Imagine this. You’re going for your routine dentist appointment and your dentist tells you that your wisdom tooth needs to be pulled. So he prepares the equipment for your tooth extraction but during the procedure, he pulls the wrong tooth! In pain, you decide to sue him for negligence. But you realise two things. One, going to court and hiring a lawyer can be expensive; and two, the process could be long and uncertain. This puts you off from wanting to sue him in the first place.
Well, good news. In Malaysia, you don’t always have to go to court in order to get compensation, and sometimes you don’t even need a lawyer. This is because…
You can appoint someone other than a judge to hear your case
There are a few options to settle out of court, which lawyers would call as Alternative Dispute Resolution or ADR for short. These options to settle include negotiations, conciliation, mediation, arbitration and adjudication.
These options were made available to help the overcrowding of cases in court. It’s like adding an express lane for 10 items or less at the supermarket. So cases that are less complicated and have a higher chance to be settled without a trial, can be settled. This would cause less congestion of cases in court. So while this makes your life easier by settling your case faster, it also makes the court’s life easier by reducing the backlog of cases.
But these alternatives would apply to only civil cases and not criminal. That’s because you can’t really negotiate a crime that someone has committed. Furthermore, these out of court settlement methods are flexible – you don’t have to follow rigid court procedures. Most of the time, parties can set the rules and procedures that they would want to follow during these proceedings.
We’ve also added a price rating to help gauge how expensive it is, using the ‘$’ sign.
Lowest: $ Highest: $$$
Good for: EVERYTHING
Negotiations are basically an informal discussion solely between the two parties to come to an agreement, without needing a judge or mediator, or basically any neutral third party to oversee it. So if you have lawyers, they can act as your agents and will negotiate a settlement with each other. This method is probably the most basic of all the alternative methods available.
Usually, when you do get a lawyer, the first thing they’ll try to do is to call the other party’s lawyer, and try to negotiate a settlement. Only when both parties don’t come to an agreement, then they will decide to proceed with the case in court.
Good for: Divorce, employment disputes
Conciliation, on the other hand, will involve a third party who will makes suggestions to the parties to solve their issue. Think of him as a parent listening to their children argue, and making suggestions on how to solve their argument. So in this analogy, if one sibling kept on stealing the other’s toy, the parent will then suggest that maybe the solution is to keep the toy away from the sibling.
This method is more common in employment cases and matrimonial disputes as both the Industrial Relations Act 1967 and the Law Reform (Marriage and Divorce) Act 1976 recognise conciliation as a method to solve disputes in these areas.
Good for: Construction
Price: $$ – $$$
Most of the time, adjudication is used in construction cases between the main contractor and their subcontractors, and involves the Construction Industry Payment and Adjudication Act 2012 (CIPAA). This works by having a third party make temporary decision for a contract dispute, and for cases that usually happen before the completion of the project or even while in the midst of terminating the contract. This process is usually super fast and the temporary decision that was given will be put in place until parties are finally able to resolve the issue through arbitration or litigation.
Good for: Family law & other civil cases
Price: $ – $$
In mediation, it usually involves a neutral third party to solve the dispute between the two parties. This third party is known as a mediator and does not decide the outcome for the parties, but rather guides the two parties towards a settlement. Parties would be able to opt for mediation even before wanting to file their case in court. This particular alternative would be governed by the Mediation Act 2012.
This looks similar to a conciliation where there is a third party involved, but it’s slightly different. In a conciliation, the third party would suggest solutions, and will sometimes be asked to give a settlement proposal. But in a mediation, the third party would not give suggestions—their goal is to find a common ground for both parties to agree on.
When it comes to choosing a mediator, parties are actually free to choose a mediator on their own. But if they can’t agree on who to pick, they can actually request the Malaysian Mediation Centre to appoint a mediator from their own panel for them. Most of the time in mediation, parties would be accompanied by their lawyers and the mediator would facilitate the discussions between both sides. Sometimes, the mediator would ask to speak to the parties alone without the interference of their lawyers.
Mediation can be used in a lot of areas including family and workplace matters. Sometimes, when a suit has already been filed, and parties have not yet tried mediation, the judge himself would recommend mediation to the parties first to try to resolve their issue, without having to go for a full trial. However, if they still can’t settle their issue, then they would agree to go for a full trial with a judge.
The perks of going for mediation is that it actually costs much less than going for a full trial and it’s even faster than litigation because court trials can be really lengthy—sometimes it even takes years.
The fact that it’s a fair proceeding is also a plus point, because whoever the mediator is, he or she must most definitely be a neutral party. The law even requires them to disclose if they can’t be fair to the case. Under Section 7(7) of the Mediation Act 2012, before accepting any appointment, a mediator is required to disclose any information that would likely be seen to cause any biasness on his side.
The closed setting and confidentiality is another advantage, as whatever admissions or confessions that are said during mediation can’t be used later on in court as evidence, should the mediation fail. Even communications that were said can’t be repeated in court later on. So security is pretty tight here.
Good for: Mainly construction but can apply to other areas too
While it can be used for a variety of areas, arbitration is used mostly in construction disputes, and are governed by the Arbitration Act 2005.. This is the closest to having a judge without going to court. In mediation, parties are in control of the proceedings with the mediator just assisting the parties and suggesting options to reach a settlement. But in arbitration, the parties would choose a third party—known as the arbitrator—and he would decide who’s right and who’s wrong.
Sometimes if it’s a contractual dispute, there’ll be an arbitration clause in the contract between the two parties. This clause would usually state that should any dispute arise, both parties will resort to arbitration instead of litigation. But of course, even if there’s no arbitration clause or any prior agreement, parties can still choose to go for arbitration when the dispute happened.
Once the arbitrator hears the argument of both sides, he would then make a decision. This arbitrator’s decision would then be known as an award and this award can be registered in the High Court and be enforced against the parties.
Parties are free to choose who their arbitrator would be. Fun fact: you don’t have to be legally trained to be an arbitrator. Just someone who has the expertise or qualifications in the area of dispute, if that’s what the parties want. So while the arbitrator would act somewhat like a judge when deciding on the case of the party, at times arbitrators won’t have any legal background.
One downside to arbitration is that it may sometimes be really, REALLY expensive. But sometimes that’s the price you would have to pay for the privacy. Remember that case how boom gates were made legal? Ever wondered how we came across that judgment? That’s because court judgments actually can be made available to the public.
But in arbitration, unless agreed by the parties, no one would be allowed to publish or disclose any information, communication or awards that were made in those arbitration proceedings. This highlights the privacy of arbitration proceedings compared to filing your case in court, as court proceedings are usually open to the public and anyone can sit in and witness the trial. This could be very important especially for larger companies that wish to safeguard their reputations from public law suits and risk their shares taking a plunge.
So before thinking of filing your claim in court right away, consider these other alternatives that are more private and even faster to solve your case. Cutting the stress of a lengthy legal battle would prove to be so much more worth it when you’re trying to avoid wrinkles.