Six out of ten legal professionals (59%) say mediation is the most effective alternative dispute resolution (ADR) method, according to our latest survey.
ADR methods, including mediation, arbitration, and negotiation, offer parties ways to resolve disputes outside of traditional court proceedings, often resulting in faster, more cost-effective, and less adversarial outcomes.
The survey, of 200 professionals, was conducted at our recent Dispute Resolution Conference at the Royal Irish Academy of Music, Dublin. The event showcased the growing importance of ADR and the anticipated impact of class actions on corporate risk and consumer power. The conference aimed to equip businesses and in-house legal teams with actionable insights to navigate the evolving dispute resolution landscape in Ireland.
When asked about the biggest challenges in negotiating dispute resolution clauses in commercial contracts, nearly half of respondents (49%) pointed to agreeing on ADR mechanisms. While mediation is often preferred for collaboration, negotiation can allow for faster settlements and arbitration offers a more formal, binding resolution. Only 4% chose arbitration, despite its usefulness in more complex or high-stakes disputes.
The efficient resolution of disputes, through the courts or through alternative dispute resolution mechanisms, is a matter of public interest.
Gerard Kelly, Dispute Resolution Partner, commented: "The preference for mediation highlights its effectiveness in resolving disputes efficiently and amicably. However, finding the right approach is key. Companies need to take account of the type of dispute resolution mechanism that will best serve them, no matter what side of the dispute they are on. They should consider whether they want something that is cost effective or speedy, and whether it is important to maintain a business relationship while a dispute is being resolved.”
The Attorney General, Rossa Fanning SC, delivered a keynote address on Ireland’s advantages as a place to do business and resolve disputes effectively. He said that Ireland is “a jurisdiction that takes the resolution of disputes outside of court seriously, and rightly so.”
He commented: “The efficient resolution of disputes, through the courts or through alternative dispute resolution mechanisms, is a matter of public interest. This is not only to ensure that the people who live and work here can secure the benefits of the administration of justice, but also to ensure that Ireland continues to provide an environment that supports businesses, domestic and international, as they continue to build on our thriving economy.”
The survey also highlighted the barriers to the broader adoption of ADR in Ireland. Over half of the respondents (51%) cited a lack of awareness as the biggest obstacle to its broader adoption in Ireland, followed by cost concerns (39%).
Gerard Kelly added: "Businesses may not be aware of the benefits that ADR can bring. Our findings underscore the potential need for greater education and promotion of ADR methods. The legal profession can work to shift the perception that ADR is too expensive or too complicated. The fact is, these methods can often save time and money compared to traditional litigation."
Meanwhile, the findings suggested a cautious optimism regarding the introduction of a form of class actions for consumers in Ireland. While 47% of respondents viewed collective actions for consumers as “necessary and overdue”, 49% saw them as “beneficial but risky”.
There will need to be a workable funding mechanism to facilitate the bringing of collective actions to ensure the Act fulfils its purpose.
The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the Act) commenced in April this year and provides a mechanism for consumers to take collective legal action. However, there is ongoing uncertainty around the funding of these actions, with consumers paying €25 to participate.
Peter Johnston, Dispute Resolution Partner, said: "The split opinion on collective actions reflects the complex nature of this legal mechanism. While it promises improved access to justice and increased corporate accountability, there are also associated risks and challenges. One of the main challenges is the prohibition of litigation funding. There will need to be a workable funding mechanism to facilitate the bringing of collective actions to ensure the Act fulfils its purpose.”
Respondents identified greater consumer power (49%) as the most likely impact of introducing collective actions, followed by an increase in the volume of litigation (28%). More than a third (36%) said that more efficient court resources would be the biggest benefit.
Peter Johnston added: "The anticipated shift in consumer power through collective actions could significantly alter the corporate risk landscape in Ireland. Consumer facing companies, particularly those that operate in multiple member states, will need to reassess their approach to consumer engagement, dispute management, and compliance, especially as they navigate the potential rise in litigation.”
Read more about the event on The Irish Times. If you have a question about any of the topics covered here, don't hesitate to contact a member of our Dispute Resolution team.
