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disputes

The benefits of alternative dispute resolution (ADR)

Key Takeaway

Alternative Dispute Resolution (ADR) in New Zealand offers ways to resolve disagreements outside court, often being faster, cheaper, and more private. The Disputes Tribunal, established by the Disputes Tribunals Act 1988, is a key ADR option for smaller claims, providing an informal process for everyday disputes up to $30,000, with specific rules on jurisdiction and costs.

What is Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) refers to various processes used to resolve disputes without going to court. These methods typically involve an independent third party who helps the disputing parties reach an agreement or makes a decision on their behalf. Common forms of ADR include mediation, arbitration, and resolution through tribunals like the Disputes Tribunal.

Benefits of Alternative Dispute Resolution

ADR processes are generally considered to offer several benefits compared to traditional court proceedings:

  • Cost-Effective: ADR can often be less expensive than litigation due to shorter durations and reduced legal fees.
  • Timeliness: Disputes can often be resolved more quickly through ADR, avoiding lengthy court delays.
  • Privacy: Most ADR processes are confidential, keeping the details of the dispute out of public records.
  • Flexibility: Parties often have more control over the process and the outcome, allowing for creative and tailored solutions.
  • Relationship Preservation: For ongoing relationships, ADR can help maintain goodwill between parties by focusing on mutual agreement rather than adversarial confrontation.
  • Accessibility: Processes like the Disputes Tribunal are designed to be accessible to individuals without legal representation.

Overview of Dispute Resolution in New Zealand

New Zealand utilises various ADR mechanisms across different sectors. For civil disputes involving smaller claims, the Disputes Tribunal is a prominent and widely used option, established under the Disputes Tribunals Act 1988.

The Disputes Tribunal

The Disputes Tribunal is a judicial body that hears and determines disputes relating to a wide range of issues. It is designed to provide a quick, inexpensive, and informal way for people to resolve their differences without the need for lawyers or complex legal procedures.

Purpose and Jurisdiction

The purpose of the Disputes Tribunal is to provide an accessible forum for resolving minor civil disputes [Source: Disputes Tribunals Act 1988, s 4]. The Tribunal has jurisdiction to hear claims for money or an order to do or not do something, up to a certain monetary limit [Source: Disputes Tribunals Act 1988, s 10].

Generally, the maximum amount a Disputes Tribunal can order is:

  • $30,000 for claims if all parties agree to it [Source: Disputes Tribunals Act 1988, s 13(1)(a)].
  • $20,000 for claims where parties do not agree to an increased monetary limit [Source: Disputes Tribunals Act 1988, s 13(1)(b)].

Who Can Apply?

An application to a Disputes Tribunal can be made by any natural person, company, body corporate, or association [Source: Disputes Tribunals Act 1988, s 9]. Generally, the dispute must relate to a consumer transaction, damage to property, or a debt owed.

Types of Disputes Handled

The Disputes Tribunal commonly deals with cases such as:

  • Claims about faulty goods or services.
  • Disputes over damaged property.
  • Unpaid debts.
  • Disputes between tenants and landlords (though specific tenancy issues are often handled by the Tenancy Tribunal).
  • Contractual disagreements.

Excluded Disputes

Certain types of disputes are specifically excluded from the Tribunal's jurisdiction. These include, but are not limited to, claims concerning land title, wills, intellectual property, and employment disputes (which are typically handled by the Employment Relations Authority) [Source: Disputes Tribunals Act 1988, s 11].

The Process

The process for resolving a dispute in the Disputes Tribunal typically involves these steps:

  1. Application: A party files an application with the Tribunal, outlining the nature of the dispute and the desired outcome. An application fee is payable upon lodging a claim [Source: Disputes Tribunals Act 1988, s 33].
  2. Notification: The other party (or parties) to the dispute is notified of the claim.
  3. Hearing: A referee, who is an independent decision-maker, presides over the hearing. Hearings are informal, with parties presenting their case directly without lawyers, unless the Tribunal grants permission in special circumstances [Source: Disputes Tribunals Act 1988, s 38]. The referee aims to help parties reach an agreed settlement if possible.
  4. Decision: If an agreement cannot be reached, the referee makes a binding decision or order [Source: Disputes Tribunals Act 1988, s 18].

Costs

Applicants are required to pay a fee when lodging a claim with the Disputes Tribunal. The specific amount of the fee is prescribed by regulations made under the Disputes Tribunals Act 1988 [Source: Disputes Tribunals Act 1988, s 33]. Unlike court proceedings, the Tribunal generally does not award costs for legal representation.

Orders and Enforcement

The Tribunal can make various orders, including ordering a party to pay money, return goods, or complete work [Source: Disputes Tribunals Act 1988, s 19]. An order made by a Disputes Tribunal is legally binding [Source: Disputes Tribunals Act 1988, s 18(1)]. If an order is not complied with, it can be enforced through the District Court as if it were a judgment of that court [Source: Disputes Tribunals Act 1988, s 56].

Other Forms of ADR

Beyond the Disputes Tribunal, other common forms of ADR in New Zealand include:

  • Mediation: A process where a neutral third party (the mediator) assists disputing parties in communicating and negotiating to reach a mutually acceptable resolution. The mediator does not make a decision but facilitates discussion.
  • Arbitration: A process where parties present their dispute to one or more neutral third parties (arbitrators) who make a binding decision after hearing all sides. This decision is generally enforceable and replaces a court judgment.

When to Seek Independent Legal Advice

Navigating legal disputes can be complex. While ADR mechanisms like the Disputes Tribunal are designed for accessibility, parties involved in disputes may still benefit from seeking independent legal information or advice. This can help in understanding their rights and obligations, evaluating the strength of their case, or preparing for an ADR process. Assistance can be sought from a qualified legal professional, Citizens Advice Bureau, or Community Law Centres for free advice.

Key Resources