Different Options For Dispute Resolution

Question 1

What is mediation?

Answer 1

A form of ADR that involves the agreed instruction of an independent third party (mediator) to facilitate discussions between disputing parties with the aim of reaching an agreed settlement

Question 2

What is arbitration?

Answer 2

A form of ADR that involves the appointment of an arbitrator, or panel of arbitrators by the disputing parties. The decision made by the arbitrator 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 court

Question 3

Can a party refuse ADR?

Answer 3

The court places a duty on parties to consider ADR. If a party wishes to refuse ADR it must be justifiable and there is a list of criteria to determine whether refusal is justified

Question 4

What is the list of criteria to determine whether refusal of ADR is justifiable?

Answer 4

• the nature of the dispute
• the merits of the case
• the extent to which other settlement methods have been attempted
• whether the costs of ADR would be disproportionately high
• whether any delay in setting up and attending the ADR would have been prejudicial
• whether the ADR had a reasonable prospect of success

Question 5

Can a party simply ignore or fail to respond to an invitation to ADR?

Answer 5

Yes but the court will consider it unreasonable and likely impose a sanction or penalty against the refusing party

Question 6

What penalty or sanction could the court impose if a party was to unreasonably refuse to respond to ADR?

Answer 6

Even if the party was successful overall the court could impose an adverse costs order which includes:
- depriving a party of being awarded their costs even if successful
- order a party to pay some or all the losing side’s costs as well as their own even if successful
- 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

Question 7

Can any documents or representations made or relied upon during mediation be used in any subsequent court proceedings?

Answer 7

No, they are all made without prejudice and therefore confidential and cannot be used in the court proceedings if mediation is unsuccessful

Question 8

What are some of the advantages to mediation?

Answer 8

• flexible (no set process, can suit individual circumstances)
• cost-effective (cheaper than litigation)
• speedy
• confidential (private process, can protect trade secrets)
• parties can return to court if unsuccessful

Question 9

What are some of the disadvantages to mediation?

Answer 9

• not enforceable through court unless there is a written agreement
• all parties must agree to the proposed resolution
• can increase costs if parties are unwilling to cooperate
• parties are not required to disclose information
• parties can withdraw at any time
• parties do not get their ‘day in court’

Question 10

How is arbitration different to the court process?

Answer 10

It is quicker and does not need to comply with the formal requirements and timetables laid out in the CPR

Question 11

If parties are unhappy with the outcome of arbitration can they refer the matter to court?

Answer 11

No, the decision by the arbitrator is binding on the parties

Question 12

What are some of the advantages of arbitration?

Answer 12

• expertise of the arbitrator (can have professional expertise and can be more pragmatic that a judge)
• speed
• flexible (the procedure can be tailored to suit the dispute)
• confidential (unlike court)
• binding decision (contractual agreement to abide)
• enforcement (can apply to the High court to enforce - do not need permission)

Question 13

What are some of the disadvantages of arbitration?

Answer 13

• powers are more limited (requires a degree of good faith between parties)
• cost advantage is small
• limited scope to challenge the decision (only successful if proven there is a serious irregularity in the proceedings or a substantial injustice - very narrow)
• disclosure and remedies (less prescriptive so information could be withheld)

Question 14

What are some of the advantages to litigation?

Answer 14

• strict rules that govern the behaviour of parties
• disclosure
• binding decision
• appeal
• enforcement

Question 15

What are some of the disadvantages to litigation?

Answer 15

• time-consuming (huge backlog)
• complex to conduct with legal representation
• costly
• adversarial