1. Analysis, arbitration, mediation and litigation

Question 1

Why use ADR?

Answer 1

following are all potential advantages of ADR, but whether they apply in any particular case will depend on the facts of that case and the particular form of ADR being considered:

a. court expectations
b. better relationships
c. less expensive
d. saves time
e. privacy / confidentiality
f. less disruption
g. range of outcomes
h. outcomes reflect risk
i. parties in control
j. parties more involved

Question 2

Do parties have to explore ADR?

Answer 2

Yes. The court expects the parties to act reasonably in relation to considering and engaging in ADR, and can impose sanctions if they do not.
* consider Halsey factors

Question 3

What factors will the court take into account whether determining whether a party’s refusal to partake in ADR was reasonable?

Answer 3

1) nature of the dispute
2) merits of the case
3) extent to which other settlement methods have been attempted
4) whether the costs of ADR would be
disproportionately high.
5) whether any delay in setting up and attending ADR would have been prejudicial to the claimant.
6) whether ADR had a reasonable prospect of success.

Question 4

What is arbitration?

Answer 4

dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed will be final and binding.

Parties are agreeing to oust the jurisdiction of the court to hear the matter, and to give to the adjudicator instead.

Question 5

When will the decision to arbitrate arise?

Answer 5

Typically, the question of whether to arbitrate or not arises at two key stages:

1. When negotiating a contract the parties may decide to include an arbitration clause in their agreement; or
2. When a dispute has arisen, the parties can choose to deal with it by way of arbitration.

Question 6

What are some pros and cons of arbitration?

Answer 6

Cons: It can be a long and formal and expensive process which is governed by rules and statute.

Pros: privacy, easier enforcement in certain jurisdictions, the ability to choose a specialist to determine the dispute and additional flexibility.

Question 7

What factors affect when a party should engage in ADR?

Answer 7

1. contract may set out ADR timings and methods
2. some forms can only be considered at certain times
3. the earlier, generally the more costs saved and the relationship may be better preserved
4. the later, the more info on each others cases and evidence.
5. too early, and you may waste costs on a dispute which is not genuine

Question 8

When does the CPR require consideration of ADR?

Answer 8

1. in pre-action protocols
2. in guidance accompanying Precedent H (Costs budget)
3. in confirmation in Directions Questionnaires (must state expressly why not settled)
4. reported to court at case management conference

Question 9

What are sanctions for not participating in ADR?

Answer 9

Silence in the fact of an offer to engage in ADR is likely to be consdidered unreasonable and sanctioned in costs.

Refusing an offer for ADR is similarly likely to be considered unreasonable and sanctioned in costs, in form of adverse cost order.

The court will not automatically sanction in costs a party because it did not positively suggest ADR unless there is a breach of court order or protocol.

Question 10

What powers does the court have to encourage ADR?

Answer 10

1. can order a stay to explore ADR
2. can direct parties to consider ADR and require an explanation of parties’ thinking
3. can reinforce the direction above such as requiring a witness statement

Question 11

Advantages of Arbitration

Answer 11

• Binding decision
• Enforceable - apply to High Court to enforce final arbitral award.
• Confidentiality
• Flexible procedure - arbitrator lays down procedure, and can tailor it to relevant dispute.
• Speed - not constrained by court’s timetabling.
• Expertise of arbitrator - parties can reslected professional expert in the area dispute concerns (cf. litigation where judges are not always the most experienced in relevant area)