Alternative Dispute Resolution: Enforcing Your Rights Efficiently and Economically
The courts of this country should not be the places where resolution of disputes begins. They should be the places where the disputes end after alternative methods of resolving disputes have been considered and tried.
Sandra Day O'Connor, former Justice of the United States Supreme Court
International trade provides a fertile ground for commercial disputes, which can arise in many forms. Let’s take a simple example: a seller in one country delivers goods to a buyer in another country, and the buyer refuses to pay. Determining how to resolve such a dispute is crucial, and without a pre-agreed mechanism, businesses may face significant financial risk.
Although England and Wales can pride themselves on a world-renowned sophisticated judicial system, for decades, businesses have sought ways to resolve their commercial disputes while avoiding bringing a claim before a State court. Their aim is to find a process that is quicker, more cost-effective, and more efficient. This has led to the widespread use of two alternative dispute resolution methods: arbitration and mediation.
Arbitration
Arbitration is a private process in which the parties agree to submit their disagreement to an independent and impartial arbitrator whose decision is final and legally binding. Given that arbitration requires the parties’ consent, they often agree to it before any dispute occurs by including an arbitration clause in their contracts (see LCAM’s Model Clauses for templates).
Mediation
Mediation, on the other hand, is a confidential and voluntary process in which a neutral mediator facilitates communication between the parties to help them reach a mutually acceptable settlement.
However, as these processes developed over time, some of the features that originally made them attractive to commercial parties began to diminish. Some businesses – including SME’s – have been reluctant to bring claims under arbitration clauses due to the fees associated with the process (mostly the administrative fees charged by the institution overseeing the case and the fees charged by the arbitrators to resolve the dispute).
The London Chamber of Arbitration and Mediation (LCAM) seeks to restore the original advantages of alternative dispute resolution by offering streamlined, accessible, and cost-effective arbitration and mediation services, without compromising on the quality of the arbitrators and mediators. With its Arbitration Rules, Expedited Arbitration Rules and Mediation Procedures, LCAM’s services ensure access to high-quality alternative dispute resolution for commercial disputes of all types and sizes. Reach out to the LCAM team and learn how we can help your International Trade activities run free of financial risks.