Alternative Dispute Resolution Flashcards
What is the effect of all ADR being ‘without prejudice’?
Parties cannot disclose any information used as part of the ADR process if a resolution is not reached and the matter is subsequently referred back to court for determination
What is mediation?
A form of ADR that involves the agree instruction of an independent third party (mediator) to facilitate discussions between disputing parties with the aim of reaching an agreed settlement
What is arbitration?
A form of ADR that involves the appointment of an arbitrator or panel of arbitrators by the disputing parties. The decision made made by the arbitrators at the conclusion of the procedure is binding on the parties and they are not entitled to subsequently seek a judgment on the matter from the court
Is there a duty on parties to consider ADR?
Yes
When will it be acceptable for a party to refuse an offer for ADR?
When they have justifiable reasons to refuse
What criteria will the court consider in deciding if refusal of ADR is justifiable?
- the nature of the dispute
- the merits of the case
- the extent to which other settlement methods have been attempted
- whether the costs of the ADR would be disproportionality high
- whether any delay in setting up and attending the ADR would have been prejudicial
- whether the ADR had a reasonable prospect of success
If a party receives an invitation to ADR, must they respond?
Yes - failing to respond to an invitation to ADR is unreasonable in and of itself
What can the court do if a party unreasonably refuses to comply with a court order requiring parties to attempt ADR or offer from other side to attempt ADR?
The court can order sanctions against the party refusing - adverse cost orders
What adverse cost orders could the court choose to impose as a result of failure to engage in ADR?
- depriving a party of being awarded their costs even if they are successful in the litigation
- ordering the party to pay some or all of the losing side’s costs as well as their own, even if the party is successful in the litigation
- ordering a higher rate of interest to be paid on damages awarded by the court
- depriving a party of interest on damages awarded by the court
What happens if the parties agree to mediate?
- They will nominate and agree on the appointment of an independent mediator
- parties will send written position statements to the mediator which set out a background to case, the points in dispute and any proposals they may have for settlement
- each party will generally occupy a separate room and the mediator will shuttle between them
- mediator will try to narrow the issues to those genuinely in dispute between the parties and work the parties towards a settlement
What is the advantage of mediation being flexible?
there is no set process - it can be set to the individual circumstances of the case
What is the advantage of mediation being cost-effective?
Mediation is cheaper than litigation generally
What is the advantage of mediation being speedy?
Mediation can be arranged reasonably quickly and can result in sifter resolution of the dispute compared with litigation
What is the advantage of mediation being confidential?
Private process so useful for commercial entities wanting to prevent repetitional damage from litigating or protecting trade secrets from competitors
What is the advantage of mediation preserving relationships?
Moe likely to preserve commercial and personal relationships than an adverbial trial followed by a win/lose out determination
What is the advantage of mediation of settlement terms can be more more creative?
Mediation is not bound like the court is by remedies that are claimed and are within its discretion meaning parties can be more creative in terms of the settlement
What is the advantage of mediation increasing the likelihood of a later negotiation settlement, even if unsuccessful?
Even if an agreement is not reached, it helps parties to understand each other’s position to the point that settlement could take place via negotiations between parties solicitors after mediation
What is the advantage of mediation in that the parties can return to court if a settlement is not reached?
If it is clear that the an agreed settlement will to be reached, parties can be safe in the knowledge that they can commence or continue with proceedings through court
What is the disadvantage of mediation of enforceability of verbal agreements?
Unless there is a written agreement between the parties, then it is not enforceable through the courts
What is the disadvantage of mediation of all parties must agree to a proposed resolution?
If one party, has already shown rigid unwillingness to negotiate, mediation could prove to be a futile exercise
What is the disadvantage of mediation being of increase in costs if parties are unwilling to cooperate?
If one or both parties are unwilling to even consider settlement, mediation will likely fail and just increased overall costs
What is the disadvantage of mediation of the parties not being required to disclose documentation?
Not formal disclosure rules so parties can deliberately withhold information that they think will damage their case. The risk being that parties settle without having the full facts
What is the disadvantage of mediation of the ability to withdraw?
Parties can withdraw from mediation at any time risking the exercise being expensive and causing unnecessary delay
What is the disadvantage of mediation of no day in court?
A party who is seeking vindication or validation of their conduct or looking for the conduct of the opposing party to be penalised will likely not achieve this through mediation
What does arbitration involve?
- arbitrator is appointed or a panel of three arbitrators, hearing both sides of dispute before coming to a decision that is binding on parties
What are the most common ways parties choose to arbitrate?
- business agreement containing a clause that requires parties to arbitrate in the event of a dispute
- by an agreement in writing between the parties to arbitrate once a dispute has arisen
How will the arbitrator be selected?
Typically because they have been specifically identified in the original contract between the parties or by subsequent written agreement
How is arbitration similar court process?
- Governed by statute
- arbitrator will decide relevant procedural and evidential matters
- disclosure of documents will often be required
- witness will be examined and cross-examined
How is arbitration quicker than the court process?
It is quicker as it does not need to comply with the formal requirements and timetables in the CPR
Are the parties entitled to refer the decision to court if they are not satisfied with the outcome?
No.
The decision of the arbitrator is legally binding on the parties in the same way that a court judgment would be
What is the advantage of arbitration due to the expertise of the arbitrator?
Often the appointed arbitrator will have significant professional expertise in the area that is subject of the dispute. Sometimes means they can be more pragmatic than a judge who may only have minimal experience by comparison
What is the speed advantage of arbitration?
Arbitration can be arranged more swiftly than parties could expect a full trial to take place and the parties can put a time limit on the length of the overall process
What is the confidential advantage of arbitration?
Proceedings and awards are confidential, unlike court/ Attractive to commercial actions here parties do not want to share trade secrets or have negative publicity
What is the advantage of arbitration in relation to flexibility?
Procedure laid down by the arbitrator can be tailored to suit the dispute. Solution reached by the arbitrator can often be more practical and pragmatic than any order which the parties could receive from the court
What is the advantage of arbitration in relation to preserving relationships?
As with mediation, arbitration is more likely to preserve commercial or personal relationships since it is entirely confidential or personal relationships since it is entirely confidential.
Neither party needs to lose face publicly and it is more likely a pragmatic solution will be reached and imposed by the arbitrator which takes account of the parties’ need or desire to maintain a working relationship.
What is the advantage of arbitration of there being a binding decisions?
The parties contractually agree that they will both abide by the arbitrator’s decision prior to the arbitration hearing. outcome is therefore certain whereas it is not with mediation
What is the advantage of arbitration of there being enforcement?
Under section 66 Arbitration Act 1996 a party can apply to the High Court to enforce a final arbitral award in the same way as a party is free to return to the court to enforce a judgment
What is the disadvantage of arbitration of the powers being limited?
Arbitrator has less power than the court to deal with obstructive or awkward parties.
Process requires a degree of good faith between the parties
What is the cost disadvantage of arbitration?
Arbitrator, legal representatives and experts will need to be paid much in the same way as litigation meaning it can be just as expensive as going to court
What is the disadvantage of arbitration in relation to limited scope to challenge a decision?
An arbitrator’s decision can only be challenged where the applicant can prove that there was serious irregularity in the proceedings, the tribunal or the award which caused substantial injustice to the applicant
What is the disadvantage of arbitration in relation to disclosure and remedies available?
Depending on the process, disclosure of key documents are not as prescriptive in arbitration, leaving open the possibility that information could be withheld.
Legal remedies of the arbitrator are also slightly more than limited than those of the court (eg cannot order an injunction)
What will the effect of one party withdrawing from litigation once proceedings have been issued and defended?
The withdrawing party will likely be ordered to pay the other side’s costs
What is the advantage of litigation in relation to strict rules that govern the behaviour of parties?
The CPR provides a rigid framework of rules that the court expects parties to comply with.
If one party does not conduct themselves within the confines of these rules, the court can impose sanctions.
These rules also contain guidance on pre-action conduct (ie how parties behave before a claim is issued) to ensure that litigation is only used where there is no other alternative
What is the advantage of litigation in relation to disclosure?
Parties are required to put heir cards on the table and produce all available evidence that relates to the claim (including that which adversely affects a party’s claim) at as early stage as possible.
Failure to disclose a key piece of evidence by the deadline for disclosure will result in that piece being excluded unless the court specifically gives permission for it to be used
What is the advantage of litigation in relation to it may be easier to predict the outcome of the dispute?
Due to precedent it may be possible to predict the outcome of the dispute if a case of similar facts has already been decided
What is the advantage of litigation of there being a binding decision?
Once the trial has concluded the judge or judges will make a binding decision, enshrined in an order, that is binding on the parties
What is the advantage of litigation of there being an appeal?
The parties have the right to apply for leave or permission to appeal a decision that has been taken
What is the enforcement advantage of litigation?
In the event that the losing party fails to comply with a court order, the successful party can apply to the court to enforce the terms of that order
What is the time disadvantage of litigation?
Litigation is time-consuming for a variety of different reasons.
Can be several months before a trial
What is the disadvantage of litigation in relation to complex to conduct without legal representation?
Despite there being helpful Practice Directions, the CPR were drafter for lawyers by lawyers are very difficult to follow for a layperson without the benefit of any legal advice or representation
What is the disadvantage of litigation in relation to costs?
Litigation is very expensive.
What is the adversarial disadvantage of litigation?
The way in which litigation is conducted is naturally adversarial which means there is little hope of preserving the relationship between the parties
