Arbitration, mediation, litigation as a mechanism to resolve disputes

Question 1

Litigation should be?

Answer 1

a last resort

Question 2

Litigation requires that parties consider?

Answer 2

the use of ADR as arbitration and mediation.

Question 3

ADR is normally quicker and cheaper than?

Answer 3

litigation

Question 4

All members of the legal profession SHOULD now?
Unless?

Answer 4

routinely consider with their clients whether their disputes are suitable for ADR (Halsey v Milton Keynes NHS Trust)

• Inappropriate e.g., because an injunction required.
• Other party unlikely to co-operate.
• Other party NOT to be trusted to comply with an award.

Question 5

An offer to engage in ADR SHOULDN’T?

Answer 5

be unreasonably refused.

Question 6

Unreasonable refusal includes?

Answer 6

BEING silent where this is an invitation to participate in ADR.

Question 7

Factors to consider whether refusal to consider ADR is justified:

Answer 7

Nature of the dispute.
Merits of the case.
Extent to which other settlement methods have been attempted.
If cost of ADR would be disproportionately high.
Delay in arranging and attending ADR would be prejudicial.
ADR would have a reasonable prospect of success.

Question 8

The burden is on the other party to show that the refusal is?

Answer 8

unreasonable.

Question 9

Unreasonable refusal CAN result in an adverse costs order which could include:

Answer 9

Successful party in their claim, depriving them of being awarded their costs.
Order to pay some OR all of the costs of the other party.
Order a higher rate of interest rate to be paid on damages.
Depriving a party of interest on damages.

Question 10

Arbitration is triggered in one of two ways:

Answer 10

• Pursuant to an arbitration clause in a contract
  OR
• The parties agree to arbitration once a dispute has arisen.

Question 11

Arbitration:

Answer 11

• An arbitrator is appointed (single person OR panel).
• The arbitrator hears both sides of the dispute.
• Decision made by the arbitrator is binding on the parties with no recourse to seek a court judgment on the matter.
• Winning party CAN apply to the court for permission to enforce the arbitration award.
• Arbitration is MORE formal than mediation (BUT less formal than litigation).
• Quicker than going to court, confidentiality can be maintained AND business-relationships preserved.
• Arbitration MAY NOT be appropriate if the parties need an in-depth investigation, a ruling on a point of law OR an injunction is required.
• Arbitration is NOT necessarily a more cost-effective option than litigation.
• Disclosure is limited so information CAN be withheld.

Question 12

Mediation:

Answer 12

• Agreed appointment of a mediator (who is an independent third party) to facilitate discussion BETWEEN disputing parties with the aim of reaching an agreed settlement.
• Mediation CAN OR CAN’T be binding.
• Not binding, party CAN withdraw at any time, to allow parties to return to court.
• No set format, confidential process, no formal rules to disclose information/documentation/requirement to follow statutes OR case law.
• Less destructive of the parties’ relationship.
• Negotiated settlement CAN be more creative than strict legal remedy granted by the court.
• Mediation ISN’T appropriate IF the parties need a ruling on a point of law OR an injunction is required.

Question 13

Litigation:

Answer 13

• ADR NOT applicable or engaged, litigation WILL apply as a last resort.
• Litigation is the formal process by which disputes are resolved through the courts.
• Process involves a trial being held and a judgment being given.
• Litigation governed by the CPR 1998 which is dictates the procedure that MUST be followed by the courts.
• CPR divided into 89 parts.
• Each CPR supported by PDs which provide additional detail on how the rules operate.
• PDs are supplementary guidance chapters to the CPR.
• Parties MUST follow the CPR as failure to do so can result in sanction OR penalty.
• Civil claims are commenced either in the County Court OR HC.
• Litigation is subject to the rules of disclosure requiring parties to produce ALL available evidence that relates to the claim.
• Failure to adhere to the disclosure rules CAN result in the evidence being excluded.
• Judgments are binding on the parties though parties have the right to apply for leave OR permission to appeal a decision.
• Litigation is adversarial, AND generally more time consuming, complex, AND costly to conduct.

Question 14

There are five main stages of the litigation process:

Answer 14

*Pre-action conduct
*Commencement of the action and defending of the proceedings
*Case management by the court
*Trial
*Post-trial

Question 15

Pre-action conduct?

Answer 15

parties MUST follow any pre-action protocols AND a PD on Pre-Action Conduct before any litigation being commenced.

Question 16

Commencement of the action and defending of the proceedings?

Answer 16

claimant WILL commence proceedings by issuing AND serving a claim form AND particulars of claim.
Defendant will file a defence if they wish to defend the claim.

Question 17

Case management by the court?

Answer 17

directions are given by the court to the parties stating all the steps to be taken to prepare for trial according to a strict deadline as to when each step is to be taken.
e.g., dates for when witness statements AND expert reports MUST be exchanged.

Question 18

Trial?

Answer 18

judge will hear ALL evidence at trial, MAKE a decision as to liability, damages (quantum) and costs.

Question 19

Post-trial?

Answer 19

losing party CAN appeal the decision.
The winning party MAY NEED to enforce the judgment if damages/legal costs ARENT paid as required.