Different Options For Dispute Resolution

Question 1

In what circumstances is it reasonable to refuse ADR?

Answer 1

CoA set out a list of criteria in Halsey v Milton Keynes:
1. The nature of the dispute
2. The merits of the case
3. The extent to which other settlement methods have been attempted
4. Whether the costs of the ADR would be disproportionately high
5. Whether any delay in setting up and attending the ADR would have been prejudicial
6. Whether the ADR had a reasonable prospect of success.

Question 2

What would happen if a party has failed to respond to an invitation to ADR?

Answer 2

It is likely that the court will find this conduct unreasonable and impose a sanction or penalty against the refusing party.

Question 3

If it is determined that ADR has been refused unreasonably, what sanctions are available for the court to impose?

Answer 3

1. Depriving a party of being awarded their costs even if they are successful in the litigation.
2. 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 litigation.
3. Ordering a higher rate of interest to be paid on damages awarded by the court.
4. Depriving a party of interest on damages awarded by the court.

Question 4

What is an adverse costs order?

Answer 4

A court order that requires a party to proceedings to pay some or all of the other party’s costs associated with the legal action.

Question 5

Advantages of mediation

Answer 5

Flexible, cost-effective, confidential, preserves relationships, settlement terms can be more creative, increases the likelihood of a later negotiated settlement, even if unsuccessful, parties can return to court if a settlement is not reached.

Question 6

Disadvantages of mediation

Answer 6

Verbal agreements aren’t enforceable through the courts; all parties must agree to a proposed resolution; can increase costs of parties are unwilling to co-operate: parties are not required to disclose documentation; ability to withdraw; no ‘day in court.’

Question 7

Is arbitration legally binding?

Answer 7

Yes. Parties are not entitled to refer the matter to court if they are not satisfied with the outcome. Decision taken by the arbitrator is legally binding on the parties, in the same way that a court judgment would be.

Question 8

Advantages of arbitration

Answer 8

Expertise of the arbitrator; speed; flexible; confidential; preserves relationships; binding decision; *enforcement.

*Under s.66 Arbitration Act 1996, a party can apply to HC to enforce a final arbitral award in the same way as a party is free to return to the court to enforce a judgment.

Question 9

Disadvantages of arbitration

Answer 9

Limited powers; cost; limited scope to challenge a decision*; disclosure and remedies available.

*s.68(2) AA 1996 provides that a challenge to a decision will only be successful where the applicant can prove that there is a serious irregularity in the proceedings, the tribunal or the award which caused substantial injustice to the applicant. Application must be made within 28 days of award being made.

Question 10

What set of rules is the litigation process governed by?

Answer 10

The Civil Procedure Rules 1998

Question 11

How many rules are there in the CPR?

Answer 11

89.

Question 12

Advantages of litigation

Answer 12

Strict rules that govern the behaviour of the parties; disclosure; outcome may be easier to predict if there are similar previously decided cases; binding decision; appeal; enforcement.

Question 13

Disadvantages of litigation

Answer 13

Time-consuming; complex to conduction without legal representation; costly; adversarial.