PRIVATIZED NATURE OF ALTERNATIVE DISPUTE RESOLUTION

Essentially all ADR options are based on the principles of contract law. The parties are free to
make an agreement to use an adjudicative option, such as arbitration or expert determination,
with terms covering the process to be followed, who will conduct the process, and that the award
made by that person will bind the parties. Alternatively a non-adjudicative option, such as
negotiation or mediation, can be used in which they agree a process, which may be facilitated in
some way, and then they may make a separate settlement agreement in which they set out terms
agreed to settle the dispute.

Party autonomy in terms of choice and control has many attractions, whether a party is a large
company seeking to deal with a commercial dispute or an individual seeking a practical
resolution. The choice can allow a party to get on with their life rather than having the ongoing
distraction and worry that litigation may cause. An ADR process can focus constructively on the
needs and preferences of the parties.

Case laws make it quite clear that contractual principles will be used to determine whether a
binding agreement has been reached, how terms are interpreted and so on. A settlement will be
enforceable as a contract whether or not it has been put into the form of a court order. To provide
just a few recent examples:

 A settlement agreement or consent order is effectively a contract between the parties, and
its terms should be construed as such, Al Nahyan v Elite Performance Cars Ltd1

 The court will looking at the underlying intention for what was agreed, even if the terms
are put into a consent order, Taylor v Bell2

In Hayward v Zurich Insurance Co Plc,3 in which a claimant sought £420,000 for injuries
suffered at work. Before trial a sum of £135,000 was agreed in full and final settlement, but a
few years later (following concerns raised by a neighbour) a judge held that the claimant had
deliberately and dishonestly exaggerated the effects of his injuries, such that the damages should
be only £14,720. In these circumstances the Supreme Court held the original settlement should
1
[2015] EWHC 950 (QB)
2
[2015] All E R (D) 208
3
[2016] UKSC 48

1
be set aside, but in Dunhill v Burgin4 the Supreme Court allowed a settlement to be set aside in a
case arising from a road traffic accident that was settled in 2003 for £ 12,500, as it later emerged
that the claimant had not had the capacity to conduct litigation at the time. Setting aside the
settlement opened the way for a new settlement to be agreed.

There is a strong argument that a contractual approach to dispute resolution could usefully be
more clearly acknowledged, and developed as part of designing dispute resolution processes for
the future. There could be many benefits in moving to a more integrated process with a
structured range of dispute resolution options, with criteria for deciding what was the most
appropriate option for a particular case, rather than continuing to allow litigation to be seen as
the norm with other processes being “alternative”, and by implication less valuable.

In making this proposal it is only right to recognize that the contractual nature of ADR also gives
rise to some issues, though these are matters that could be addressed through process or
oversight.

 There could usefully be more clarity for determining the steps to reach agreement, if for
example there is a string of correspondence, Bieber v Teathers Limited5.

 There might need to be some definition of the level of information and advice an
individual should get before entering, or reaching agreement in, a contractual dispute
resolution process.

 There would need to be sufficient assurance that an agreement was genuine if one party
were significantly stronger than the other.

 There might need to be some increased regulation or oversight of third parties making
decisions in or facilitating ADR processes to ensure adequate quality.

The different meanings of Privatization of Justice

Privacy is a core concept of ADR, and this potentially contrasts with the premise that justice
should be done, and be seen to be done, through a trial in open court. ADR processes are
generally conducted in private not simply because the parties may prefer that, but also because
4
[2014] UKSC 18
5
[2014] EWHC 4205 (Ch)

2
privacy is important if parties are to feel free to make provisional offers and concessions. The
concept of “without prejudice” essentially provides that any communication made with a view to
settling a dispute is private, and is protected from being referred to in court Ofulue v Bossert6.

However this level of privacy is seen by some commentators as a potentialproblem in relation to

the use of ADR:

 Without publicly reported case law developed by expert judges, the development of
precedent in the common law may be undermined7.

 There may be a risk to the rule of law if parties can agree resolutions to their disputes
without necessarily following legal principle, in private processes such that justice cannot
necessarily be seen to be done8.

These concerns are very real and must be addressed, but as the civil justice system develops,
concerns about the rule of law and the oversight of justice could be addressed at least partly by
systems of data collection, the making available of anonymised reports of cases and outcomes,
and an appropriate and proportionate system of oversight. The privacy of individual ADR
processes is not a threat to justice that cannot be managed – it has always been the case that most
claims get settled rather than going to trial.

There are other possibilities for ensuring the privacy of ADR processes is not a threat to justice.
The Professional Codes of Conduct and training requirements for lawyers could be developed to
provide more clearly for duties in ADR processes, as they currently focus primarily on duties to
the court.

To answer the basic questions as to what the state should provide, and how this may need to be
redefined. It may well be that if the state cannot realistically fund a full civil court and litigation
system, there is a need to consider what might be more proportionate and cost effective, while
still providing a reasonable level of justice, and access to justice. Third party funding is
becoming available for public law cases and lower value claims, and alternative business

6
[2009] 1AC 990
7
H. Genn and L.Mulcahy, “The collective interest in private dispute resolution”, Oxford Journal of Legal Studies
vol 33, no (2013) 59 - 80
8
“Why the privatisation of Civil Justice is a rule of law issue”, Professor Dame Hazel Genn, 36 th FA Mann Lecture,
Lincoln’s Inn, 2012.

3
structures can offer more cost-effective models. The concern is rather that these initiatives are
not being integrated into a coherent model for justice, and traditional judicial and professional
controls have limited authority over them.

Perhaps the biggest threat is that, if do not join in a more coherent process for developing a
future system for civil dispute resolution, market forces will design the future for us. The rather
mixed success of market forces in other industries must provide pause for thought in the service
industry of law. If ADR options are not brought coherently into our civil justice system, the
strong likelihood is that they will be increasingly offered by private providers. As ADR is a
matter of contract, any business can offer dispute resolution services, and ADR is not a reserved
activity that only lawyers can conduct9.There are potentially big markets for time limited, fixed
price mediation, expert determination and the like. If there were to be substantial privatisation of
this kind there would be little oversight.

This point needs to be placed in an international context. Civil justice has traditionally been the
domain of national legal jurisdictions, but increasingly civil disputes have an international
element, not just for large corporations, but because people make use of the internet. In the past
arbitration has been the main form of ADR used internationally, but increasingly all kinds of
ADR can have an international role. London has a strong international reputation for both
litigation and ADR, and is well-placed to develop this further. It is very important that this
opportunity be seized.

THE IMPLICATIONS OF K.S. PUTTUSWAMY V. UNION OF INDIA IN ADR

PROCESS
The Supreme Court of India by a 9-Judge bench has delivered a landmark judgment in “Justice K
S Puttaswamy (Retd.) and another v. Union of India and others” 10 on 24th August 2017, where it
was held that the right to privacy is protected as an intrinsic part of the right to life and personal
liberty under Article 21 and as part of the freedoms guaranteed by Part III of the Constitution of
India.

The judges were of unanimous view that Privacy, in its simplest sense, allows each human being
to be left alone in a core which is inviolable. This was accepting the view of Warren and
9
S12 Legal Services Act 2007
10
Writ Petition (Civil) No. 494 of 2012.

4
Brandeis. "The Right to Privacy"11, where it is stated that as legal rights were broadened, the
right to life had "come to mean the right to enjoy life – the right to be let alone".

The judgement has analysed the nature of fundamental rights and recognized that fundamental
rights and it was held that Privacy is a concomitant of the right of the individual to exercise
control over his or her personality. It finds an origin in the notion that there are certain rights
which are natural to or inherent in a human being.

The Arbitration and Conciliation Act, 1996 recognizes the autonomy of the individual in
deciding the way in which his dispute has to be resolved. It gives him the authority to decide all
the basic tenets of dispute resolution viz., who should resolve it (choosing mediator or
arbitrator), how it should be resolved (Law/rules applicable for the process), where it should be
resolved (Venue and Seat) and what should be resolved (matters referred for dispute resolution).
Since the matters which could be resovled through ADR are basically rights in personam, ADR
allows the party to choose a method which gives them complete confidentiality of the subject
matter and the process. Since opting an ADR proves is a deliberate decision taken by the parties
to the dispute, it postulates the reservation of a private space for the parties, declaring the right to
be let alone.

The Privacy judgment says that this autonomy of the individual is associated over matters which
can be kept private. These are concerns over which there is a legitimate expectation of privacy
and protection from unwanted intrusion.

The parties are opting the process of ADR because they want total confidentiality and privacy
about the facts or contents of the dispute. The SC says that Privacy protects the individual from
the searching glare of publicity in matters which are personal to his life. Privacy constitutes the
foundation of all liberty because it is in privacy that the individual can decide how liberty is best
experienced.

But is this right to privacy protected when the settlement agreement under section 73 of the ACA
or an arbitral award under section 31 of the ACA, which is the final outcome of a mediation or
arbitration process, is challenged before a court under section 34 of the ACA?

11
Harvard Law Review (1890), Vol.4, No. 5.

5
Here the relevant law is the ACA. If we examine the provisions, which allow the courts to look
into matters which have been referred to ADR, we know that section 5 makes it clear that no
judicial authority has the power to intervene in those matters except where so provided in Part-I
of the Act. This section clearly indicates the legislative intent to minimize supervisory role of the
courts to ensure that the intervention of the courts is minimal. The specific provisions under Part-
I, which provide those powers are sections 9, 34, 36 and 37. Out of this, sections 9 and 34 are
more important, since the court gets the option to look into the facts of dispute, either to give an
interim measure of protection under section 9 or when an award is challenged under section 34.
Under section 9, normally the parties only provide a prima facie case to impress the court to get
an order of interim protection. But under section 34, the court goes into the contents of the award
and pleadings and write judgments upholding the award or setting aside the award, narrating the
facts.

The Supreme Court while considering the test for Privacy held that Privacy is always connected,
whether directly or through its effect on the actions which are sought to be secured from
interference, to the act of associating with others. So admittedly when the parties has opted to
choose ADR expecting confidentiality to the process, discussing the same in the judgment and
bringing it to public domain is definitely affecting one’s right to privacy.As discussed earlier any
curtailment or deprivation of that right would have to take place under a procedure established
by law. Does the ACA provide such a procedure to curtail that right to privacy?

Section 34 gives only 7 grounds for scrutinising the award. Out of these, 4 grounds relate to
finding out whether a party was under some incapacity, whether the arbitration agreement is
valid under the law, whether the party was given proper notice of the appointment of an
arbitrator or of the arbitral proceedings and as to whether the composition of the arbitral tribunal
or the arbitral procedure was in accordance with the agreement of the parties. These 4 grounds
does not require the court to look into the facts or dispute which was resolved, but only the
agreement between the parties and the procedural documents relating to initiation and process of
arbitration. The other 3 grounds under 34 gives power to the court to see whether the arbitral
award deals with a dispute not contemplated by or not falling within the terms of the submission
to arbitration, or it contains decisions on matter beyond the scope of submission to arbitration,

6
whether the subject-matter of the dispute is capable of settlement by arbitration under the law
and whether the arbitral award is in conflict with the public policy of India.

Can it be argued that when the parties take up the matter before the court under Section 34, they
waive their right of privacy under the ADR process?

It may not be possible. The Supreme Court in privacy judgment, relying on “Behram Khurshed
Pesikaka v The State of Bombay” 12 has held that fundamental rights have not been put in the
Constitution merely for individual benefit, but have been put there as a m atter of public policy
and the doctrine of waiver can have no application to provisions of law which have been enacted
as a matter of constitutional policy. The court also relied on the judgment in “Girish Ramchandra
Deshpande v. Central Information Commissioner”13 where it was held that if the information is
personal and has no relationship with any public activity or interest or it will not subserve larger
public interest, the public authority or the officer concerned is not legally obliged to provide
those information. So it could be seen that the information of facts determined through mediation
or arbitration cannot be disclosed to public.

When the Supreme Court has categorically declared that “right to privacy of any individual” is
essentially a natural right, which inheres in every human being by birth and that such right
remains with the human being till he breathes last and it is one of those cherished rights, which
every civilized society governed by rule of law always recognizes in every human being and is
under obligation to recognize such rights in order to maintain and preserve the dignity of an
individual, it is a matter of concern as to whether the court under Section 34 can disclose those
confidential information, which are confidential and the parties have a legitimate expectation of
privacy. This assumes importance as the right to privacy is now recognised not only as a
valuable right, but as a right Fundamental in Constitutional jurisprudence.

In such circumstances the court while dealing with a matter under Sec. 34 or 9 must be careful
not to discuss the facts of the case in detail, but shall confine itself in deciding the legal aspects
mentioned under Section 34.

12
(1955) 1 SCR 613
13
(2013) 1 SCC 212

7
 CONCLUSION
This project report raises some fundamental questions about the interface between litigation and
ADR. Some see them as competing options in civil dispute resolution, with justicedepending on
judgments given in court and ADR threatening to undermine justice with private processes.
However it is argued in this lecture that there is an urgent need to move on from any adversarial
arguments about their relative merits, putting effort into designing a forward looking system for
the future of civil dispute resolution that makes best use of the advantages of litigation and ADR
in a single process that facilitates appropriate dispute resolution.

It is proposed that a design for the future can be assisted by going back to basic principles,
looking at the party autonomy and contractual principles that underlie ADR, as well as the key
concepts of civil justice. If practitioners, academics and government policy makers do not
manage to devise a more coherent and visionary system reasonably soon, there is a risk that
dispute resolution may increasingly be run by private organisations rather than as a public
service. It is possible that court hearings could increasingly be available only for those with
sufficient funds.

To summarise, devising an appropriate dispute resolution system for the 21st century might
include:

 Reviewing what “justice” realistically means for most parties to most disputes

 Considering the criteria for what types of dispute really need litigation, because of the
importance of adversarial examination, or the need for precedent development.

 Moving to a system in which dispute resolution options are presented and seen as equal
rather than lesser alternatives, with better guidance on criteria for which option may be
best in terms of expense, speed, expertise, party control or a problem solving approach.

 Respecting party autonomy to decide how to settle disputes wherever appropriate, with
consideration given to where that could lead to significant injustice.

 Giving thought to how relevant information about an ADR process can be made available
for oversight and other key purposes.

8
In laying the foundations for a system for the future, very substantial and valuable work is being
done by leading figures. The implementation of Sir Rupert Jackson’s Review of Civil Costs 14 in
taking major strides in making litigation more cost effective, and the proposals for online
resolution options for lower value disputes are being well argued by Professor Richard Susskind
and others15, with Lord Justice Briggs providing an immensely valuable review of the Civil Court
structure16.

The challenge is to build on this work coherently before it is too late. There are many concerns,
opportunities, and risks, but we need to look at the whole picture for civil justice before we wake
up to find much of it has been weakened or moved into private hands.

14
“Review of Civil Litigation Costs: Final Report”, Lord Justice Jackson, The Stationery Office, 2010
15
“Online Dispute Resolution for Low Value Civil Claims”, https://www.judiciary.gov.uk/reviews/online-dispute-
resolution/
16
“Civil Courts Structure Review: Final Report”, https://www.judiciary.gov.uk/civil-courts-structure-review/civil-
courts-structure-review-ccsr-final-report-published/

9
 BIBLIOGRAPHY

 STEPHEN B. GOLDBERG ET AL., Dispute Resolution: Negotiation, Mediation, And

Other Processes 3-6 (2d ed. 1992)
 Bryant G. Garthy, Tilting The Justice System: From ADR As Idealistic Movement To A
SegmentedMarket In Dispute Resolution, 18 Ga. St. U.L. Rev. 927, 935-937 (2002).
 Jean R. Sternlight, Is Alternative Dispute Resolution Consistent With The Rule Of Law?
LessonsFrom Abroad, 56 De Paul Law Review 569, 572- 577 (2006).
 R.C. Lahoti, Envisioning Justice in the 21 st Century, Nyaya Deep, (Oct., 2004)
 Kirk W. Schuler, ADR's Biggest Compromise, 54 Drake L. Rev. 751, 779 (2006).
S.Blake, S.Browne and S.Sime, A Practical Approach to Alternative Dispute Resolution
(4thedn) Oxford University Press, 2016.
 Owen M. Fiss, Against Settlement, 93 YALE L.J. 1073, 1075, 1085 (1984).
 Hiram E. Chodosh et al., Reform of the Indian Civil Justice System: Limitation and
Preservation of the Adversarial Process, 30 N.Y.U. J. Int'l L. & Pol. 1, 1-78 (1998).
 Marc Galanter, Why the "Haves" Come Out Ahead: Speculations on the Limits of Legal
Change, 9 L. &Soc'y Rev. 95 (1974)
 MARC GALANTER & JAYANTH K. KRISHNAN,Debased Informalism:
LokAdalatsand LegalRights in Modern India, in BEYOND COMMON KNOWLEDGE:
EMPIRICAL APPROACHES TOTHE RULE OF LAW 96, 126 (Erik G. Jensen &
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10