Alternative Dispute Resolution in the Railway Industry

Alternative Dispute Resolution (ADR), already a strong force in the USA and Australia, is gradually extending its influence through a range of commercial disputes in this country. Because of the large numbers of new contracts being introduced and the desire to avoid lengthy and public intra-industry arguments, the railway industry at the time of privatisation had a system of ADR invented for it, overseen for aspects other than access to the rail network and passenger commercial issues by the Railway Industry Dispute Resolution (RIDR) Council, elected as a representational body by industry parties.

ADR is the alternative to litigation, offering a far quicker, cheaper and confidential way of sorting out disputes between companies within the railway industry and, by agreement, with companies outside it.

ADR comprises mediation, where the parties to a dispute want to reach an agreement but need some help in doing so fairly, expert determination, where an independent expert accepted by both parties reaches a decision taking account both of his own knowledge and of arguments presented to him, and arbitration, a judicial process where the award is final and binding and can be registered as a judgement on application to the court and enforced in the same way.

These ADR processes are carried out under the RIDR Rules, which have been recognised by disinterested parties as being a good ‘state of the art’ set of ADR procedures. They also provide as the implied first recourse, unless the parties have agreed otherwise, a judicial hearing by the RIDR Committee, a small body of professional railway staff, elected by industry parties.

Some companies within the railway industry - chiefly licensed train operators and large infrastructure maintenance and renewal contractors - are required to be parties to the RIDR Rules. Other companies within the industry can voluntarily import the RIDR Rules into contracts to which they are party, or to potential or actual disputes in which they may become involved.

Such companies would fall into the class of ‘Other Industry Parties’. In return for an annual levy to support the administration of the Rules (currently £300 per year for ‘Other Industry Parties’), they would be entitled to -

· informal discussion and advice on ADR in general, and on any specific potential dispute;

· dispute resolution by the RIDR Committee;

· appointment of a mediator, independent expert or arbitrator to consider any dispute with which they become involved, together with the provision of premises and support services for hearings taking place in London;

· receipt of summarised information on the outcome of disputes determined under the RIDR Rules (unless the parties sought confidentiality) to build up case law and to help develop best practice for ADR within the industry.

These services are free; parties to a dispute would pay the fees of the mediator, independent expert or arbitrator in such proportions as settled for each case.

Looked at in the light of an insurance premium against the cost, delay, publicity and soured commercial relationships of a court case, the annual levy to become part of the RIDR ‘constituency’ seems to represent good value for money.

John Gott RIDR Disputes Secretary Central House 14 Upper Woburn Place London WC1H 0HY

Phone:    020 7554 0602 Fax:        020 7554 0603 E-Mail:   sec@ridr.co.uk Website: www.ridr.co.uk

April 2001