Advantages and disadvantages of dispute resolution processes



The advantages and disadvantages of the major dispute resolution processes may be summarised as follows:

Arbitration



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

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


Expert determination / adjudication



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

Disadvantages


  • The expert cannot go beyond the jurisdiction specified in the contract
  • 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


Litigation



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

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


Mediation



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

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


back to top | next chapter
Updated 14 July 2014