ADR

Question 1

What is negotiation

Answer 1

Communication between parties intended to reach a compromise or agreement to the satisfaction of both parties.

Question 2

What are the options for ADR?

Answer 2

• negotiation
• mediation
• arbitration

Question 3

What characterizes the mediation process in ADR?

Answer 3

Confidential process using an impartial third party – the mediator

In mediation, each party with legal representatives will be present in the same location but in different rooms. The mediator moves between the rooms delivering settlement offers and guiding reflection.

Question 4

What are the advantages of mediation over litigation?

Answer 4

• Cheaper than litigation
• Preserves Relationships
• More creative settlements
• Flexibility in process
• Confidentiality

Question 5

What are the limitations of mediation?

Answer 5

• Mediator has no authority – ability to withdraw
• Requires some level of co-operation to participate
• Only written agreements will be enforceable through the courts

BUT even if mediation is unsuccessful, the content remains confidential, and parties can return to court.

Question 6

What is the primary feature of arbitration in ADR?

Answer 6

Dispute resolved by an independent adjudicator whose decision is final and binding

Arbitration ousts the jurisdiction of the court and is more similar to the court process.

Question 7

How can arbitration arise?

Answer 7

• Arbitration clauses in contracts
• Parties choose to deal with a dispute by arbitration

Arbitration can be agreed upon in advance through contract clauses or decided upon when a dispute arises.

Question 8

What are some benefits of arbitration?

Answer 8

• Privacy
• Easier enforcement
• Ability to choose a specialist
• Flexibility in solutions
• Swift arrangement compared to a full trial
• Binding decision

Question 9

What are some limitations of Arbitration?

Answer 9

• Arbitrators powers are less extensive than the court’s
• Can be long and formal, therefore low cost opportunities
• Limited scope to challenge the validity of any decision reached - can apply to the high court if there is serious irregularity in the proceedings within 28 days

Question 10

What does the court expect from parties regarding ADR?

Answer 10

Explore ADR - very few cases are unsuitable for ADR and the lawyer must ensure the client is fully aware of the options.

Question 11

List some reasons why parties might choose ADR.

Answer 11

• Preserves or creates better relationships
• Less expensive
• Saves time
• Greater privacy/confidentiality
• Less disruption to clients
• Outcomes reflect risks
• Greater control of process
• Greater involvement of parties

Question 12

What should parties do when refusing ADR?

Answer 12

Parties should still reply to the offer of ADR, as objections raised during discussions are more likely to be accepted.

Question 13

What factors should be considered when refusing ADR?

Answer 13

Consider the nature of the dispute, merits of the case, whether other settlement methods have been attempted, whether ADR costs are disproportionately high, whether delay in ADR would be prejudicial, and whether ADR has a reasonable prospect of success.

Question 14

When should ADR be considered?

Answer 14

• A contract may specify when ADR should be considered.
• Some types of ADR can only be considered at certain times - e.g arbitration must come before court proceedings

Question 15

What is the advantage of engaging in ADR earlier?

Answer 15

Engaging in ADR earlier can save costs and improve the relationship between parties.

Question 16

What is the advantage of engaging in ADR later?

Answer 16

Engaging in ADR later allows parties to better understand each other’s case and the available evidence.

Question 17

What guidance does the CPR give on considering ADR?

Answer 17

• Pre-action protocols and PD - parties must consider ADR
• Precedent H requires elements relating to negotiation and advising on settlement
• DQ on the fast/multi track requires legal representatives to confirm they have explained the need to settle, settlement options and costs sanctions
• At CMC, court will ask what steps have been taken to comply with ADR

Question 18

What do Directions Questionnaires require from legal representatives?

Answer 18

They require legal representatives to confirm they have explained the need to try to settle, settlement options, and possible cost sanctions.

Question 19

How can the court encourage engagement in ADR?

Answer 19

The court can reward positive ADR behavior and punish poor behavior in costs.

Question 20

What does the court consider regarding a party’s refusal to engage in ADR?

Answer 20

The court will consider whether the refusal was reasonable and the burden of proof is on the unsuccessful party to show why the court should depart from the general rule and deprive the successful party of some of its costs on the grounds that it refused ADR

Question 21

What circumstances should be looked at when considering costs after a party refused ADR?

Answer 21

• Whether any delay in setting up ADR was prejudicia
• Whether ADR had a reasonable prospect of success.

Question 22

Will the court refuse to award costs to a successful party for not suggesting ADR?

Answer 22

The court will not refuse to award costs simply because ADR was not suggested, unless it breaches a pre-action protocol.

Question 23

What should a party do in response to a request to engage in ADR?

Answer 23

Respond promptly in writing, explain circumstances for engagement, and make the letter open/without prejudice save as to costs.

Question 24

What can the court order regarding ADR in proceedings?

Answer 24

The court can order a stay in proceedings, direct parties to engage in ADR, and require an explanation of their thinking.

Question 25

What may the court require from a party to create a record of the ADR situation?

Answer 25

The court may require a party to provide a witness statement.

Question 26

Who can discontinue a claim?

Answer 26

Only a claimant can discontinue a claim at any time.

Question 27

What are the two major consequences of discontinuing a claim?

Answer 27

1. Ends proceedings in relation to the claim/part of claim discontinued. 2. C is liable to pay D’s costs up to the point of discontinuance unless the court orders otherwise.

Question 28

When is court's permission needed to discontinue a claim?

Answer 28

In exceptional circumstances e.g when C has already received some sort of remedy such as an interim injunction or payment.

Question 29

What is the procedure for discontinuing a claim?

Answer 29

1. File notice of discontinuance at court. 2. Serve a copy on every party. 3. Discontinuance takes effect from the date of service. 4. Upon discontinuance, a costs order is deemed to have been made in D’s favour on standard basis.