Alternative Dispute Resolution Flashcards
How is alternative dispute resolution viewed in civil proceedings?
1) It is actively encouraged, as litigation is a last resort
2) ADR should be used first unless
- is obviously inappropriate, for example because an injunction is required;
- the other party is unlikely to co-operate in the process; or
- the other party cannot be trusted to comply with an award
3) Cost penalties can be imposed if a party doesn’t engage
4) Following Churchill v Merthyr Tydfil, the court can stay proceedings for the parties to engage in ADR, provided ADR is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost -
Court can mandate ADR now
Broadly, what are the alternative dispute methods available to parties in dispute?
Mediation
Arbitration
Litigation as last resort
What does mediation involve?
Independent third party helps parties reach a solution
Voluntary and confidential process, so court unaware of ADR until after issues of liability and awards of damages are made by a judge, if ADR fails
Parties don’t have to accept the proposed solution and can withdraw anytime
Agreement is not automatically binding, but if the parties do agree to the suggested terms, they may have entered a contract, for which they may be sued for the breach thereof
What are the advantages of mediation?
Significantly cheaper than arbitration and litigation, because the process is quicker
- Mediator is paid for their services and solicitors usually instructed though
- Where successful, results in less solicitor time and costs
Process is flexible and there are no legal requirements; parties can withdraw anytime
Allows for continuation of a business relationship through a non-confrontational ADR
What are the disadvantages of mediation?
No formal procedure for disclosure of documents, so one party might not know all relevant facts
Parties cannot get public vindication to preserve their reputation
Ability to withdraw can result in wasted time and cost + no resolution
What does arbitration involve?
Substitute for litigation, where, when initiated, normal court processes cannot be followed
Can arise through a contractual arbitration clause or the parties may agree to it once a dispute has arisen
Largely governed by Arbitration Act 1996, but this only applies if the agreement to arbitrate is in writing
Independent arbitrator’s decision is binding on both parties
Winning party can apply to the High Court for permission to enforce the arbitration award as if it were a court judgment
What are the advantages of arbitration?
Quicker and may be cheaper than litigation
Less formal procedures
Decision by impartial third party
Confidential process
Solutions may be more practical than those a court has the power to order
Binding decision – main difference from mediation
What are the disadvantages of arbitration?
Dispute may not receive the depth of investigation it would receive in the courts
Certain remedies like injunctions are unavailable
Very limited rights to appeal the decision
Unlikely to be a cheap alternative
What does litigation involve?
1) Not voluntary and neither party can withdraw without paying the opponent’s costs
2) Court will impose a solution which can be enforced by the party who obtains judgment
3) Civil litigation is governed by the Civil Procedure Rules 1998
- Practice Directions give further detail on some of the ‘Parts’ of the CPR (89 Parts total)
4) Most civil disputes are dealt with either by the County Court or the High Court
What are the five broad stages of litigation?
1) Pre-commencement of proceedings
- Consider the client’s commercial and legal objectives
- Gather evidence to confirm viability of claim and prospects of success
- Give serious consideration to ADR
- Pre-action protocols must be complied with, including establishing the issues in dispute, sharing available information and endeavouring to resolve the issues
- Potential claimant should send the proposed defendant a letter detailing the claim and D is expected to send a letter in response - Only then can litigation be started
2) Commencement of the claim
- Proceedings are commenced by a claim form, which is served on D with full details of the claim (particulars of claim)
- D can then file a defence
- Court allocates a track for the claim
3) Interim matters
- Directions given to parties listing the steps they must take to prepare for trial and a strict timetable is imposed as to when each step must be taken - This includes disclosure of documents
- Evidence such as witness statements and experts’ reports must then be exchanged and costs are scrutinised
4) Trial
- Judge hears evidence and makes a decision, resolving issues of liability and quantum (damages)
- They determine if one party should pay the other’s costs
5) Post-trial
- Unhappy parties can appeal the decision
- If the damages or costs aren’t paid as required, the party can apply to the court to enforce the judgment
