The importance of ADR has increased significantly in recent years also following a series of reviews and reforms suggested by the European Council and Commission aimed at facilitating access to justice across the member states. One of the results of these reviews was Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters (the “EU mediation directive”), aimed at harmonising the rules applicable to cross-border mediations in the EU.
Aside from a conventional negotiation between parties, which typically involves no intervention from a third party, all of the remaining ADR options involve varying degrees of intervention form a third party and can be divided into those which are non-binding and those which are binding on the parties.
Non-binding ADR options
The most common non-binding option is mediation, a voluntary negotiation between disputing parties facilitated by a neutral third party mediator.
Binding ADR options
The most common binding form of ADR is arbitration a process where parties refer a dispute to one or more arbitrators, instead of a national court, and agree to be bound by the arbitration decision (“award”). The arbitrators may be chosen by the parties or nominated by an arbitration institution; they are usually legally trained and highly experienced in the handling of arbitration proceedings and the special field of the dispute, such as patent infringement disputes etc. The decision of the arbitrator(s) is legally binding on both sides and enforceable almost worldwide, based on an international convention, if necessary, with the support of national enforcement authorities (usually courts).