The Benefits of Alternative Dispute Resolution (ADR) Mechanisms in Nigeria
Alternative Dispute Resolution (ADR) refers to a range of processes designed to help parties resolve disputes without resorting to litigation. These mechanisms include mediation, arbitration, conciliation, and negotiation, all of which provide flexible, efficient, and cost-effective alternatives to settling disputes between parties.
In Nigeria, where the court system often faces significant delays due to backlogged cases, ADR has become an increasingly popular choice for both individuals and businesses. Initiatives like the establishment of Multi-Door Courthouses by the judiciary in some States across Nigeria, have further boosted its adoption, making ADR a valuable tool for resolving disputes in a way that saves time, reduces costs, and fosters collaboration.
ADR’s role has become so integral in the Nigerian legal system that legal practitioners in Nigeria are required by law to inform their clients about the option of ADR before proceeding with or continuing litigation in court.1
This article explores the many benefits of ADR and highlights why it is an ideal dispute resolution mechanism for those seeking efficient and effective dispute resolution outcomes in Nigeria. Additionally, it provides practical guidance on how commercial parties can determine their ADR mechanisms at the contracting stage to avoid future disputes and ensure smoother conflict resolution.
Why Choose ADR?
Speed of Resolution
One of the most important benefits of ADR is that it offers swift resolution of disputes. The Nigerian court system is often plagued by delays due to overwhelming case volumes. ADR provides a timely solution, with disputes often resolved in weeks or months, depending on their complexity and the cooperation of the parties involved. This swift resolution ensures business continuity and minimizes disruption.
Flexibility and Control
Unlike litigation, where parties must adhere to rigid procedural rules and laws, ADR empowers disputing parties to control the process. From choosing the timeline to selecting a mediator or arbitrator with relevant expertise, ADR ensures a tailored approach that meets the specific needs of each dispute.
Cost Efficiency
ADR offers a much more affordable alternative to litigation. Litigation can be costly due to legal fees, court expenses, and prolonged procedures, often made worse by delays in the court system. On the other hand, ADR tends to be more affordable, enabling individuals and businesses to resolve disputes without incurring the substantial costs associated with litigation.
Privacy and Confidentiality
A very significant advantage of ADR is that it affords parties the right to privacy and confidentiality, which can be especially valuable in sensitive cases. Court cases are often matters of public record (i.e., records such as filings and judgments may be made available to a 3rd party upon application to the court for a certified true copy), but ADR proceedings are typically private, this helps protect the reputation of the parties involved and prevents sensitive information from being available to the public.
Preservation of Relationships
ADR emphasizes collaboration and mutual understanding, particularly in mediation and conciliation. By fostering open dialogue, ADR helps maintain and even improve relationships. This aspect of ADR is highly beneficial in family disputes, employment conflicts, and commercial disagreements, where ongoing relationships are essential.
Specialized Expertise
In arbitration and mediation, parties can select a mediator or arbitrator with specific expertise relevant to their dispute, which is not always possible in traditional court settings. This advantage is particularly helpful in complex commercial or technical cases where specialized knowledge can facilitate a more informed and accurate resolution.
Reduced Formality and Stress
The informal nature of ADR eliminates the intimidation often associated with courtroom trials. This relaxed setting allows parties to focus on resolving the dispute rather than navigating procedural hurdles. Additionally, the flexibility of ADR encourages creative solutions that may not be achievable in court.
Conclusion
To fully harness the benefits of ADR, commercial parties should proactively determine their preferred ADR mechanisms at the contracting stage by including ADR clauses that specify the chosen dispute resolution process. These clauses should explicitly state whether disputes will be resolved through mediation, arbitration, negotiation, or a combination of any of the ADR mechanisms. For instance, in large-ticket commercial agreements, it is typical to have a dispute resolution process kickstart with high-level negotiations between senior staff members (e.g. executive directors) of the parties, before it then goes to mediation or arbitration, as the case may be.
It is pertinent to state that ADR is not without its challenges—like enforcement issues, power imbalances, and limited options for appeal—the benefits usually outweigh these drawbacks. For businesses, saving time means saving money, so ADR is often the most optimal method in this regard. Ultimately, adopting the right dispute-resolution mechanism comes down to understanding the specific needs of each case and recognizing the strengths of ADR within the Nigerian context. While litigation has its place for certain matters, ADR should be the preferred choice for parties seeking efficient, private, and amicable resolutions. By embracing ADR, businesses and individuals can focus on what matters most: achieving their goals without unnecessary distractions.
This alert is only intended to provide general information on the subject matter and does not serve as legal advice. For any questions or clarification, please contact Esosa at esosa@hamulegal.com.
