Conciliation: An Amicable Mechanism to Settle Disputes

This article was originally written as an academic paper and is republished here as a knowledge-sharing resource. It has been lightly formatted; statutory references reflect the law as it stood at the time of writing.

By:

Raj Deepak Chaudhary & Saumya Srivastava

Introduction

THE terms Alternate Dispute Resolution (hereinafter referred as ‘ADR’) has its origin in 1960’s in US Literature. As the name suggests, ADR refers to a wide range of dispute resolution mechanism or techniques that share one essential characteristics, that it is totally different from the convention form of deciding disputes i.e. litigation. Today, lawyers and their parties are increasingly preferring to resolve their disputes using ADR mechanism because it is speedy & flexible. As a result, ADR is being used virtually in all the different disciplines (fields) like in employment disputes, industrial disputes, family disputes, personal injury, commercial disputes, consumer disputes, property disputes and many other areas.

Conciliation is a key and notable form ADR Mechanism which provides for an amicable approach to settle disputes of any nature before a third party. How the conciliation is an effective & efficient mechanism for resolving dispute is being addressed in this paper. Part I presents an overview of various dispute resolution methods, its origin and development in India. Part II discusses the definition of conciliation and its use in various fields. Part III presents argument in favour of conciliation as an ideal means for settling disputes. This article concludes that conciliation can be a of greater use to settle dispute in any field rather than the more complexed routes of dispute settlement like arbitration.

Part I

Overview Of Various Dispute Resolution Methods, Its Origin & Development In India

Overview Of Various Dispute Resolution Methods

In the past few decades the ADR has shown an exponential growth, parties and their lawyers increasingly seek means to resolve their differences without resorting to litigation, and thus they increasingly turn to alternative mechanisms to attempt to resolve differences. As a result, arbitration, mediation, conciliation and other alternative dispute resolution mechanisms are commonly utilized today in such disparate fields as securities regulation, commercial law, employment law, domestic relations, labour law, medical malpractice, construction law, international private law, and many other areas.

The Australian Law Reform Commission described ADR in 1996 as: “Processes that may be used within or outside courts and tribunals to resolve disputes, where the processes do not involve traditional litigation processes. The term describes processes that are non-adjudicatory, as well as adjudicatory, that may produce binding or non-binding decisions and includes processes described as mediation, evaluation, case appraisal and arbitration”.

Today, there are many types of dispute resolution methods which are used to solve disputes ranging from domestic to commercial & from labour to international disputes. Other than conciliation (which is discussed later), mentioned below are some of the most commonly used methods for resolving disputes: -

Arbitration

Arbitration is a system whereby parties agree to submit their dispute to a third party, who holds an evidentiary hearing and issues a final and binding decision. The primary aim of arbitration is a just resolution of the disputes by a private judge outside the conventional litigative process, expeditiously and conveniently. Parties select the arbitrator and design the hearing procedures themselves. Decisions of an arbitrator can only be appealed to a court on narrow grounds, such as fraud or misconduct by the arbitrator. Errors of fact or law by an arbitrator cannot be appealed.

Mediation

It is a process by which parties utilize a third party, known as a mediator, to help them

resolve a dispute. Generally, mediators meet with parties together or separately & attempt to get them to agree to a settlement. The goal of mediation is for the parties to reach a voluntary settlement which is then reduced to writing and becomes an enforceable contract. Section 89 of C.P.C recognizes mediation.

Mini-Trial

It is a non-binding ADR method of resolving disputes, primary business disputes that combines the techniques of negotiation, mediation and advisory arbitration. It is a voluntary procedure in which parties engage in a truncated, non-binding trial before a neutral they select to be their judge. The mini-trial is usually used by corporate defendants to give executives an opportunity to assess the strength of their own case and that of their opponent.

Med-Arb

It is a hybrid process having combination of mediation & arbitration, In Med-Arb a neutral third party first attempts to achieve a mediated settlement of a dispute. If mediation fails, then the same neutral party becomes an arbitrator and conducts a hearing and renders a final decision.

Lok Adalats

It means ‘People’s Court’. It is basically meant for the resolution of people’s disputes by using conciliatory and persuasive techniques and voluntary participation and discussion for arriving at a mutually acceptable solution and the whole emphasis is on conciliation rather than adjudication. The settlement arrived before Lok Adalat gets crystallized into the award of the Lok Adalat which is deemed to be a decree of a civil court and is final and binding upon the parties and no appeal lies against such award.

Negotiation

Negotiation is communication for the purpose of persuasion, it is the pre-eminent mode of dispute resolution. Negotiation is an ADR process by which the parties resolve their disputes themselves by arriving at a mutually acceptable amicable solution. In this mode of settlement, the parties or their representatives voluntarily sit together themselves and negotiate directly by putting the factual content of the disputes and discuss their claims and counter claims, earmarking the extent to which they can forego their claims and their readiness to accommodate each other.

DEVELOPMENT OF ADR IN INDIA

The ADR methods are not new to India and have been in existence in some form or the other in the days before the British colonial rule, in fact, the Panchayat, Kulas (family assemblies), Srenis (guilds of men of similar occupation) and Parishad etc. were the primary instruments of law and order, a means of conciliation and arbitration in the ancient Indian communities. Kautilay’s Arthashastra also refers to the process of conciliation.

The Arbitration Act, 1940 was an early step towards recognizing and providing an alternative mode of dispute resolution outside the courts, although the entire process under the Act turned out to be court oriented. Later via 42nd Constitutional Amendment, 1976 Article 39A was inserted in the Indian Constitution, which mandates the State to secure that the operation of the legal system promotes justice on a basis of equal opportunity, and ensure that the same is not denied to any citizen by reason of economic or other disabilities.

Later Legal Services Authorities Act, 1987 was passed which provided for Lok Adalat. In 1989 Malimath Committee was formed to propose remedial measures to manage and ease out the judicial dockets. Then on 6th October, 1995 the ICADR (International Centre for Alternative Dispute Resolution) was set-up with a view to promote and encourage teaching and research in area of ADR mechanism. Subsequently based on United Nations Commission on International Trade Law (UNCITRAL) The Arbitration and Conciliation Act, 1996 was enacted in India.

However, the turning point was the enactment of section 89 in Code of Civil Procedure (C.P.C) in 2002 which empowered the courts to refer the parties to ADR for resolution of pending lawsuits. This provision acted as a trigger & a turning point for ADR revolution in India.

DEVELOPMENT OF ADR IN U.S.A

Since colonial times, religious groups, voluntary associations and other small subcommunities have eschewed the formal judicial system and established their own dispute resolution mechanisms to resolve disputes between members.

In 1906 Roscoe Pound gave his speech to the American Bar Association in which Pound made a powerful plea for judicial reform. The Pound conference is considered as the founding moment of the modern ADR movement. In the immediate aftermath the American Bar Association Committee on Dispute Resolution recommended that in three jurisdictions a pilot multi-door courthouse programs should be set up. The practice has spread rapidly so that, as of 1998, one-quarter of the 94 federal district courts and one-half of all state courts have either mandatory or voluntary arbitration programs as part of their judicial process. In addition, 51 federal district courts have court-annexed mediation, and 48 reports that they offer summary jury trials as an ADR option. And 14 federal districts have early neutral evaluation programs. In all, three-quarters of federal district courts now authorize one or more forms of ADR, as compared to a small handful in the late 1970s.

The use of ADR has also grown dramatically in the private domain. The American Arbitration Association had 92,000 arbitration requests filed in 1998, an increase of 21 % over those filed in 1994. JAMS, a for-profit ADR provider that utilizes primarily retired judges to hear arbitration cases, has offices in 30 cities and handled over 20,000 cases in 1996.

The use of industry-specific arbitration systems and international arbitration systems has also expanded dramatically. For smaller disputes, over 350 neighbourhood justice centres have been established in US to offer ADR services for different matters like landlord-tenant, consumer-merchant or neighbour disputes. In 1990, Congress enacted the Administrative Dispute Resolution Act, which requires federal agencies to consider ADR in settling disputes thus numerous federal and state agencies now started to utilize ADR procedures to handle their caseloads, like The Equal Employment Opportunity Commission, the U.S. Department of Labour, State Human Rights Department, and Consumer Protection Departments that have begun to utilize mediation, conciliation and arbitration to resolve claims.

Part Ii

Conciliation & Its Use In Various Fields

The Halsbury’s Law of England defines Conciliation as a process of persuading the parties to reach an agreement. Conciliation involves a settlement procedure wherein an impartial third party (conciliator) enables and steers the disputant parties to arrive at a satisfactory and acceptable settlement of a dispute. It is considered as an effective and meaningful alternative to litigation for resolution of disputes through the guidance and assistance of a neutral and impartial third party. But conciliator had no authority to impose on the parties a solution to the dispute. The consensual nature of the dispute resolution process allows parties to join in a friendly search for an amicable solution, without procedural restraints or protracted battles over formal technicalities and the parties are encouraged to visualise options which provide solutions for conciliation and it affords an excellent ADR mechanism for amicable resolution outside the litigative process.

The 2002 UNCITRAL Model Law on International Commercial Conciliation defines conciliation as: ― “… a process, whether referred to by the expression conciliation, mediation or an expression of similar import, whereby parties request a third person or persons (“the conciliator”) to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship. The conciliator does not have the authority to impose upon the parties a solution to the dispute.”

ADR IN AVIATION

The air transport sector generates the largest share of cross-border consumer complaints.

in European Union ECC-Net is responsible for handling air disputes via ADR methods. In the UK, the Civil Aviation Authority (CAA) operates a complaints handling service for air passengers. The CAA is a public corporation that was established by Parliament in 1972 as an independent specialist aviation regulator and provider of air traffic services. In Germany the German Conciliation Body for Public Transport (söp), is an independent and neutral organisation that offers its “inter-modal” service across Germany to customers of train, bus, flight and ship companies that are part of the scheme. The regulation on compensation for infringement of air passengers’ rights (Regulation no. 261/2004) come into force in 2004 in EU. In Germany the Luftfahrtbundesamt (LBA), in the UK the CAA.

ADR OF IP DISPUTES

As a general principle, IPR are territorial in scope, while the contracts and licenses concerning IP rights and transactions extend beyond a single nation territory. Further, ADR mechanism tend to provides speedier resolution of disputes than public court adjudication and because of the procedural flexibility of ADR results in the proceeding taking less time. Also in case of IP disputes an expert in technology for deciding the dispute correctly which is difficult in case of public courts.

ROLE OF ADR IN INDUSTRIAL & EMPLOYMENT DISPUTES

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ROLE OF ADR IN FAMILY DISPUTES

Parenting Planing, Family Mediation, Colaborative practice, estate and succession planning

Part III:

Conciliation - An Ideal Means For Settling Disputes