2.3. Shortcomings of ADR Mechanisms

♤ Wastage of Time/ Money if the Case is Not Resolved: The cases referred for a settlement through ADR go unresolved, the parties to the unresolved cases have no choice but to approach court of law for adjudication of the disputes on merits leading to wasting time and money spent in ADR mechanism. For example – Ayodhaya mediation had always failed to reach a solution.

♤ The Possibility of Bias: The possibility of bias, though negligible, or a conflict of interest or at least the appearance of impropriety, may arise if even a neutral person in ADR gets a good deal of repeat business from the same institution.

♤ Compromising Confidentiality: Confidentiality is one of the most talked after phenomenon of the ADR mechanism. However, in practice, it might prove to be a double edged weapon, as it may lead to certain difficulties and obstructions.

o It may be difficult for the parties to use the award or any other part of the arbitration in later proceedings.

o In many a cases, it is necessary to disclose the time/ date and place of the said arbitration proceedings to the third parties and or concerned officers and thereby compromising the confidentiality of the system.

♤ Limited Judicial Review Another everlasting problem faced by parties taking recourse to the ADR system is the power of limited or negligible Judicial Review. An arbitral award is final and binding on the parties and excluded from appeal to the courts in connection with it. The court review of arbitral awards is quite limited. All the Statutes dealing with ADR mechanism states that the settlement reached through ADR mechanism is final and binding and can be enforced by a court as decree.

♤ Informal, more Opportunity of Abuse of Power: The statutes governing the ADR mechanisms do not cast a duty upon the arbitrator, mediator or conciliator to follow any written procedural system to bring the parties at dispute to a settlement. They are free to follow their own procedure which may sometime leads to, though very uncommon, abuse of power.

♤ Lack of Power to Establish Legal Precedents: The remedies established, or afforded to the parties in dispute, in ADR, cannot be binding on future cases, i.e. the remedy of one case cannot be taken as the guiding stone for another and cannot be taken as a legal precedent.

♤ Unfamiliarity with the Procedure and Lack of Awareness: Last but not the least, one of the most glaring difficulties faced by the alternative methods of dispute resolution is that most of the people are unfamiliar with the processes since this is a fairly novel concept. It is the lack of knowledge and awareness with respect to the various methods for dispute resolution that more often than not discourage parties from considering this option seriously.

Thus, certain steps can be taken in this regard:

♤ People especially the weaker-poor sections need to be made aware of availability of such mechanisms.

♤ Mediation should be popularized as a profession and reforms should be undertaken to establish ethical standards, quality control and accountability of mediator.

♤ Expanding the role of ADRs in pre-litigation stages as at present, most of them come into picture once the parties enter into litigation.