Impact of COVID-19 on Alternative Dispute Resolution Mechanisms

It has not been business as usual in access to justice. The judiciary leveraged technology to conduct court sessions. With the suspension of court sessions, alternative dispute resolution (ADR) became the preferred route by most parties to settle disputes.

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COVID-19 pandemic has impacted all the sectors of society. It has not been business as usual in access to justice as courts were forced to close and parties forced to look for alternative means to settle disputes. The judiciary leveraged technology to conduct court sessions. With the suspension of court sessions, alternative dispute resolution (ADR) became the preferred route by most parties to settle disputes. ADR provided parties with the opportunity to continue with proceedings as efficiently as possible without waiting for the judicial branch to resume operations.1 The main advantage of ADR is that private mediators are trained negotiators.2 This means that they have the required expertise and skill to handle disputes in question. ADR has never been a more attractive option for dispute resolution than now. The judiciary’s current operational restrictions do not affect institutions that manage arbitral proceedings because they are private. The implication of this is that despite the government decision to suspend judicial and administrative activities, arbitration proceedings continue unaffected. COVID-19 pandemic has elevated the importance of ADR mechanisms and given an opportunity for the improvement of ADR mechanisms worldwide.

The impact of the pandemic has been heavier on litigation than on arbitration proceedings. Some jurisdictions across the world have classified courts as essential services and must continue operations. Most courts have resulted in the use of technology as systems have moved online to videoconferencing and telephones. This has been at a significant cost both in the purchase of necessary technology and the equipping of stakeholders to technology use. For most jurisdictions, the courts have been closed, and even those who moved online have encountered some teething problems. However, in arbitration, the only impact has been to move proceedings online, which has been the norm before the pandemic, especially in cross-border arbitration.3 As a result, ADR has served as an essential tool for prompt dispute resolution and helped the courts to manage the disruption of case management caused by the pandemic. In Kenya, Arbitrators have been forced to adapt to remote hearings, remote case management conferences, remote deliberations and electronic documents.4 Before the pandemic, paper submissions were the norm that had to change to e-filing, which means electronic filing systems. Witnesses in Tribunals have had to adapt to remote examination as parties adjusted to remote hearings and limited access to counsel.

One of the most significant impacts of COVID-19 is that parties have been forced to adopt virtual or hybrid hearings, especially those who do not want to incur delays. The biggest surprise to many practitioners is the ease of conducting virtual hearings. The advantages presented by virtual hearings, especially when witnesses are not involved, means that they may become the norm post-pandemic.5 With the increased used of technology to conduct tribunal proceedings, there are challenges, especially in cross-border disputes. In physical hearings, cross-border disputes are challenging due to the management of various personalities and cultures involved.

The challenge is aggravated in the online platform and requires dedicated and experienced arbitrators. However, the challenge aside, disputes can and should be mediated, especially during the COVID-19 pandemic.
There are increased opportunities for mediation, especially as companies seek ways to cushion themselves from economic shocks. Highly skilled mediators will get the upper hand in managing disputes, especially as businesses are under increased pressure to resolve disputes quickly and avoid litigation battles. With the online component, designing a mediation session now involves coordinating the participation of mediators, parties and counsel across time zones and levels of technology competency and rethinking the manner by which joint and private sessions take place, with a view to ensuring that an online mediation would be as successful as if parties had all appeared in-person.

Mediators and arbitrators have to be good communicators and great conflict managers in online mediation. Online mediation may make parties less invested in the proceedings when dialling in from home. For the technologically challenged parties, a feeling of being neglected may suffice and may opt-out of the proceedings if they get a sense of exclusion. More than ever, arbitrators must learn the art of effective communication and rapport building online to gain a reputation. Arbitrators may have to find ways of compensating for the decreased physical presence and the lack of body language to keep parties engaged in proceedings. A better way to manage the challenges presented is to involve arbitration institutions to provide end-to-end support, which will help parties focus on the proceedings. The institutions could help in the timely sharing of documents and handle movement from room to room in online platforms. Mediators should make use of the times to equip themselves with mediation advocacy skills and technology management skills.
Arbitrators need to be aware of possible areas that will have increased traction for arbitral proceedings. Force Majeure is one such area. The increase of cases involving termination of contracts due to the inability to fulfilling its obligations is on the rise, with companies relying on legal concepts such as force majeure. As supply chains slow down, cases involving the supply of goods will come up. As business stop production and others, fold-up will most likely have a knock-on effect on claims for damages by contracting parties in the supply chain. Supply chain compliance will be a challenge to most businesses as they readjust to new business models. The absence of face-to-face meetings for the on-boarding process may lead to inherent contractual, litigation and compliance risks. The issue of compliance and litigation is an ongoing area of impact, especially how to manage employees and other third parties remotely. Insurance disputes will emerge as insureds and insurers debate over liability on COVID-19 related losses. Mergers and acquisitions will be affected, especially as closure and slowdown on the court procedures may force deals to be stalled or abandoned. This may result in litigation as parties seek to recover by way of litigation or arbitration. Arbitrators need to be conversant with emerging areas of disputes and also look out for opportunities that arise.

The impact of COVID-19 on access to justice is monumental but presents an excellent opportunity for ADR mechanisms to thrive. As courts slow down and some closed, parties have sought ADR mechanisms to resolve disputes. Practitioners in ADR have been forced to embrace technology in handling disputes which requires proficiency in matters arbitration. Skills such as communication have come in handy, and new challenges present themselves in online arbitral hearings. COVID-19 is an opportunity for practitioners to increase their skillset and widen their scope in conversant disputes. The use of ADR for dispute resolution will continue to be a preferred method depending on how efficient arbitrators and mediators handle themselves in the pandemic.

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