Legal Information Sheet - Mediation, Arbitration and Alternative Dispute Resolution

Alternative Dispute Resolution

Alternative Dispute Resolution (or ADR) is a general term which refers to an impartial person assisting in the resolution of a dispute. ADR can take a number of forms, including:

  • facilitative, for example, as mediation, which uses a variety of methods to assist parties to identify the issues and reach an agreement about the dispute. Mediation is a voluntary process (except in the case of family court proceedings where custody of child/ren is in question, where mediation by a registered mediator is required) in which those involved in a dispute jointly explore and reconcile their differences;  
  • advisory, such as conciliation or expert appraisal, where a practitioner is employed to more actively advise the parties about the issues and range of possible outcomes;   
  • determinative, for example arbitration, which uses more formal techniques to inform the arbitrator so that s/he can determine an outcome.

Benefits of the various forms of ADR include:

  • each party can learn about the other's interests more clearly;
  • the parties can learn skills for conflict management from which can generalise to future disputes;
  • the parties have a relatively high degree of control over the process and outcomes suitable to their needs;
  • increased chances of a lasting agreement because reflects parties' needs, it is not imposed, and it is one in which they have invested time and effort;
  • less threatening to the parties than formal court processes.

Construction Contracts Act

An example of arbitration is payment disputes under the Construction Contracts Act 2004 (WA) for parties in the construction industry.

The claimant in said arbitration can be:

  • a contractor claiming against a principal;
  • a subcontractor claiming against a contractor; or
  • a supplier of goods claiming against a subcontractor.

The claimant must lodge a claim within 28 days from when the payment was due under the contract or from when it was rejected, either completely or in part.  The adjudication claim must set out all the necessary details of the contract, the claim under the contract that is now in dispute and any other relevant facts.  For more information about making a claiming for arbitration under the Construction Contracts Act you can visit the Western Australian Department of Commerce.