Alternative dispute resolution

Alternative dispute resolution (ADR) is the term used for a number of dispute resolution processes that are an alternative to traditional court proceedings. Some ADR processes are court-based, which means that the parties are involved in court proceedings but the court has recommended or directed them to engage in ADR. Other ADR processes are separate to the courts, such as Community Justice Centres. ADR is used in civil proceedings, rather than criminal proceedings.

ADR can be beneficial even if a resolution is not achieved and the dispute proceeds to court. The ADR process can help to define the real issues in dispute, so that when the dispute reaches the court the court and parties can concentrate on those issues, and not waste time on matters that they do not disagree about.

Court-based ADR

There are three basic types of court-based ADR.

Mediation

A neutral and independent mediator assists the parties to work out their own solution by exploring options. The options are often broader than those that can be considered by the court. The mediator does not impose a solution on the parties.

Neutral evaluation

A neutral and independent evaluator assists the parties to identify the real issues in the dispute. The evaluator may assess the strengths and weaknesses of the case and offer an opinion as to the likely decision of the Court, for example, which party is likely to win and the amount of a likely monetary award. The opinion given by the evaluator is not binding.

Arbitration

A neutral and independent arbitrator assesses the strengths and weaknesses of the case and makes a decision as to which party has the strongest case and the appropriate amount of damages. Arbitration is more adversarial in nature than mediation or neutral evaluation. Parties to a commercial contract sometimes include as a term of the contract that any dispute will be referred to an arbitrator, and the parties agree to be bound the decision of the arbitrator without going to a court.

Benefits of ADR

Courts and tribunals encourage parties to civil proceedings to use alternative dispute resolution to reach agreement between themselves, and so to avoid the expense and time of a court case. Promoting alternative dispute resolution allows court time to be concentrated on intractable disputes that cannot be resolved by agreement. Many courts and tribunals provide alternative dispute resolution measures to assist parties, and in some civil matters can require parties to attempt to resolve their disputes through some form of alternative dispute resolution before the matter proceeds to a hearing before the court or tribunal. For example, the Supreme Court can refer cases to mediation or neutral evaluation without the consent of the parties.

There are numerous benefits to using alternative dispute resolution, such as:

  • an early resolution of the dispute
  • lower costs to the parties involved
  • a faster result
  • greater flexibility in resolving the dispute
  • greater ‘ownership’ of the resolution of the dispute by the parties.

ADR can be beneficial even if a resolution is not achieved and the dispute proceeds to court. The ADR process can help to define the real issues in dispute, so that when the dispute reaches the court the court and parties can concentrate on those issues, and not waste time on matters that they do not disagree about.

Community Justice Centres

Community Justice Centres resolve disputes through mediation, free of charge to members of the public. There are Community Justice Centres throughout New South Wales, providing an informal and impartial dispute resolution service to all sections of the community and government agencies. The types of matters dealt with by Community Justice Centres includes family disputes and youth conflict, workplace grievances, neighbourhood arguments and community disputes.

Ombudsmen

Many governments have established an office of Ombudsman, whose role is to monitor and report on many aspects of government activities on behalf of citizens. An Ombudsman has powers to investigate complaints and to write reports and make recommendations, but does not have power to institute civil or criminal proceedings.

Some private sector industries have also adopted the model of an Ombudsman to deal with complaints by consumers. Examples include the Banking Ombudsman, the Telecommunications Industry Ombudsman and the Energy and Water Ombudsman. These private sector Ombudsmen do not have statutory powers to investigate, but their recommendations are taken seriously by industry participants.

Ombudsman services

You can contact an ombudsman if you wish to make a complaint or resolve a problem with a government agency. There are a number of ombudsman services available.

  • NSW Ombudsman is responsible for the independent oversight and scrutiny of government agencies and some non-government organisations that provide services to the people of NSW.
  • Commonwealth Ombudsman deals with complaints about Commonwealth Government departments and agencies.
  • Energy & Water Ombudsman NSW (EWON) provides a free, fair and independent dispute resolution service for all electricity and gas customers in NSW, and some water customers.
  • Australian Financial Complaints Authority (AFCA) provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints. 
  • Telecommunications Industry Ombudsman provides an independent dispute resolution service for customers who have a complaint about their telephone or internet service in Australia.