Alternative Dispute Resolution Notes PDF

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notes on alternative dispute resolution...

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ALTERNATIVE DISPUTE RESOLUTION

Def : Any process to resolve disputes without court trial which brings bad publicity, acrimony, high cost and high technicality or A device intended to solve disputes, out of court or by non-judicial devices that as an alternative to ordinary or traditional types of dispute settlement procedures.

ADR said to have four goals : 

To ease/ relieve court congestion/burden, as well as undue cost and delay

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To enhance community involvement in the dispute resolution process

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To facilitate access to justice

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To provide more “effective’ dispute resolution ( effectiveness such as cost, speed, satisfaction of public and private parties and compliance)

ADR also can be defined as a range of procedures that serves as alternatives to adjudicatory procedures of litigation and arbitration for the resolution disputes, generally but not necessarily involving assistance of a neutral third party that helps to solve such resolution. ADR can also be viewed as “appropriate” rather than “alternative” thus ADR become “ Appropriate Dispute Resolution”

Types of ADR Processes 1. Primary ADR Processes i) Negotiation ii) Mediation/ Conciliation iii) Arbitration 2. Secondary ADR Processes i) Private judging ii) Mini Trial 3. Hybrid ADR Processes

i) Expert determination ii) Med-arb iii) Ombudsman iv) Summary Jury Trial

Primary ADR Processes Things that have in commons in ADR Processes : 

Allow parties to maintain an ongoing business

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Make win-win result more likely

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They stand to save money

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Ensure quicker resolution

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Ensure confidentiality and lack of publicity

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Provide extreme flexibility

A. Negotiations ( Bargaining) 

Most important method and starting point to nearly every ADR process.

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A long process of discussion between parties to identify areas of agreement and disagreement among them

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Negotiations does not involve outsider, parties control the process and outcome

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Success in negotiations depends on personal and practical expertise of negotiator

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Objective to achieve a fair equitable solution

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No formalities in negotiations (1) Can negotiate via email, face to face , phone or etc

B. Mediation/ Conciliation

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A neutral third party is invited by partied to a dispute to join negotiations without conferring on him any power to impose a solution on them

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Neutral person can be called as facilitating intermediary A. Meets with the parties separately B. Jointly to assist them in reaching an agreement C. He can recommend but cannot make decisions D. May provide a non-binding evaluation of the merits of the dispute if the parties ask him to do so E. His suggestions or evaluations is not binding

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Solutions have to be found by parties themselves

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Lines of mediation

1. Preliminary meeting between disputants and mediator 2. Mediator sets the ground rules 3. Identifying issues underlying 4. Creates options and discusses them with the parties, individually as well as jointly 5. Try to recognise impediments to settlement 6. The ‘best’ and ‘worst’ alternatives to negotiated agreement.

C. Arbitration 

Def : Determination and settlement of a dispute, arising out of contract between parties by means of binding award given by arbitrator(s)

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Arbitrator(s) is chosen and paid privately by the disputants

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May also be appointed by an institution designated in the agreement for this purpose such as; KLRCA

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The law relating to arbitration in Malaysia is contained in Arbitration Act 1952.

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Parties are allowed to present their case through oral or written submission and to present witnesses and evidences.

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Awards given by arbitrators are binding and enforceable in court.

SECONDARY ADR PROCESSES A. Private Judging i) Also known as ‘rent a judge’ ; hiring a judge to hear and decide their case ii) This is only available only those in jurisdictions that adopted this method. Example Texas, NY, Ohio iii) The parties stipulate in a written contract to abide by the verdict given by the judge. iv) Once decision is made and filed at the court’s judgement and an appeal lies against it B. Mini Trial i) Not a trial but resembles a trial. ii) Often use by big companies and corporations to settle complex disputes. iii) Resembles arbitration that each side presents its case to a bench of “judges” iv) Characteristics of mini trial 

Findings of a mini trial are not binding on parties

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Mini trial is conducted in accordance with procedural rules agrred by both parties

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Hearings do not usually last for more than one to two days

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If negotiations fail, the parties may either go away or resort to mediation

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The whole proceeding is entirely confidential, both parties are obligated not to disclose any detail to an outsider.

HYBRID ADR PROCESS 1. Expert determination 

In cases of disputes involving knowledge of technical matters, like construction or manufacturing.

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Parties may appoint an expert to make a determination on their disputes

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Parties generally agree to treat the determination as binding

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Expert is not bound by any rules and is free to lay down his own ground rules

2. Med-arb 

Mediation-arbitration process which tries first to arrive a mutual agreement through mediation

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If fails, then proceeds to a binding arbitration.

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The parties have to commit themselves to this process in advance.

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A possible problem that may arise relates to neutrality of the person who first acted as mediator and then act as arbitrator

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But, this problem can be avoided by choosing one person as mediator and one person as arbitrator.

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Generally used in child custody and construction disputes

3. Ombudsman

FACTORS BEHIND THE EMERGENCE OF ADR AS ALTERNATIVE DISPUTE RESOLUTION 1. Delays and Costliness of Litigation 2. Limits of Legal Adjudication 3. Corruption in Judiciary 4. People’s Courts Movement 5. Shifting of control from Client to Lawyer 6. Development in United States 7. Emphasizing sociological dimensions of dispute resolution 8. From ‘right’ to ‘interest’; new way to resolution 9. ADR as the ‘best’ alternative

Tribunal for Consumer Claims Tribunal for Consumer Claims Malaysia 

An Independent Body Established Under Section 85, Part XII Of The Consumer Protection Act 1999.

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The Tribunal Operates Under The Ministry Of Domestic Trade, Co-Operatives And Consumerism.

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The Primary Objective Of Establishing The Tribunal Is To Provide An Alternative Forum For Consumers To File Claims In A Simple, Inexpensive And Speedy Manner. Who Is A Consumer? Generally A Consumer Means A Person Who Buys Goods And Services For His Personal Use Or For Domestic Or Household Purpose. Objective 

The Primary Function Of Hearing And Determining Claims Lodged By Consumers Under The Consumer Protection Act, 1999 Subject To The Provisions Of The Act.

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Before The Establishment Of The Tribunal, All Disputes Between A Consumer And A Supplier Or Manufacturer Had To Be Brought Before A Civil Court

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which Involves Complicated Procedures, High Costs And Is Time Consuming.

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These Are Some Of The Reasons Why Consumers Are Reluctant To Pursue Their Claims Against Irresponsible And Unscrupulous Suppliers Or Manufacturers Especially When The Amount Claimed Is Small.

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Even Though Presently There Is In Existence The Small Claims Court In Every State To Hear Claims Involving Amounts Of RM5,000.00 And Below, The Tribunal For Consumer Claims Is A Specialised Court To Determine Consumer Trader Disputes.

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Therefore, The Primary Objective Of The Tribunal Is To Provide An Alternative Channel, Apart From The Courts,

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For A Consumer To File A Claim For Any Loss Suffered In Respect Of Any Goods Or Services Purchased Or Acquired.

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All Claims Are Processed In A Simple, Inexpensive And Speedy Manner.

What Are The Functions/Objectives Of The TCC? The Tribunal For Consumer Claims Is An Independent Body Under The Consumer Protection Act 1999 (Act No. 599) (Hereafter Referred To As ‘The Act’) With The Primary Function Of Hearing And Determining Claims Filed By Consumers Under The Act . The Primary Objective Of The Tribunal Is To Provide An Alternative Forum For Consumers To File Claims In A Simple, Inexpensive And Speedy Manner. With The Existence Of The Tribunal, Consumers Can Now Seek Redress Against Unscrupulous/Unethical Traders And Suppliers Of Goods.

Is There Any Limitation Of Jurisdiction? The Tribunal Has Jurisdiction In Respect Of Any Claim Not More Than RM 25,000.00 Filed Within 3 Years Of The Dispute Except The Following Claims : Claims Arising From Personal Injury Or Death; Claims For The Recovery Of Land, Or Any Estate Or Interest In Land; Claims In Which The Title To Any Land, Or Any Estate Or Interest In Land, Or Any Franchise, Is In Question; In Which There Is A Dispute Concerning :The Entitlement Of Any Person Under A Will Or Settlement Or On Any Intestacy; Goodwill; Any Choose In Action; Any Trade Secret Or Other Intellectual Property;And Where Any Other Tribunal Has Been Established Under Any Other Written Law To Hear And Determine Claims That Are Under The Jurisdiction Of That Other Tribunal.

How Does A Consumer File A Claim In The Tribunal? A Claim Can Be Filed In The Tribunal By Filling Up The Claim Form Which Is Known As Form 1. This Form Is Available Free Of Charge From All Tribunal Branches And Can Even Be Downloaded From The E-Tribunal Portal. A Filing Fee Of RM 5.00 Is To Be Paid For The Filing Of Form 1.

What Happens After Filing Form 1? The Consumer Has To Serve Form 1 On The Trader And Both Parties Are Required To Attend A Hearing Of The Claim On The Date Fixed By The Tribunal.

What Should Traders Do Upon Receiving Form 1? The Traders Can Contact The Consumer To Discuss The Claim For The Purpose Of Explaining The Dispute Or To Settle It. If There Is No Settlement, Traders Should File Form 2 At The Tribunal Branches. Form 2 Should State The Defence Or Explanation To The Claim. A Copy Of Form 2 Should Be Served On The Claimant.

Can The Parties Settle The Claim Between Them Without Attending The Hearing? Both Parties Can Settle The Claim Between Them Or At Least Discuss The Possible Solution To The Claim. If Parties Have Successfully Settled The Claim, A Notice Of Discontinuance Can Be Filed At The Tribunal Office And Parties Need Not Attend The Hearing Of The Claim.

How Should The Parties Prepare For The Hearing Before The Tribunal? The Parties Should Gather All Relevant Documents Regarding The Claim And Get Ready Any Witnesses To Attend The Hearing. Any Party Can Also Bring Along A Family Member, Friend Etc. To Assist The Party At The Hearing. However, No Lawyers Are Allowed To Represent Either Party At The Hearing. What Happens During The Tribunal Hearing? The President Sitting In The Tribunal Will Assist Parties To Present Their Respective Case And Will Also, At All Times, Assist Parties To Reach An Agreed Settlement. Where Neccessary, The President Will Guide The Parties As To The Law Applicable In A Particular Claim. The Parties Are Also Encouraged To Present All Facts Of Their Case. What Happens After The Tribunal Hearing? If The Claim Is Settled With The Consent Of Both Parties, The Tribunal Will Issue An Agreed Award (Note: All Tribunal Orders Are Known As Awards). If The Claim Is Not Settled, The Tribunal Will Issue An Award Based On The Assessment Of The Facts And The Law Involved. The President Will Give His Reasons For The Award.

How Do Parties Comply With The Tribunal Awards? The Terms Of The Tribunal Awards And The Manner Of The Compliance With The Award Are Clearly Set Out In Every Award. Where Any Party Does Not Understand Any Term Of The Award, The Matter Can Be Referred Back To The Tribunal For Clarification. What Happens If Any One Party Does Not Comply With An Award Of The Tribunal? NonCompliance With A Tribunal Award Is A Criminal Offence Under The Consumer Protection Act, 1999. Any Complain Of Non-Compliance With An Award Should Be Made To The Enforcement Division, Ministry Of Domestic Trade, Co-Operatives And Consumerism.

TRIBUNAL CONSUMER CLAIM (CONSUMER PROTECTION ACT 1999) / Simplified version Who seat at proceeding? Chairman + Deputy Chairman or Any member selected by chairman = Section 96(1) CPA 1999 Procedure & Process under Tribunal Consumer Claim   

Sec 97 = File claim to tribunal to do proceedings & filled up claim form at FORM 1 Sec 98 = Claim does not exceed RM 10 K Sec 99(3) = Claims must not fall under limitation jurisdiction of tribunal (claims must within the jurisdiction of tribunal) ;

Tribunal Consumer Claim cannot hear claims for recovery of land, entitlement of any person under will, good will, any action take place in future, trade secret, injury or death or claim subject for court proceedings. 

Sec 107(1) = proceed with negotiation for settlement. Tribunal shall assess whether it is appropriate in all circumstances for tribunal to assist parties to negotiate an agreed settlement in relation to claim

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Sec 107(2) = in making assessment, tribunal shall regard to any factors likely to impair ability of parties to negotiate an agreed settlement

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Sec 107(3) = Trader can contact consumer to discuss claim for purpose of explaining dispute or to discuss how to settle it. If parties reach agreement of settlement, tribunal shall approve and record the settlement and shall take the settlement as an award of tribunal

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Sec 107(4) = If appears to tribunal it would not be appropriate for it to assist parties to negotiate agreed settlement, tribunal shall proceed to determine dispute

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Sec 108(2) = No lawyer is allowed

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Sec 116 = Every agreed settlement may be recorded by tribunal & every award made by tribunal shall be binding and final. Secretary to tribunal will send the copy of award made by tribunal to magistrate court and it will be recorded.

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Sec 117 = Failure to perform the award, result to criminal penalty.

TRIBUNAL HOMEBUYER CLAIM

Who makes up the Tribunal? The Tribunal consists of a Chairman and Deputy Chairman and not less than 5 other members, all of whom are members of the judicial and legal services. They are appointed by the Ministry of Housing and Local Government. Can any party use the Tribunal for housing related complaints? To approach the Tribunal, the homebuyer must be an individual purchaser and the claim must be within the Tribunal’s jurisdiction. It does not matter whether the buyer has bought the property from a developer or has purchased the property from a first buyer (who bought it from the developer). Does that mean that the Tribunal will never attend to a claim filed by the developer? Not necessarily so since a developer faced with a claim from a purchaser can file a counter-claim with the Tribunal. Should the purchaser later decide to abandon the claim, the developer can still go ahead with the counter claim. What are the types of claims handled by the Tribunal? For a claim to be heard by the Tribunal it must fulfil certain conditions. The Tribunal will consider a claim: a) based on a complaint arising from the Sale and Purchase Agreement (SPA) Such a claim can be technical or non-technical in nature. A technical claim will be one where it involves substandard work or non-adherence to the specifications as stated in the SPA. A non-technical claim is one that does not fall into the technical category, for example late delivery of vacant possession of the property. b) if the claim is made within the required time frame The claim must be brought to the Tribunal not less than 12 months from the date of issuance of the certificate of fitness for occupation (CFO) or the expiry date of the defects liability period as set out in the SPA. c) if the Sale and Purchase Agreement is for a housing unit meant for domestic purpose d) where the claim does not exceed RM50,000 Where the claim exceeds RM50,000 it will have to be filed with the Sessions Court, unless the buyer agrees not to claim the amount that exceeds RM50,000. Furthermore, the Tribunal may hear a claim that is worth more than RM50,000 if both parties agree in writing that the Tribunal should decide on it.

Will the Tribunal handle claims if the properties were bought before the new Act came into force? As long as the complaint fulfils the 3 conditions mentioned above, the Tribunal will hear it irrespective of when the SPA was signed. But the Tribunal will not handle any case where the SPA was signed prior to 1 December 2002 if the housing project is carried out by co-operative societies or statutory bodies. But what about abandoned projects, can’t we complain to the Tribunal? No, since the Tribunal only hears cases where buyers have been given vacant possession of their properties. What other types of claims are outside the jurisdiction of the Tribunal? The Tribunal does not have any jurisdiction over the following claims: 

for the recovery of land or any estate or interest in land

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the entitlement of any person under a will or settlement or intestacy

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goodwill any chose in action (ie an action which will only take place in the future)

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any trade secret or intellectual property right

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any personal injury or death

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The Tribunal will also not entertain a claim if it is a subject of court proceedings. If the court proceedings had commenced before the claim was lodged with Tribunal, unless the court case is withdrawn, the Tribunal will not hear it. Will lawyers be allowed to appear at the Tribunal? Normally no party shall be represented by a lawyer at the hearing. However, since an employee of a company may attend the tribunal, a former practising lawyer now employed by the company may do so. In exceptional cases where complex issues of law are involved, the Tribunal may allow a lawyer to be present. But if one party is represented by a lawyer, then the other party is also entitled to one as well. How much does it cost to use the services of the Tribunal? There is a fee of RM10 for filing a claim. What are the documents needed to be filed with the Tribunal?

You would need to fill up 4 copies of Borang 1 and also provide copies of the following documents: 

Sale and Purchase Agreement

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Letter of vacant possession

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Certificate of Fitness of Occupation (if any)

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Letter of Notice of Claim issued by the buyer to the developer (if available)

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Any other documents which support your claim Is the tribunal open to the public? Yes it is. What happens if one of the parties is absent at the hearing? If the Tribunal is satisfied that a notice of hearing has been served on the absent p...