St. Lucia Embraces Alternative Dispute Resolution

Warring companies in dispute over contracts; business partners ironing out the terms of a deal; suppliers pressing for their rights after an unsatisfactory transaction — all these scenarios would usually mean a time-consuming, expensive and arduous journey through the courts. But there’s another option when it comes to corporate conflict. Alternative Dispute Resolution (ADR), better known as arbitration or mediation, can help parties avoid a legal battle. Now, thanks to recent efforts by governments, institutions and industry groups, there is growing awareness of ADR’s scope and benefits in Saint Lucia and throughout the wider Caribbean.

What is ADR?

ADR covers both arbitration and mediation. Although the two are sometimes used interchangeably, they are different processes. In arbitration, one party brings a claim against another, both produce supporting evidence to bolster their case and, after a period of analysis and consideration, the arbitrator makes a decision that is legally binding on both participants. 

Mediation is a more informal process designed to find a mutually agreeable compromise. Decisions are not binding and generally reached by the participants themselves who are chaperoned by a mediator skilled in resolving conflict. These councillors are there as advocates and guides to allow the parties to air their grievances and reach an understanding.

ADR is used in both civil and commercial cases but has proved particularly popular in labour disputes, construction, the maritime industry, intellectual property and those cases where the participants need confidentiality, impartiality and independence.

It’s easy to see why many parties choose ADR. Dragging disputes out in the courtroom is a time-consuming business, especially in Saint Lucia where the justice system is hampered by lack of resources and facilities. In the corporate world, where time is money, a long court case is a daunting proposition. “There is a misconception that arbitration is more expensive than going to court because you don’t pay for a judge but you pay for an arbitrator,” explains Shan Greer, consultant for Saint Lucian law firm Floissac Fleming & Associates and chair of the Caribbean branch of the Chartered Institute of Arbitrators (CIArb). “People look at it as a dollar for dollar thing, and fail to consider the cost to a business when you have a dispute that is not resolved quickly. Courts take years and that can cause significant problems. A simple arbitration can take just six months.”

ADR can also lead to better outcomes. A situation where both parties come together to reach a compromise is often preferable to a judge handing down a verdict that may not satisfy either the claimant or the respondent. With ADR, both sides feel like they have contributed to the outcome and reached a new level of understanding. This, in turn, makes them more likely to uphold the result.

Reform and Modernisation

Government announced in May that it would make ADR more accessible under Saint Lucia’s legal framework. Although details were scarce at press time, many stakeholders are hoping this signals a move to upgrading the legislative framework. Currently, arbitration in Saint Lucia falls under legislation based on the English Arbitration Act of 1950. And Saint Lucia is not alone in relying on an outdated ADR regime; many countries in the Caribbean have failed to keep up with the changing times and standards, in particular the UNCITRAL Model Law on International Commercial Arbitration which has been adopted by the United Nations.

Updating the Caribbean’s arbitration agenda is a priority for the Improved Access to Justice in the Caribbean (IMPACT Justice) project, which launched in 2014. IMPACT Justice drafted a new model legislation intended to bring the region up to speed and on a footing with the international community. In 2018 the Model Arbitration Bill was sent to CARICOM and is currently being reviewed and fine-tuned by the community.

For Greer, it’s a step forward and one that she hopes will bring about a shift in focus. “There has been a failure in the region as a whole to appreciate the value of arbitration. Most people cannot identify with it so there is not that push towards it. There’s a lack of awareness but once people understand the process they are more likely to buy into it.

“It takes time but we are seeing that changing mindset. Each country that gets onboard makes it easier to reach out to other countries who have not reached that stage.”Jamaica, Barbados and the Bahamas have been making progress in arbitration, strengthening their regimes to attract overseas business. Foreign companies will often seek out neutral ground for their arbitration processes and this creates an opportunity for jurisdictions in the Caribbean who are aligned with international standards. Greer warns, however, that the market may quickly become too crowded and she would like to see a more regional approach, saying: “A lot of Caribbean islands are trying to tap into that market [but] one of the dangers is that if we create too many centres in the region, we are going to unwittingly unravel the process and it will be a race to the bottom. It’s not necessary to have an arbitration centre in every jurisdiction. There is scope for them to work together so there is fair distribution and unity across the region.”

Preparing for the future

The Caribbean branch of CIArb is optimistic about the future of ADR in the region, according to Greer who says the association has been working on ‘sensitizing’ the public to its benefits, training arbitrators and reaching out to get more non-lawyers involved. She says: “We are hoping to see more co-ordination and collaboration throughout the various Caribbean states. We are seeing it now with a lot of regional institutions like CARICOM participating. There is a lot of capacity building. Arbitration is coming and if [countries] are not prepared they will not be able to reap the benefits.”

In Saint Lucia, the Dispute Resolution Association (DRA) is focusing on domestic arbitration. With the majority of the island’s business community being small or medium-sized enterprises, the DRA has introduced fast-track arbitration rules specifically for small disputes (those up to EC$150,000). Greer, who is President of the DRA, explains: “We try to get smaller business onboard. They are very anxious about things they do not know about and things they think will cost them money. Every penny counts for them.”

There are currently around 50 trained arbitrators in Saint Lucia. Greer advises those wanting to avoid court and explore ADR not to be intimidated by the process but to reach out to established practitioners such as the DRA, or consult their lawyers to see if ADR is a good fit for their particular problem. “People always struggle with something new and trying to adapt to it [but] you are going to see value. It is not just about how much you pay to start [arbitration], it is about how much it will save your business overall.”