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Author: Angus Storar
Recently, a Ministry of Justice poll of Court users for 2014/2015, showed that 70% of all Claimants had attempted to resolve their dispute directly with their opponents and of those Claimants, 68% would have rather avoided making a Court claim and the expense of litigation..
So what are the alternatives to taking a dispute to trial?
Under the Civil Procedure Rules, parties are encouraged to consider and engage in Alternative Dispute Resolution (ADR). There are many forms of ADR which range from purely rights-based processes to processes which are interest-based.
Arbitration is a rights-based process which is similar to making a claim through the Courts but using an arbitrator instead of a Judge to determine the outcome of the dispute. It is often beneficial to the parties that the arbitrator is familiar with the particular area of dispute. Arbitrators can be selected by the parties, either by mutual agreement or by appointment from a suitable professional body closely linked to the subject of the dispute.
The parties and the arbitrator set the timetable for presenting the evidence to be considered. Progress is, therefore, at the parties convenience. The arbitration scheme used may provide for an arbitration on paper only or, alternatively, the arbitrator may wish to actually hear the evidence.
Any awards are enforceable through the Courts, including awards of costs, subject to the scheme used.
The disadvantages of arbitration are, in the main, cost as the arbitrator is appointed from private practice and will charge for his time leading to his decision. These costs can be significant.
In the construction industry disputes frequently arise between clients and contractors and adjudication is the most commonly used method of resolving such disputes. Generally, adjudication seeks to achieve a decision within about 35 days of the notice to adjudicate being served. In that time the claim and response, together with supporting evidence, must be delivered to the adjudicator in accordance with the scheme rules and the adjudicator will make a speedy decision, usually within a matter of days. Subject to the scheme rules, the adjudicator may be able to make an Order for their fees, but they are only able to make an award for the parties’ costs if the scheme rules so provide.
The adjudication award is enforceable through the Courts on application.
Alternatively, the subject matter of a dispute may be suitable for an expert to determine the outcome. Naturally parties must reach an agreement to be bound by the expert’s decision. That agreement should also cover how costs will be borne, including the parties’ costs, as well as the expert’s costs.
The expert’s award is enforceable, insofar as it forms a contract by which the parties have agreed to be bound.
Mediation is much more interests-based and is a negotiation between the parties with the assistance/encouragement of an independent, neutral, third party i.e. the mediator. The mediator’s role is to persuade the parties to reach agreement.
The mediator may adopt an evaluative approach or a facilitative approach. In the first case, the mediator will assess the strengths and weaknesses of the parties’ cases and from that position persuade the parties to reach an agreement. The facilitative method allows the mediator to persuade, cajole or encourage the parties to reach agreement that suits them, and that is not necessarily constrained by the powers of the Court.
Mediation is voluntary and confidential. It is a “safe” environment in which to discuss and explore the strengths and weaknesses of each others cases and normally agreement is reached.
Mediation can be arranged quickly and in comparison to a trial, is usually significantly less expensive. Agreements reached are binding and breaches are actionable, as with any settlement contract. Costs are generally thrown into the mix and can be the subject of specific terms within the settlement agreement.
Finally parties may, and often do, try to reach agreement between themselves, without prejudice. It is a most effective way of resolving disputes when agreement can be reached. However, such agreements should be drawn up professionally to ensure that the settlement is binding and enforceable. Negotiations between the disputants can result in speedy resolution but it should be borne in mind that the parties may not be in an equal bargaining position and, therefore, settlement may be weighted unfairly in favour of one of the parties. Should any of the parties resile from the agreement, it is likely to reach further litigation which may be more difficult to resolve as the parties’ positions harden.
Downs Solicitors LLP is committed to considering all forms of dispute resolution for their clients and would be happy to assist you in advising which form of ADR is appropriate for your particular situation and how to achieve the best results.
Please contact Angus Storar. Angus is a Consultant Solicitor in our Dispute Resolution team and is a trained mediator . He can be contacted by telephone on 01306 502291 or via email on firstname.lastname@example.org .