ADR Flashcards
Two contracting parties include within the agreed contract the following clause: ‘Any dispute arising out of or in connection with this contract shall be determined by the appointment of a single arbitrator to be agreed between the parties or failing agreement by an arbitrator appointed by the Chartered Institute of Arbitrators. The seat of the arbitration shall be England and Wales.’ A dispute arises relating to non-performance of the contract and a solicitor is advising his client as to the effect of the clause within the contract.
What is the effect of this clause within the contract?
A stay of proceedings is likely to be granted should proceedings be issued.
Arbitration is a form of adjudicative resolution and the adjudicator’s decision is final and binding and so court proceedings would not follow.
A solicitor is discussing with a commercial client, a building contractor, what term about dispute resolution should be included in the contract. The client says that the construction disputes in which he is often involved are quite frequent and he wishes to avoid litigation. The client is keen that any method of dispute resolution should provide for a quick resolution of any dispute, be flexible, non-binding and of minimal cost.
What advice should the solicitor give his client about the term to be included in the contract in these circumstances?
That any dispute be determined by way of adjudication.
A more robust method would be adjudication which retains the advantages of mediation but with further rigour and is more flexible than arbitration. Regardless of the client’s wishes, adjudication is the best option here given the nature of the disputes (construction disputes) and in any event is statutorily require.
Following an exchange of correspondence in accordance with the requirements of the Practice Direction – Pre-Action Conduct and Protocols, the parties agree to participate in an early neutral evaluation of the dispute in the hope that litigation will be avoided.
What is the legal status of the evaluator’s recommendation in these circumstances?
It is advisory and is not binding on the parties.
Early neutral evaluation is a non-binding advisory assessment and evaluation of the facts and merits of a dispute and is a private and confidential process.
At a mediation of a dispute, the parties reach agreement to settle. The terms of settlement are complex and the parties are concerned how best to record the settlement terms to ensure enforceability.
Which of the following is correct as to the extent of the mediator’s capacity to assist the parties in these circumstances?
The mediator may advise on how best to record the settlement terms if the parties request him to do so.
A solicitor is advising her client with regard to the most suitable ADR methods in relation to a dispute. The dispute involves a novel point of law in respect of which there is no precedent but the client seeks a binding decision and confidentiality.
Which method of ADR, if any, would be most suitable for resolution of this dispute?
The dispute is not suitable for any method of ADR.
ADR would not be suitable for resolution of a dispute involving a novel point of law because the common law evolves through judicial determination on a point.
You act for the claimant. The defendant’s solicitors have asked you to agree to a stay for the purposes of obtaining an Early Neutral Evaluation (ENE) of the claim. They have indicated that if agreement is not forthcoming, they will make an application for a stay of proceedings.
What is the correct advice to give your client in respect of whether the court has power to order a stay for the purposes of obtaining an Early Neutral Evaluation (ENE)?
The court has the power to order a stay for the purposes of obtaining an ENE even if one party does not consent.
While a stay is normally for a month, the court can grant a stay for a different period of time as appropriate given the particular facts and issues.
A large construction company is in a dispute with a subcontractor over delays and additional costs incurred during a major project. Both parties have a strong desire to maintain their business relationship and are looking for a resolution that allows them to have some control over the outcome. They are also concerned about the potential time and cost involved in resolving the dispute and want a binding resolution to the dispute.
Med-arb, because it allows the parties to first attempt mediation for a mutually agreeable solution and, if unsuccessful, proceed to arbitration for a binding decision.
