The growth of business comes with the likelihood for disputes to exist on several levels. These disputes could be Labour disputes, Intellectual Property disputes, Management disputes, finance related disputes, contract breach-oriented disputes etc.
With the aspect of sustainability being at the center of business operations to boost profits and stability in the long term, getting caught up in a court case will cost time and money and could also put at risk the reputation of the business. The question is, what alternatives are available to managing disputes without resort to court?
Alternative dispute resolution (ADR) can serve as a fairer, more efficient, and less confrontational way to solve disputes. We can look at mediation, arbitration, and other ADR mechanisms that can help large businesses avoid costly legal proceedings.
What alternative dispute resolution (ADR) methods mean for large businesses in Cameroon
There are several advantages for larges business that engage Alternative Dispute Resolution over court cases in Cameroon. They can be more efficient, less costly, and more humane than taking both parties to court where every detail of the case will be made public. It’s an effective way to solve issues in areas such as contract law.
However, there are cases where ADR isn’t going to be the appropriate mechanism to engage. These include cases where criminal law has been breached. In these cases, a court case becomes unavoidable.
What does ADR mean for large businesses in Cameroon?
- Maintaining confidentiality
Preliminary talks are the beginning of ADR as it establishes how the dispute will be resolved and what terms both parties will be willing to abide by. This can include defining roles and responsibilities, expected timelines and expectations, as well as a confidentiality agreement.
This is useful in any case where businesses don’t want their information leaking out into the public where competitors can see it.
- Cost-efficiency and flexibility
Is ADR more cost effective than going through court? The answer is in the affirmative. While arbitration costs can get high, the option to go through expedited hearings or controlled disclosure processes can save money compared to court proceedings.
This flexibility is how ADR has spread to areas of disputes such as employment, IP, and finance. As a cheaper alternative to going to court, ADR can increase access to justice by giving people a more affordable way to have their issues resolved. Hence permitting the parties to find common ground to resolving their disputes permanently.
- Preserving business partnerships
As the saying goes “The worst out of court settlement is better than the best court judgment”. By focusing on a mutually beneficial outcome, Alternative Dispute Resolution is less of a bitter, drawn-out conflict than most court settings.
This can help preserve business relationships for the future between individuals or companies. This is because Mediation is all about fostering dialogue and empathy, while arbitration gives both parties more of a say in what they want to happen.
Many large businesses and companies in Cameroon put an emphasis on preserving relationships and saving their face and reputation where possible because reputation is fundamental to business growth in Cameroon.
By giving people more of a say in how situations are handled, ADR can help all parties handle issues discreetly and avoid having to convince a judge that the others are totally in the wrong.
- Swift and efficient proceedings
For large businesses in Cameroon, time is money. ADR puts all parties in a position to determine how long the proceedings could take, which is important when cases could slow down the day-to-day business. Many rules of the arbitration process are built to impose timelines on parts of the process, which might include sanctions and financial penalties for arbitrators who delay the process.
- Autonomy in choosing procedures and regulations
One of the strengths of ADR is letting businesses and individuals choose the way they handle disputes. ADR permits the parties to choose the persons to sit as arbitrators on the matter. Another of the most important parts of that is letting them choose the procedures and regulations they want to abide by.
Alternative dispute resolution methods for large businesses in Cameroon
As earlier mentioned, the growth of a business means the stakes become higher and potential disputes can get even bigger with the capacity to disrupt day-to-day operations which might put the entire business at risk.
Several ADR methods have been developed to serve all kinds of situations. Those include mediation and arbitration, as well as methods such as conciliation, adjudication, and collaborative law.
Mediation
In the mediation process, both parties try to reach a mutually beneficial outcome with the help of an independent mediator.
There’s no fixed way of doing this, but it usually begins with an exchange of case summaries and any supporting documents. This is why it can be good to keep secure electronic records and use tools like order management software or ERP software to make sure that your supporting documents are always accessible.
The mediator then tries to find common ground and figure out a potential solution that gives everyone a little of what they want. If they reach an agreement, all parties will sign legally binding terms.
The benefits of mediation include the privacy and non-confrontational nature of the process. This helps businesses keep matters private while preserving business relationships. While arbitration ends with someone being awarded compensation, mediation can end with any agreement that settles the dispute.
Early neutral evaluation
Early neutral evaluation (ENE) is a mechanism which involves having a neutral party evaluate the potential success or failure of court proceedings.
This can be done in court, but both parties can save money if this is done outside of court. ENE is useful when parts of the dispute involve complicated legal or technical information. By consulting an expert early on (advisably a legal professional like an Attorney or Jurist), both parties can save time and money having lawyers pore over the details in court.
ENE gives both parties a better idea of what taking the dispute to court might mean for them. By doing that, it can increase the chance of a pre-trial settlement. But, if the evaluator decides that one party is in the right, this can cause them to dig into their existing position and reduce the chances of a compromise.
Arbitration
Arbitration as recognized by the OHADA Law is a “judicial” form of ADR where the outcome is decided by a third party, whether that’s one person or a panel. This outcome is called an “arbitration award” and the decision is usually irreversible.
Arbitration is often included as a condition of commercial contracts: if a dispute arises out of the contract, it specifies arbitration as the preferred route or pre-litigation route to solving it. This is because arbitration is quicker and more confidential than court proceedings.
Given that one or both parties can choose the arbitrator(s), they can select one or more qualified experts to make the decision. Because arbitration is a simple method which is legally recognized and enforceable in countries like Cameroon and the OHADA region. This makes it also ideal for cross-border disputes.
Conciliation
Conciliation is an informal conflict resolution process similar to mediation.
A third party (the “conciliator”) will take the parties through a confidential process aimed at finding a compromise or common ground. The conciliator in trying to find common ground, will clarify any misconceptions, and figure out what both parties really want. At the end of the process, parties might sign a legally binding contract to enforce the terms of the settlement.
Adjudication
Adjudication is a mandatory form of ADR most commonly used in the construction industry, but it can be applied outside of construction if it’s stipulated in a contract. It begins with one party serving a Notice of Adjudication to the other, which details the specifics of the dispute and what compensation or relief they want. Then an adjudicator is chosen either manually, by both parties, or by an Adjudicator Nominating Body.
Once the adjudicator is chosen, they send a referral notice outlining the case that requires a response within seven days. The adjudicator will then usually reach a decision within 28 days, which is legally binding unless it’s overruled by a second arbitration process or court decision.
This process focuses on making decisions quickly and cheaply. This is important in construction where there’s potential for projects to go over time and over budget at great cost to many stakeholders.
Collaborative law
In collaborative law, each party has an attorney but the shared goal is settling on a compromise out of court. Part of that is creating an environment of open communication and mutual respect, whatever the situation is.
For example, if a dispute arises over a delay in delivery, one party could bring data from their order management software to review all data around the delivery in question. Or if the dispute involves financial matters, accounts payable softwarecould be used to make sure all parties can see that compensation is being paid out as agreed.
How ADR can help
Disputes are inevitable for large businesses in Cameroon. However, expensive damaging court battles are not. ADR gives businesses a wide range of conflict resolution strategies to handle disputes out of court.
These difficult situations can be handled entirely out of court, but there are options to get courts and legally binding contracts involved where it makes sense. ADR can adapt to all kinds of situations, helping everyone involved reach a compromise that works for both of them.
Add comment