Chapter 1: Methods of Dispute Resolution

• Litigation


  The process of taking legal action using the court system
• Litigation


  • Normally used when attempts to resolve a claim by other means have failed
  • Still the most common form of dispute resolution, although ADR is becoming more prevalent
  • Results in a legally binding judgment which can be enforced against the other party
  • Expensive and time consuming
  • Decisions are made by a judge
  • Strict rules of evidence apply
• Negotiation


  • Can happen at any time in a case, pre- or post-litigation
  • Attempts to resolve a claim prior to the issue of proceedings
  • If it is not possible to avoid litigation, negotiation can take place after proceedings have begun
• Without prejudice


  Conversations or correspondence that form part of the negotiation process cannot be relied on by the other party or referred to in court
• Round-table discussions


  • Formal negotiations where the parties and their representatives meet to try to agree a settlement
  • Usually held post-proceedings and following disclosure of all witness statements and evidence
• Alternative Dispute Resolution (ADR)


  A collective description of methods of resolving disputes other than through the normal trial process
• Key principles of ADR


  • It is a voluntary process
  • The parties must consent to ADR
• The Court of Appeal has directed that all members of the legal profession who conduct litigation should routinely consider with their clients whether their disputes are suitable for ADR
• The Civil Procedure Rules encourage parties to settle disputes at an early stage without proceeding to costly litigation
• Lawyers' duty to make sure clients understand ADR


  Lawyers need to make sure their clients understand the availability and purpose of ADR and provide advice in appropriate situations
• The court has a duty to manage claims and, in accordance with the overriding objective, must ensure that cases are resolved in a proportionate, expeditious, and fair manner
• The courts have made it clear that it is unacceptable and unreasonable for a party to fail to respond to a request for ADR
• If the receiving party considers ADR inappropriate, they must set out their reasons, failing which the court has discretion to penalise them in respect of the legal costs that they can recover, regardless of whether their claim is successful
• Arbitration


  • A more formal procedure than negotiation that leads to a final and binding decision capable of enforcement in the courts if not paid
  • A contractual process, once parties agree to arbitrate they must follow this process unless both parties agree to use another method of dispute resolution
• Procedure in Arbitration


  1. Parties appoint an arbitrator

  2. Arbitrator discusses the case individually with each party and produces a timetable for resolution

  3. Parties make written submissions and produce relevant documentation

  4. Arbitrator makes a final decision (final award)

  5. Arbitration award is legally binding and enforceable in the courts
• Mediation


  • An informal, confidential, and voluntary process in which a neutral third party assists disputing parties in reaching a resolution
  • The mediator does not adjudicate on the dispute but instead assists the parties in reaching a resolution themselves
• Key features of mediation


  • It is completely confidential and 'without prejudice'
  • The parties are in control and can walk away at any time
  • Strict rules of evidence do not apply
  • The mediator is entirely neutral, with no personal interest in the outcome
  • Mediation is non-binding until a final written agreement has been signed
• Mediation in Practice


  1. Parties appoint a neutral mediator

  2. Mediation can take place at any time, before or during litigation

  3. Parties attend an agreed venue on a specified date where the mediator will assist them to find common ground

  4. If the parties reach agreement, the mediator will draw up the settlement agreement which will become binding once signed
• Mediator's Role


  • The mediator is not a judge or arbitrator
  • The mediator does not rule on the merits of the claim nor suggest or impose settlement terms
  • The costs of the mediator are borne jointly by the parties
• Litigation and ADR are not mutually exclusive and even once proceedings have commenced parties should still be actively considering whether ADR would be appropriate
• If parties are concerned there is not enough time to comply with directions and undertake ADR, the court will often suspend the court timetable (formally known as granting a stay) to enable ADR to take place
• Early neutral evaluation


  A 'neutral' is appointed to hear each side's case and to render an opinion of the probable outcome at trial, with the view to encourage settlement of the claim
• Ombudsman schemes


  An ombudsman is a person appointed to investigate claims against public organisations or certain private services