other ADR methods are not that well established or institutionalised. The culture of resolving dispute through informal negotiation is mainly practised by parties, either involving third party or not. Arbitration appeared to be the last resort to resolve the dispute.
In Malaysia, ADR has become the talk of the industry recently. It emerged from the so-called unsatisfactory performance of the Courts due to many backlogged cases pending for decision. ADR is normally referred to as mediation or conciliation. Although it has become the subject of academic discussion, the actual practise is yet to be seen. This may be due to the lack of understanding what it is all about and the expected outcome. It may also be contributed by the non-litigious society by cultural, values of the Asia people that is “we always talk to resolve our dispute” and “reference to third party” is the last resort for achieving resolutions. The provision for mediation has been incorporated into most standard form of contract including PAM which gives options to the parties to refer the dispute to mediation and CISM which made mediation as a pre-condition to arbitration.
There has been great effort to introduce ADR and educate users on ADR made by the Kuala Lumpur Regional Centre for Arbitration (KLRCA), the Bar Council and Construction Industry Development Board (CIDB), however the development in the practical application of mediation is yet to be seen. Other types of ADR methods does not seem to be much of a talk and appear actively in the Malaysian scene and remain as an academic topic for discussion. The Courts of Malaysia have not incorporated ADR as part of Court procedure as our Singapore counterpart. Nevertheless, there is certainly much interest in ADR.
6. WHAT QUANTITY SURVEYORS NEED TO KNOW WHEN DEALING WITH ADR?
(a) What QS need to know when dealing with ADR?
Generally, besides knowing what ADR is all about, where he can fit in and what he as a QS can offer. The other thing that A QS needs to know when dealing with ADR among others are:-
(i) Some Form of ADR Procedure
Before even carrying out any work dealing with ADR, one must have knowledge of the procedures he has to follow or which he wanted to implement to ensure that the ADR process is systematically approached, effectively managed, fairness maintained and economically run. To enable these to happen, some sort of procedures must exist A commonly and widely used procedure is the International Chamber of Commerce (“ICC”) ADR procedures. The key features of the ICC ADR procedures are that it is designed for consensual dispute resolution process, its non binding, flexible, confidential and complementary. The ADR method that can be used under the procedure are mediation, neutral evaluation and mini trial. The parties are expected to amicably agreed on the ADR method. In the event no such method been agreed, mediation shall be used5. The request for ADR shall be submitted to the ICC either jointly or unilaterally. If request is submitted unilaterally, the ICC will then send such request to the other party. If the other party replied that they are not interested to participate or does not respond to the request within 15 days, proceeding will not commence.
Under the ICC ADR Rule, the selection of third party6 is not by way of appointment by ICC. The ICC only takes note of the parties’ choice and administer the appointment. Only in the event that the neutral has not been designated by the parties or where the designated neutral do not agree to serve, the ICC will appoint someone making all reasonable effort to appoint a neutral having the criteria agreed by the parties.
The first task to be taken by the neutral is to organise preliminary meeting with the parties to agree on the settlement technique to be used and to define specific procedures and time table to be followed. All of these are to be agreed by the parties and now way its it is been dictated by the ICC.
As for cost related matters7, the cost of ICC ADR can be broadly categorised into ICC administrative expenses, the Neutral’s fees set by the ICC and the Neutral’s expense. The ICC will require a deposit to be paid by each party upfront and may be further requested from time to time as and when necessary.
The ADR proceedings can be put into end in a number of ways such as parties ending the process by signing a binding settlement agreement, agreement by the parties or unilaterally done to withdraw from the process and termination by the ICC in circumstances where the required payment has not been made or where it is not possible to appoint a Neutral.
(ii) Suitability of dispute to be referred to ADR
There may be a point of time when the parties to the dispute pose a question such as “what is the most suitable ADR method to be adopted for my kind of dispute?”
There are several factors that may have an influence over the choice of ADR method. These several factors among others are:-
(1) Whether the dispute involves a question of law and the parties which to claim for their rights;
(2) Whether the statements and credibility of a witness is critical in resolving the dispute;
(3) Whether the issues in dispute are limited to technical or cost related matters which can be determined by a Neutral who is an expert in the field;
(4) Whether the parties require a neutral opinion and on objective view of the dispute;
(5) The attitude of the parties whether there exists distrusts and unwillingness to compromise;
(6) The financial size of the dispute.
When the dispute heavily involves questions of laws and the statement of witness is critical in resolving the dispute or when there exists apparent distrust and unwillingness to compromise between the parties, arbitration may be the most suitable method of ADR to be adopted. Where dispute involve around technical matters, then Expert Determination may be adopted. If the parties seek for an opinion, then Early Neutral Evaluation (ENE) method may be adopted.
The financial size of the dispute also is primarily important in the determination of what ADR method is suitable to be adopted. Naturally, if the financial size is too large, a more formal and adjudicative method is preferable.
(iii) Barriers to the success of ADR
The Neutral and participants to an ADR process must know the potential barriers to the success of ADR. The following are among others typical barriers which may ruin the success of this amicable dispute resolution:-
(a) Cultural Attitudes – cultural here do not entirely refer to ethnic cultural aspect but more on organisational culture. The culture of a large conglomerate is different from a small closely held or family business entity.
In a large conglomerate organisation due to the multi level accountability factor, it is likely that they will practise defensive strategy, where as a small organisation may be eager to resolve the dispute by compromising and get on with their business.
(b) Emotions – apparently emotion often poses in surmountable barriers. Anger, suspicion, betrayal, mistrust are typical emotion of a commercial dispute. These emotions must be understood and managed if not progress towards resolving disputes may be impeded.
(c) Too much focus on position – if one put on too much focus on factual or legal position and seeking for who is right and who is wrong, then automatically barrier exists. Interminable exchanges of statements as to factual dids or did nots or as to legal rights or wrong, seldom serve any good purpose other than to create a higher barrier, which should be managed and avoided.
(d) The struggle to win – the perceived need for win often creates a large barrier. The parties must realised that the relentless drive to “win” may yield only a “loss-loss” result which only benefit earning fees out of it.
(e) Participants to ADR – the absence of an important participant may erect a barrier to success. Senior Management staff who can make decision must attend to an ADR proceedings. Neutrals appointed must insist and ensure that the right participants attend the ADR proceedings, if not to go ahead with the process serves no purpose.
(f) Party withdrawal from ADR Process – when a party is reluctant to proceed with the ADR proceedings and withdraw himself from the table, it then become a barrier to a successful ADR. Although ADR is a consensual process, an act of withdrawal from its portrayed as an act of unwillingness to resolve the dispute amicably. Thought it may give some negative impression to the party withdrawing, nothing more can be done if the parties are not willing to resolve their own dispute amicably.
(g) The Neutral Credibility, Qualifications & Availability – it is possible that one of the reason why the parties in dispute are reluctant to use ADR is because they lacked trust and confidence in ADR Neutrals. The lack of trust and confidence may refer to the qualifications, experience, impartiality and independence and skills of the Neutral. Generally, to resolve this problem, any institution promoting ADR must be very selective in the appointment of Neutral. Ongoing courses for self development must be organised.
(iv) Practical consideration in executing ADR process
The following are some points which are practical consideration in the execution of ADR process:-
(a) Be prepared – preparation is the most important factor to enable a useful process to be carried out. Lack of preparation will hamper the ADR process;
(b) A competent Neutral is a must in any ADR process;
(c) Get the right participant to the table;
(d) Let the parties in dispute play an active role in ADR process;
(e) The appointment of Counsel representing the parties, whenever possible should be avoided. If Counsel is appointed, they should be controlled against the act of extreme threats, excessive emotion, manipulating facts, etc.
(f) The parties must be controlled in the process of ADR such as discipline and their conduct so that the benefits of ADR process can be realised;
(g) Confidentiality must be maintained at all times;
(h) The Neutral must work towards creating and capturing value in the ADR process;
(i) Cost and fees must be kept to a minimal;
(j) The conduct of the Neutral must be impartial, ethical and professional with focus on the particular interest of the parties in dispute;
(k) Quality assurance must be practised throughout the ADR process.
(v) Quality Assurance in ADR
When we talk about “quality”, the focus must be on the four essential elements that are, the customer; the product; the process; and the operator.
It is beneficial for one to understand the relationship between these elements. The Customer in the ADR process are the parties in dispute. Therefore, what the customer expects out of the ADR process should be the primary concern of the Neutral and the parties themselves. However, it must be understood that when there are 2 customers involved each of them may expect different outcome from the ADR process although a common expectation could generally be for a “settlement”.
The Product of ADR is a clear ‘settlement’ between the parties in dispute. If adjudicative method of ADR been selected, then the product will be the Award of the Arbitrator and the report produced by the Expert in the expert determination process. In publishing this “adjudicative product”, the Neutral must be clear on the grounds of his decision and he must be able to provide the customer the rationale behind his decision. It is important to note that in the ADR method such as mediation or negotiation, there may be no solution or resolution at the end of the process. This does not mean the customer has not obtain any product for which he expected. It must be accepted that some dispute will simply not settle despite everyone’s best efforts.
The Process in ADR proceeding refers to the ADR methods used in resolving the dispute such as mediation, expert determination, early neutral evaluation, etc. which has to be chose carefully so that it is suitable and effective dependent on the nature of the dispute.
The Operator in ADR proceeding refers to the Neutral such as mediator, negotiator, expert, etc. In order to ensure the quality of ADR, the Neutral need to be competent in carrying out the process. For the Neutral to be competent, he will required to possess three vital ingredients such knowledge, skills and experience. The knowledge here refers not only to the areas of expertise, but also to the knowledge of human nature. It must also be appreciated that in many cases, ADR method is initiated after litigation process has begun and in many cases also it involves the issue of law that need to be decided. Therefore, some knowledge of the law is essential to be possessed by the Neutral. In terms of skill, what is essential are communication – listening, questioning, awareness of body language, para language, etc. All of the above knowledge and skills will develop by time, thus making one having the experience required for him to be a competent Neutral.
7. IDENTIFICATION OF OPPURTUNITIES FOR QS PARTICIPATING IN ADR PROCESS
(a) Is QS the appropriate person to participate in ADR process?
Most disputes relate to monetary claims. These monetary claims need to be decided upon. It normally lead from the issue of entitlement or simply the determination of what is fair and reasonable. The training of a QS, its position as cost and contracts advisor together with the experiences of the QS gained from many projects are all valuable and form as a strong basic quality for participation in ADR process. All of these qualities should be used to its full potential in ADR process.
(b) The Opportunities : Where do Quantity Surveyors fit in?
One may wonder where do the QS “fit in” in ADR? Apparently, in arbitration, the Architects and Engineers are the ones likely to be appointed as Arbitrators. What are the chances of a QS to be actively involved in other types of ADR?
The chances are wide opened, but needs very much effort from individuals and from the institutions to grab such opportunity. Based on a pilot study conducted in Hong Kong8, 30% of the composition of experts involved in ADR process are QS by background and this is a majority composition. Others are Civil Engineers (20%), Solicitors (15%), Barrister (15%), Builders (5%), Building Surveyors (5%) and Others (10%).
Where the QS can “fit in” in ADR processes are as follows:-
(i) As an Arbitrator or Adjudicator;
(ii) As an Expert Witness in arbitration;
(iii As a lay-counsel in arbitration process;
(iv) As an Expert in expert determination process;
(v) As a Mediator to facilitate mediation process;
(vi) As a Negotiator in a negotiation process.
Almost all of the potential roles that a QS can explore above require the change in mind-set and the initiative in aquiring new knowledge and skills. To succeed, QSs need to broaden its knowledge and skills. The Institution can assist by establishing a platform to teach the essential knowledge and develop the required skills.
(c) Participating in E-Dispute Resolution
E-Dispute resolution process has come to a reality now. In a global competitive environment and borderless communication, those who refuses and ignore what information technology can offer will be left behind. The role that can be played in E-Dispute process are as Neutral in Mediation, Expert Determination and or Early Evaluation process.
The internet has the potential to become an invaluable ADR mechanism that can be employed for the timely, efficient, and economical resolution for many disputes. Theodore (1999) in his book9 described that ‘negotiation can take place at anywhere and at anytime’ and that disputants need not be in the same room; and that they can negotiate by various means, including fax, email or net-meeting. Of course when there are advantages, there will also be drawbacks such as security issues, hackers problem, cyber law insufficiency etc. which hopefully will be improved over time.
Although there may be lots of resistant and lack of confident to E-Dispute resolution now, it may become a reality in the future. It is therefore wise for QSs to be aware of what is coming as opportunities in the future.
8. CONCLUSION AND RECOMMENDATION
It is hoped that this paper will somehow give some awareness to my fellow QSs on basic and preliminary matters which they must know before participating in ADR process. It is also hoped that the Institutions can somehow assist in the development of knowledge and skills among their members to enable them to participate well in ADR process when needed. The setting up of ADR committee within the Institution is suggested to promote the use of ADR. It is also recommended that a team of Expert be set up within the Institutions to undertake the task of a Neutral and to train young and potential experts.
The search for the best ADR method will go on in the future and the ADR process will always be relevant for any dispute settlement, therefore it is essential for QSs to be sensitive to the changes and trends of ADR at all time.
References:
1 L. Street, “Address to the Australian Law Reform Commission (1989), Reform 82”
2 Hindcey John (2002) quoting from 1991 ABA Forum Survey; Supra, Note 1 at Fn 48.
3 See website at www.mediate.com.au
4 See website at www.acde.com.au
5 See Article 5(2) of the ICC ADR Rules.
6 See Article 3 of the ICC ADR Rules.
7 See Article 4 of the ICC ADR Rules.
8 Sai On Cheung; Henry CH Suen; Tsun Ip Lum, “Fundamentals of Alternative Dispute Resolution Processes in Construction” (2002), Journal of Construction and Management (September/October 2002), pg 409-417
9 Theodore W Kheel, “Keys to Conflict Resolution: Proven Methods of Settling Disputes” Four Walls Eight Windows, New York, 1999.
The speaker:
Mohd Norazman Zaini
James R Knowles (Malaysia) Sdn Bhd
Suite 11.1, 11th Floor, Menara Aik Hua
Cangkat Raja Chulan
50200 Kuala Lumpur
Malaysia.
norazman.zaini@jrknowles.com
James R Knowles (Malaysia) Sdn Bhd
norazman.zaini@jrknowles.com
This paper was presented at QS National Convention 2003, 18-19 August 2003 at Sheraton Hotels and Towers, Subang Jaya, Selangor, Malaysia.
ABSTRACT
ADR has been widely discussed worldwide. In some countries, such process has been experimented leading to an established framework for its application, but to other countries ADR remained as a term for academic discussion. This paper will briefly discuss the meaning of ADR and briefly exploring its features, types, and on the enforceability aspect of ADR being a pre-determined agreement to resolve dispute by referring to the recent case law. The author will then explore the practice of ADR around the world in countries such as the United Kingdom, the United States, Japan, Australia and the selected ASEAN countries The author will then discuss what the Quantity Surveyors need to know when dealing with ADR. This includes important factors influencing the selection of ADR method as a mean to settle dispute, and the ADR procedures published by the International Chamber of Commerce. The final part of this paper will be the identification of opportunities, where and how the Quantity Surveyor can fit in the fast growing ADR process.
KEYWORDS : ADR, Quantity Surveyors, selection, procedures, opportunities
1.0 THE MEANING OF ADR
Literally, ADR stands for Alternative Dispute Resolution. One may then ask “as an alternative to what”? The obvious answer to this question would be an alternative to the existing established Dispute Resolution Methods i.e. litigation and arbitration..
One may claim that the later dispute resolution method is not common and can only be chosen for use by agreement between the parties in dispute and therefore should be considered as part of ADR. The author is of the opinion that an attempt to define what is ADR should be put in perspective. Arbitration although is not a common method of resolving dispute is an established dispute resolution method and been supported by statute since 1952. Although its not as common as litigation, it is a fact that in many key industries such as construction, marine, insurance, etc.; arbitration is an established and standard method of dispute resolution commonly incorporated in standard forms of contract. In this sense, the author believes that ADR should refer to an alternative dispute resolution method other than not only litigation but also arbitration.
When we talk about ‘alternative’ one may also ask whether ADR can be a ‘true alternative’ or ‘substitute’ to litigation. According to Street (1989), ADR mechanism is not and cannot be recognised as an alternative, in the true sense of the court system1. It is a fact that in our legal system not all disputes can be resolved by ADR method. Disputes involving fraud cannot be referred to court as all criminal offences are State matters. Disputes relating to tort is difficult but not impossible to be resolved by ADR method. ADR is not suitable and appropriate for these cases because of the detailed factual discovery and many legal test need to be executed to determine liability and the simplicity of ADR will not be sufficient to justly resolve tort disputes.
Apart from the above, it is important to understand that ADR is an “interest based” method of resolution whereas litigation and arbitration is “rights based” in its attempts to find resolution to disputes. Therefore, it is apparent that ADR method cannot be the true alternative to litigation and arbitration. In this sense, it is better to promote ADR for dispute where the quality and features of litigation and arbitration is not fundamentally required.
2.0 THE FEATURES OF ADR
The key features of ADR includes:
(a) Low Cost - Low cost here refers to the cost for employing ADR as a method to resolve dispute such as fees for the appointment of representative, fees for third party such as mediator, experts, etc, rental of venue, documentation cost, etc. and minimising damages cost such as interest cost, etc incurred by the parties.
(b) Speedy Resolution - Speedy resolution is the main attraction for ADR and therefore, this feature must be preserved. In order to realise this feature protocols, procedures must be minimised and formality be reduced.
(c) Confidentiality/Privacy - Privacy and confidentiality must be strictly exercised and naturally, ADR offer these features.
(d) Flexibility - There must be flexibility in exercising ADR method. Rigid procedures must not be adopted.
(e) Perceived Fairness - ADR method appears to be a fair method for resolving international disputes as the parties chooses their own third party or expert to assist them in resolving the dispute. In other words, the interest and values of the parties are taken into account in ADR rather than litigation whereby the decision is refuted by the laws of the State and values of the judges.
(f) Effectiveness - ADR method must be effective in resolving the matter in dispute. It is important to take note that besides arbitration, other ADR method is not about determining who is right and who is wrong. It is more of a process to resolve dispute through compromise in a mutually conducive environment. Therefore, for ADR method to be effective, the parties must have the mutual spirit to resolve the dispute.
(g) Creative - Creative and explorative are an essential values in ADR method. It is not purely a technical skill, but more of an art to be practised by the third party with the main objective of getting the parties to resolve their disputes.
3.0 THE TYPES OF ADR METHODS
The types of ADR method includes:-
(a) Negotiations - It is a process of where the parties meet and negotiate solution to their disputes. There are no rules or procedure for carrying out a negotiation. Information exchange is the heart of any dispute resolution, therefore, parties are advised to make preparation so that the negotiations can be effective. It is fundamentally important that the person who has authorisation to make decision attend to the negotiation. Many negotiations are seen to be a waste of time because the attendees of the negotiation need to revert back to their superior for decision. The parties must also have a clear mind, good faith and desire to resolve the dispute.
(b) Mediation - Mediation2 can be generally defined as:-
“A private, informal process in which the disputants are assisted by one or more neutral third party/ies in their efforts towards settlement. The mediators advise and consult impartially with the parties in dispute in order to bring about a mutually agreeable resolution of disputes”.
(c) Early Neutral Evaluation – Can be generally defined as:-
“A process of which a neutral third party inquires into the merits of a dispute during the early stages of arbitration/litigation. The neutral evaluation of the case may assist in settlement of some of all issues prior to extensive discovery”.
As the definition suggests, this is a process of non binding adjudication aimed at encouraging evaluative discussions at early stage in view of obviating the need for a full blown hearing, preparation or even lead to a negotiation and settlement process.
(d) Expert Determination - As the term suggests, this is a process where dispute is brought to an Expert to be determined by him. No formal procedures involved and the Expert may request for submissions of case by the parties, conduct interviews, take evidence or make inspections. This method is best suited to refer disputes relating to discrete legal or technical issues for a decision.
(e) Mini Trials - Mini Trials as an ADR method which is widely used in the United States. It replicates litigation, but in a simplified form. The author prefers to describe Mini Trials as Express Trials, whereby focus is made on the relevant issues of a dispute only.
(f) Arbitration - Arbitration is the most widely used ADR method over the years. The incorporation of the provision to arbitrate in most standard forms of contract by many major industries such as insurance, construction, marine etc. contributed to the popularity if not mandatory use of Arbitration.
4.0 THE ENFORCEABILITY OF ADR
The resolution of a dispute achieved from ADR process can only be made binding by way of an agreement between the parties. If a party deviated from such an agreement, the other parties can take action by applying for specific performance in generality or sue for breach of contract.
The other aspects of enforceability is whether an agreement made between the parties to resolve dispute through ADR process can be enforced by the Court. The decision in the recent case of Cable & Wireless Plc vs IBM United Kingdom Ltd (2002) 2 All ER (Comm) 1041 states that for a reference to ADR to be enforceable, the provision referring to ADR must be certain and the procedures be identified. The decision of this case recognises ADR as a process of resolving dispute and made such agreement to ADR enforceable by the Court.
5. PRACTISES OF ADR WORLDWIDE
The United States and the United Kingdom have been in the forefront in the practice and development of ADR. Mediation for example has been practiced in the United States since 100 years ago to resolve labour dispute. Most variety of ADR can be found practiced in the United States such as mini trial, summary jury trial etc. In the United Kingdom, a more structured development can be seen.. Arbitration and adjudication is popular in the United Kingdom whereas mediation remained as a favourite approach to be explored.
In Japan, conciliation is a popular practice. Conciliation has the broadest meaning under the Japanese Civil Code where it refers to an agreement to settle disagreement through any method. Conciliation can be broadly categorised into 2, i.e. outside or within Court proceedings. The former refers to negotiation between the parties outside court and the later refers to a conciliation process recommended by the judge during trial. The resolution if the conciliation process is successful is reduced into an agreement know as the “conciliation agreement”. With the existence of this conciliation agreement, the parties lose the right to appeal and such agreement is enforceable in court. In the conciliation process, the judges are acting as conciliators. They suggest the possibility of settlement and guide the parties to agree to settle their dispute.
The practise of ADR in Australia is categorised into “facilitative” process such as mediation/conciliation, “advisory” process such as case appraisal and neutral evaluation and “determinative” process such as Arbitrator and binding expert determination. The most prevalent form of ADR is mediation, however, in the statutory context, conciliation is often used. Conciliation here is by no mean has a clear distinction with mediation. It maybe that in a conciliation process, the conciliators have more “interventionist” role than mediators such as promoting the principles of the statutory scheme in the conciliation process. ADR methods such as case appraisal and neutral evaluation are used where there is a requirement for the 3rd party to use his experience and guide the parties to a reasonable settlement. Arbitration in Australia is still in use but tend to be less popular as mediation and case appraisal being used more in the last decade. The building and construction industry has shown a steady swing towards mediation and other forms of ADR and away from arbitration. Many professionals associations have ADR schemes to train their members and promote the service. Many government agencies have extensive ADR programmes in place and there exist specialist commercial providers of ADR services such as Mediate Today3 and Australian Commercial Disputes Centre4 in Sydney. Many universities and private consultants provide training services for prospective ADR practitioners.
The most popular method of ADR in China is arbitration, governed by the China International Economic Trade Arbitration Commission (CIETAC). However, in most cases the CIETAC arbitration panel will arrange the parties to try to mediate, and the mediation process is more of an evaluative or directive rather than a facilitative model as practised by the West. In the event that the mediation fails, the dispute will then be brought to arbitration. The main concern in switching from mediation to arbitration process is that some of the information used in the mediation process may be brought in the arbitration against the parties, however the CIETAC rules make it clear that parties are not permitted to use information or offered concession from a failed mediation to bolster their positions in arbitration. Other forms of ADR methods are not popular and in use in China.
In Hong Kong, ADR is better known and practised. Arbitration, mediation and conciliation are the popular ones used. The Arbitration Ordinance consist of provision for conciliation as a method of resolving the dispute where a neutral party will offer an opinion on the merits and make suggestion for a suitable settlement. This is an active measure adopted and practised in Hong Kong to avoid arbitration where possible. This is because of the growing dissatisfaction of arbitration and its high cost. Besides arbitration and conciliation, Hong Kong have also explored and experienced the setting up of a single neutral body who is an expert in the filed of the contract to deal with possible dispute over a project. Examples being the setting up of a Dispute Review Board (DRB) to head off conflict before they become a dispute for Chep Lap Kok Airport and the setting up of a Dispute Review Advisor (DRA) for the construction of an extension to Queen Mary Hospital. These bodies appear to have minimised the number of scope of disputes whilst providing a speedy resolution. The other ADR method such as expert determination, mini trial etc does not seem to be popular or actively practised in Hong Kong. Mediation is the most popular. It refers to a facilitative process. The Hong Kong mediation council which is a recognised authority having about 150 mediators, was only part of the back. Hong Kong International Arbitration Centre then. Nevertheless, the mediation facility does not seem to be fully utilised for same reason.
Arbitration is the main method of ADR used in Thailand as a result of enormous increase in foreign trade and investment between 1980s and 1990s. This is supported by the development of institutional support such as The Thai Arbitration Institute (TAI) established in 1990. The legal framework also seems to be developing rapidly. The Thai Arbitration Act 1987 has been recently replaced by the Arbitration Act 2002, bringing it closely in line with the UNCITRAL Model Law. Thailand is a party to the New York Convention facilitating international enforcement of award. All these developments and establishments have promoted arbitration as the main ADR method in Thailand. Other non-confrontational ADR methods are also been traditional practised in the form of mediation or conciliation. This is reflected in the TAI whereby it requires the parties to meet and explore the possibility of conciliation before dispute is submitted to arbitration. There is also an institutionalised mediation centre being established as a parallel body to TAI. However, these other ADR methods are struggling for a place in Thailand.
Indonesia in general do not practise litigious culture, therefore commercial litigation is rare. The state of ideology “the Pancasila” calls for deliberation to reach consensus and discourage confrontation of any kind. This ideology have rooted in the society and is applied in the legal practise. Indonesia’s Arbitration Law (Law No 30 of 1999) and the rules of Badan Arbitration Nasional Indonesia (BANI) require the arbitration tribunal to first attempt to cause the parties to reach amicable settlement before commencing hearing. The Indonesian Law 1999 was not a totally new legislation but a comprehensive revision of the mid 19th century Dutch code of civil procedure. Therefore, arbitration is not new at all to Indonesia. Other ADR methods are not that well established or institutionalised. The culture of resolving dispute through informal negotiation is mainly practised by parties, either involving third party or not. Arbitration appeared to be the last resort to resolve the dispute.
In Malaysia, ADR has become the talk of the industry recently. It emerged from the so-called unsatisfactory performance of the Courts due to many backlogged cases pending for decision. ADR is normally referred to as mediation or conciliation. Although it has become the subject of academic discussion, the actual practise is yet to be seen. This may be due to the lack of understanding what it is all about and the expected outcome. It may also be contributed by the non-litigious society by cultural, values of the Asia people that is “we always talk to resolve our dispute” and “reference to third party” is the last resort for achieving resolutions. The provision for mediation has been incorporated into most standard form of contract including PAM which gives options to the parties to refer the dispute to mediation and CISM which made mediation as a pre-condition to arbitration.
There has been great effort to introduce ADR and educate users on ADR made by the Kuala Lumpur Regional Centre for Arbitration (KLRCA), the Bar Council and Construction Industry Development Board (CIDB), however the development in the practical application of mediation is yet to be seen. Other types of ADR methods does not seem to be much of a talk and appear actively in the Malaysian scene and remain as an academic topic for discussion. The Courts of Malaysia have not incorporated ADR as part of Court procedure as our Singapore counterpart. Nevertheless, there is certainly much interest in ADR.
6. WHAT QUANTITY SURVEYORS NEED TO KNOW WHEN DEALING WITH ADR?
(a) What QS need to know when dealing with ADR?
Generally, besides knowing what ADR is all about, where he can fit in and what he as a QS can offer. The other thing that A QS needs to know when dealing with ADR among others are:-
(i) Some Form of ADR Procedure
Before even carrying out any work dealing with ADR, one must have knowledge of the procedures he has to follow or which he wanted to implement to ensure that the ADR process is systematically approached, effectively managed, fairness maintained and economically run. To enable these to happen, some sort of procedures must exist A commonly and widely used procedure is the International Chamber of Commerce (“ICC”) ADR procedures. The key features of the ICC ADR procedures are that it is designed for consensual dispute resolution process, its non binding, flexible, confidential and complementary. The ADR method that can be used under the procedure are mediation, neutral evaluation and mini trial. The parties are expected to amicably agreed on the ADR method. In the event no such method been agreed, mediation shall be used5. The request for ADR shall be submitted to the ICC either jointly or unilaterally. If request is submitted unilaterally, the ICC will then send such request to the other party. If the other party replied that they are not interested to participate or does not respond to the request within 15 days, proceeding will not commence.
Under the ICC ADR Rule, the selection of third party6 is not by way of appointment by ICC. The ICC only takes note of the parties’ choice and administer the appointment. Only in the event that the neutral has not been designated by the parties or where the designated neutral do not agree to serve, the ICC will appoint someone making all reasonable effort to appoint a neutral having the criteria agreed by the parties.
The first task to be taken by the neutral is to organise preliminary meeting with the parties to agree on the settlement technique to be used and to define specific procedures and time table to be followed. All of these are to be agreed by the parties and now way its it is been dictated by the ICC.
As for cost related matters7, the cost of ICC ADR can be broadly categorised into ICC administrative expenses, the Neutral’s fees set by the ICC and the Neutral’s expense. The ICC will require a deposit to be paid by each party upfront and may be further requested from time to time as and when necessary.
The ADR proceedings can be put into end in a number of ways such as parties ending the process by signing a binding settlement agreement, agreement by the parties or unilaterally done to withdraw from the process and termination by the ICC in circumstances where the required payment has not been made or where it is not possible to appoint a Neutral.
(ii) Suitability of dispute to be referred to ADR
There may be a point of time when the parties to the dispute pose a question such as “what is the most suitable ADR method to be adopted for my kind of dispute?”
There are several factors that may have an influence over the choice of ADR method. These several factors among others are:-
(1) Whether the dispute involves a question of law and the parties which to claim for their rights;
(2) Whether the statements and credibility of a witness is critical in resolving the dispute;
(3) Whether the issues in dispute are limited to technical or cost related matters which can be determined by a Neutral who is an expert in the field;
(4) Whether the parties require a neutral opinion and on objective view of the dispute;
(5) The attitude of the parties whether there exists distrusts and unwillingness to compromise;
(6) The financial size of the dispute.
When the dispute heavily involves questions of laws and the statement of witness is critical in resolving the dispute or when there exists apparent distrust and unwillingness to compromise between the parties, arbitration may be the most suitable method of ADR to be adopted. Where dispute involve around technical matters, then Expert Determination may be adopted. If the parties seek for an opinion, then Early Neutral Evaluation (ENE) method may be adopted.
The financial size of the dispute also is primarily important in the determination of what ADR method is suitable to be adopted. Naturally, if the financial size is too large, a more formal and adjudicative method is preferable.
(iii) Barriers to the success of ADR
The Neutral and participants to an ADR process must know the potential barriers to the success of ADR. The following are among others typical barriers which may ruin the success of this amicable dispute resolution:-
(a) Cultural Attitudes – cultural here do not entirely refer to ethnic cultural aspect but more on organisational culture. The culture of a large conglomerate is different from a small closely held or family business entity.
In a large conglomerate organisation due to the multi level accountability factor, it is likely that they will practise defensive strategy, where as a small organisation may be eager to resolve the dispute by compromising and get on with their business.
(b) Emotions – apparently emotion often poses in surmountable barriers. Anger, suspicion, betrayal, mistrust are typical emotion of a commercial dispute. These emotions must be understood and managed if not progress towards resolving disputes may be impeded.
(c) Too much focus on position – if one put on too much focus on factual or legal position and seeking for who is right and who is wrong, then automatically barrier exists. Interminable exchanges of statements as to factual dids or did nots or as to legal rights or wrong, seldom serve any good purpose other than to create a higher barrier, which should be managed and avoided.
(d) The struggle to win – the perceived need for win often creates a large barrier. The parties must realised that the relentless drive to “win” may yield only a “loss-loss” result which only benefit earning fees out of it.
(e) Participants to ADR – the absence of an important participant may erect a barrier to success. Senior Management staff who can make decision must attend to an ADR proceedings. Neutrals appointed must insist and ensure that the right participants attend the ADR proceedings, if not to go ahead with the process serves no purpose.
(f) Party withdrawal from ADR Process – when a party is reluctant to proceed with the ADR proceedings and withdraw himself from the table, it then become a barrier to a successful ADR. Although ADR is a consensual process, an act of withdrawal from its portrayed as an act of unwillingness to resolve the dispute amicably. Thought it may give some negative impression to the party withdrawing, nothing more can be done if the parties are not willing to resolve their own dispute amicably.
(g) The Neutral Credibility, Qualifications & Availability – it is possible that one of the reason why the parties in dispute are reluctant to use ADR is because they lacked trust and confidence in ADR Neutrals. The lack of trust and confidence may refer to the qualifications, experience, impartiality and independence and skills of the Neutral. Generally, to resolve this problem, any institution promoting ADR must be very selective in the appointment of Neutral. Ongoing courses for self development must be organised.
(iv) Practical consideration in executing ADR process
The following are some points which are practical consideration in the execution of ADR process:-
(a) Be prepared – preparation is the most important factor to enable a useful process to be carried out. Lack of preparation will hamper the ADR process;
(b) A competent Neutral is a must in any ADR process;
(c) Get the right participant to the table;
(d) Let the parties in dispute play an active role in ADR process;
(e) The appointment of Counsel representing the parties, whenever possible should be avoided. If Counsel is appointed, they should be controlled against the act of extreme threats, excessive emotion, manipulating facts, etc.
(f) The parties must be controlled in the process of ADR such as discipline and their conduct so that the benefits of ADR process can be realised;
(g) Confidentiality must be maintained at all times;
(h) The Neutral must work towards creating and capturing value in the ADR process;
(i) Cost and fees must be kept to a minimal;
(j) The conduct of the Neutral must be impartial, ethical and professional with focus on the particular interest of the parties in dispute;
(k) Quality assurance must be practised throughout the ADR process.
(v) Quality Assurance in ADR
When we talk about “quality”, the focus must be on the four essential elements that are, the customer; the product; the process; and the operator.
It is beneficial for one to understand the relationship between these elements. The Customer in the ADR process are the parties in dispute. Therefore, what the customer expects out of the ADR process should be the primary concern of the Neutral and the parties themselves. However, it must be understood that when there are 2 customers involved each of them may expect different outcome from the ADR process although a common expectation could generally be for a “settlement”.
The Product of ADR is a clear ‘settlement’ between the parties in dispute. If adjudicative method of ADR been selected, then the product will be the Award of the Arbitrator and the report produced by the Expert in the expert determination process. In publishing this “adjudicative product”, the Neutral must be clear on the grounds of his decision and he must be able to provide the customer the rationale behind his decision. It is important to note that in the ADR method such as mediation or negotiation, there may be no solution or resolution at the end of the process. This does not mean the customer has not obtain any product for which he expected. It must be accepted that some dispute will simply not settle despite everyone’s best efforts.
The Process in ADR proceeding refers to the ADR methods used in resolving the dispute such as mediation, expert determination, early neutral evaluation, etc. which has to be chose carefully so that it is suitable and effective dependent on the nature of the dispute.
The Operator in ADR proceeding refers to the Neutral such as mediator, negotiator, expert, etc. In order to ensure the quality of ADR, the Neutral need to be competent in carrying out the process. For the Neutral to be competent, he will required to possess three vital ingredients such knowledge, skills and experience. The knowledge here refers not only to the areas of expertise, but also to the knowledge of human nature. It must also be appreciated that in many cases, ADR method is initiated after litigation process has begun and in many cases also it involves the issue of law that need to be decided. Therefore, some knowledge of the law is essential to be possessed by the Neutral. In terms of skill, what is essential are communication – listening, questioning, awareness of body language, para language, etc. All of the above knowledge and skills will develop by time, thus making one having the experience required for him to be a competent Neutral.
7. IDENTIFICATION OF OPPURTUNITIES FOR QS PARTICIPATING IN ADR PROCESS
(a) Is QS the appropriate person to participate in ADR process?
Most disputes relate to monetary claims. These monetary claims need to be decided upon. It normally lead from the issue of entitlement or simply the determination of what is fair and reasonable. The training of a QS, its position as cost and contracts advisor together with the experiences of the QS gained from many projects are all valuable and form as a strong basic quality for participation in ADR process. All of these qualities should be used to its full potential in ADR process.
(b) The Opportunities : Where do Quantity Surveyors fit in?
One may wonder where do the QS “fit in” in ADR? Apparently, in arbitration, the Architects and Engineers are the ones likely to be appointed as Arbitrators. What are the chances of a QS to be actively involved in other types of ADR?
The chances are wide opened, but needs very much effort from individuals and from the institutions to grab such opportunity. Based on a pilot study conducted in Hong Kong8, 30% of the composition of experts involved in ADR process are QS by background and this is a majority composition. Others are Civil Engineers (20%), Solicitors (15%), Barrister (15%), Builders (5%), Building Surveyors (5%) and Others (10%).
Where the QS can “fit in” in ADR processes are as follows:-
(i) As an Arbitrator or Adjudicator;
(ii) As an Expert Witness in arbitration;
(iii As a lay-counsel in arbitration process;
(iv) As an Expert in expert determination process;
(v) As a Mediator to facilitate mediation process;
(vi) As a Negotiator in a negotiation process.
Almost all of the potential roles that a QS can explore above require the change in mind-set and the initiative in aquiring new knowledge and skills. To succeed, QSs need to broaden its knowledge and skills. The Institution can assist by establishing a platform to teach the essential knowledge and develop the required skills.
(c) Participating in E-Dispute Resolution
E-Dispute resolution process has come to a reality now. In a global competitive environment and borderless communication, those who refuses and ignore what information technology can offer will be left behind. The role that can be played in E-Dispute process are as Neutral in Mediation, Expert Determination and or Early Evaluation process.
The internet has the potential to become an invaluable ADR mechanism that can be employed for the timely, efficient, and economical resolution for many disputes. Theodore (1999) in his book9 described that ‘negotiation can take place at anywhere and at anytime’ and that disputants need not be in the same room; and that they can negotiate by various means, including fax, email or net-meeting. Of course when there are advantages, there will also be drawbacks such as security issues, hackers problem, cyber law insufficiency etc. which hopefully will be improved over time.
Although there may be lots of resistant and lack of confident to E-Dispute resolution now, it may become a reality in the future. It is therefore wise for QSs to be aware of what is coming as opportunities in the future.
8. CONCLUSION AND RECOMMENDATION
It is hoped that this paper will somehow give some awareness to my fellow QSs on basic and preliminary matters which they must know before participating in ADR process. It is also hoped that the Institutions can somehow assist in the development of knowledge and skills among their members to enable them to participate well in ADR process when needed. The setting up of ADR committee within the Institution is suggested to promote the use of ADR. It is also recommended that a team of Expert be set up within the Institutions to undertake the task of a Neutral and to train young and potential experts.
The search for the best ADR method will go on in the future and the ADR process will always be relevant for any dispute settlement, therefore it is essential for QSs to be sensitive to the changes and trends of ADR at all time.
References:
1 L. Street, “Address to the Australian Law Reform Commission (1989), Reform 82”
2 Hindcey John (2002) quoting from 1991 ABA Forum Survey; Supra, Note 1 at Fn 48.
3 See website at www.mediate.com.au
4 See website at www.acde.com.au
5 See Article 5(2) of the ICC ADR Rules.
6 See Article 3 of the ICC ADR Rules.
7 See Article 4 of the ICC ADR Rules.
8 Sai On Cheung; Henry CH Suen; Tsun Ip Lum, “Fundamentals of Alternative Dispute Resolution Processes in Construction” (2002), Journal of Construction and Management (September/October 2002), pg 409-417
9 Theodore W Kheel, “Keys to Conflict Resolution: Proven Methods of Settling Disputes” Four Walls Eight Windows, New York, 1999.
The speaker:
Mohd Norazman Zaini
James R Knowles (Malaysia) Sdn Bhd
Suite 11.1, 11th Floor, Menara Aik Hua
Cangkat Raja Chulan
50200 Kuala Lumpur
Malaysia.
norazman.zaini@jrknowles.com
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1 comment:
This is an excellent article on ADR in Malaysia. I very much needed this resource for my Law paper in uni in Australia.
Thanks for sharing.
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