ADR Flashcards
Court case management powers
The court’s obligations to encourage settlement by encouraging the use of ADR is part of its case management powers under r.1.4. The court has the power to order the parties to consider ADR, but not to compel them to undertake it. This was a key part of the Halsey decision
court can impose costs sanctions at a later date for non-compliance but is DISCRETIONARY
the court also has discretion as to whether it orders a stay of proceedings - but will only do so if the parties ask, it will not be forced on the parties as ADR is not compellable
Although it may seem strange that the judges can play the role in early neutral evaluation (ENE), this power is included in the court’s case management powers at r.3.1(2)(m) and is a further detailed manifestation of r.1.2(e), encouraging and facilitating the parties to use an ADR procedure to settle the case
Paras 8 and 12 of the Practice Direction Pre-action Conduct
parties should see litigation as a last resort and consider ADR etc. A party should give clear details of the claim in writing and formally set it out in a latter before claim with what remedy they seek and ask the defendant to respond in detail. They may be able to narrow the issues (some invoices may not be disputed).
Non-compliance (or an intention) by one party, does not excuse the other from attempting to comply with the protocols
a letter before claim and response are not the equivalent of statements of case.
ADR and approaching limitation
the imminent expiry of a limitation period may be a reason to issue proceedings, para 17 of the Practice Direction requires the parties to seek a stay of proceedings so that they can attempt to comply post issue.
ADR and control
the amount of control the parties may exercise during an ADR process depends on the nature of process. Adjudicative processes (especially arbitration) usually involve procedural rules and result in a binding determination. The non-adjudicative options give the parties much more control over the outcome and what might happen next
Adjudicative methods of ADR
Arbitration
3rd party takes decision
decision made by independent 3rd party
parties have more control over process than in litigation
an alternative to litigation
key elements
The parties can agree that the arbitrator should conduct an oral hearing and the evaluator will decide the way evidence is provided and whether to use an adversarial method to conduct the hearing. The arbitrator will produce a written award with reasons which is binding on the parties
(1) arbitration clause in contract / parties agree once dispute arises
(2) parties agree arbitration service / arbitrator
(3) arbitration agreement: parties enter written agreement re:conduct of arbitration (often standard form)
(4) pre-hearing steps as agreed e.g. info to arbitrator
(5) the arbitration
(6) the decision: normally written
(7) sometimes, appeal to a court
Adjudicative methods of ADR
Adjudication
used in specialist commercial fields where parties prefer industry-tailored process
adjudicator has specialist knowledge
process laid down in advance in agreed industry terms / by body providing adjudication
usually adjudication clause in contract
key elements of arbitration adapted to industry needs
Advantages:
- adjust to needs of industry
- governed entirely by agreement between parties
- more flexible than arbitration / litigation
- cost-effective
Disadvantages:
- tailored process not available in all disputes where useful
- expensive if adjudicator has to do lots of groundwork
- if adjudication agreement does not say decision = final + binding, costs maybe wasted and litigation necessary
Non-adjudicative methods of ADR
Offers and Negotiation
FACILITATES SETTLEMENT not binding
Written offers:
usually in form of a letter; follows contractual principles
confusion can occur re: clarity of terms, especially if more than 1 exchange of letters
often leads to negotiation
e.g. part 36 offers
Negotiation:
informal; discuss some or all issues with view to resolving
can be carried out in writing, by telephone, face-to-face, at court door
no set procedure
key elements
(1) lawyer analyses case, ascertains client’s objectives (must act within)
(2) lawyers agree venue, attendees (possible for any combo ofparties, lawyers to negotiate), time
(3) parties discuss objectives, facts etc.
(4) persuasion, argument, tactics
(5) seek and offer concessions with view to settlement
(6) offers for settlement
(7) record settlement in writing; terms subject to client approval
Advantages:
flexible, cheap, client control: instructions, approval of settlements, private, confidential, without prejudice (no reference to what happens in negotiation, unless relevant to later costs order / terms of settlement)
Disadvantages:
success depends on preparation, skill of negotiator, tactics, strategy; client dissatisfaction with lack of involvement if lawyer-led; confusion due to informality, especially if written; overoptimistic inflexible instructions may preclude settlement; mediation may be more suitable); hard to agree if neither side willing to concede
Non-adjudicative methods of ADR
Mediation
CONFIDENTIAL
conduct of parties cannot be taken into account in the assessment of costs
neutral 3rd party facilitates settlement
no set procedure, but normally agreed in advance by written mediation agreement (enforceable contract between parties)
The evaluator will require each party to provide him/her with a written statement setting out their case and an agreed bundle. The evaluator will assist the parties to negotiate with one another acting as an intermediary
key elements:
(1) possibility of mediation raised by parties or (if litigation commenced) court
(2) parties agree on mediation process, individual mediator, mediation service
(3) mediation agreement: venue, format, fee (often standard form w/ major mediation service providers)
(4) lawyers may prep file; share with all parties / just mediator
(5) mediator may be briefed
(6) the mediation (conducted according to agreement)(a) joint meeting mediator + lawyers + clients to clarify objectives, strengths, weaknesses
i. opening statements
ii. Qs + discussion
(b) separate meeting: mediator + lawyers and / or clients
(c) possibly further joint meetings
(d) mediator confirms details of agreement; parties sign written memorandum of agreement
Non-adjudicative methods of ADR
early neutral evaluation
evaluator (independent 3rd party) assesses some / all issues in case. evaluator = suitable agreed expert respected by both parties / independent person with legal knowledge
appropriate if case turns on limited issues requiring expertise
Both parties will provide written submissions and evidence in support to the evaluator who will provide a written report based on his/her evaluation. The parties can choose how they use the evaluation to assist them settle their dispute
evaluator usually produces written report on specified issues, containing findings / provisional recommendations, as specified by parties, no set procedure
key elements:
(1) early neutral evaluation clause in contract / parties agree to early neutral evaluation once dispute arises
(2) parties agree: evaluator, issues, info to provide to evaluator, what evaluator to decide
(3) agreed info provided to evaluator, usually in writing, sometimes face-to face
(4) evaluator produces report
(5) parties decide how to proceed in light of report
Part 8 v Part 7 claim
A part 7 claim is the court procedure in which a claim form is filed and the issue is heard in court
A part 8 claim is an alternative to the usual part 7 and is only used when it is UNLIKELY TO BE A SUBSTANTIAL DISPUTE OF FACT or where the dispute will be complicated and lengthy
no requirement for particulars of claim or a defence, and a Part 8 claim is usually determined on the basis of written evidence, without any cross-examination of witnesses
without issuing a part 7 claim, the court has no jurisdiction over appointing someone for ADR
can be used:
To obtain the court’s approval of the pre-action settlement of a claim by or against a child or protected party
A claim for provisional damages that has been settled before the commencement of proceedings and the sole purpose of the claim is to obtain a consent judgment
to understand a clause referring to ADR methods
costs-only proceedings
MUST be used:
certain applications under the Bills of Sale Act 1878;
proceedings under the Trustee Act 1925; and
proceedings under the Financial Services and Markets Act 2000.
adjudicative methods of ADR
Expert determination
Usually, parties agree for the evaluator to be sent written submissions and copies of relevant documents. The evaluator may also be able to conduct his or her own lines of enquiry. The decision will be binding on the parties and is likely to be upheld by a court
Role of privilege and without prejudice
The without prejudice rule and exceptions apply to communications made during a mediation for the purposes of settling the dispute and the court is not likely to order the mediator to disclose her notes in any subsequent litigation
this protection exists for the benefit of the parties not the mediator
one of the key differences between the without prejudice protection and the duty of confidentiality is that confidentiality can only waived by everyone that is bound by the obligation including the mediator - if they don’t agree it doesn’t happen
the without prejudice rule does not extend to the mediation agreement itself, but does extend to the position statements and the type of investigations carried out by the experts as part of the mediation
if a settlement has been reached (without prejudice) and one party breaks the terms, the other party can refer the court to the without prejudice correspondence in order to
establish that settlement was reached and the terms of that settlement or to determine the proper interpretation and construction of those terms
= Essentially, the information is only privileged until one of the EXCEPTIONS apply, where it is in the interest of fairness, the rule can be waived
CMC
case management conference date is fixed by the court and written permission is needed to change the date
parties cannot agree to change the date themselves
expert - raising questions
a party can raise questions about an expert’s report and write them to the expert to have them answered within 28 days of service of the original report
