Different Options for Dispute Resolution Flashcards
Mediation, Arbitration, Litigation
Negotitation
Communication between the parties intended to reach a compromise or agreement to the satisfaction of both parties
Arbitration
Dispute resolved by an impartial adjudicator whose decision is final and binding. Ousts jurisdiction of the court (used instead of court proceedings).
Advantages:
- Privacy
- Easier enforcement in certain jurisdictions
- Ability to choose specialist to determine dispute (cannot choose the judge in litigation)
- Additional flexibility
Why advise a client to choose arbitration?
Arbitration is the best route if parties want to avoid the lengthy, costly, public and fractious nature of the courts
What are the disadvantages to arbitration?
- Long and formal process governed by rules and statute
- Costly and long. Arbitration is typically as costly as litigation
- Arbitration can be quicker than litigation, but this is not guaranteed
Is arbitration confidential?
Arbitration is generally held in private. Whilst confidentiality is implied, it is also common to sign confidentiality agreements
When does the decision to arbitrate arise?
a) When negotiating a contract, the parties may include an arbitration clause in their agreement to cover disputes that arise in the future
b) When a dispute has arisen, parties can choose to deal with it by way of arbitration
Mediation
Confidential process intended to facilitate resolution through an impartial third party. Mediator has no authority to make a binding decision. If it does not end in an agreed resolution, the content of the mediation will remain confidential and is not given to the court.
Advantages:
- Preserves commercial relationship
- Explore emotional dimension
- Parties can choose the mediator - more control
- Greater opportunity for the client to get involved and have their say
- Privacy and confidential
- Saves time and costs
Commercial advantages:
- Parties can come up with novel/commercial solutions beyond the terms a judge could order (e.g., discounts on sale of goods or purchase of a different product as a replacement)
- Resolution is more likely to be a commercial resolution, rather than a legally correct one
Is mediation time consuming?
Once mediation starts, it is often complete in a single day. Substantial time is often incurred preparing for mediation, but much less than litigation or arbitration would require
How is mediation useful if the parties eventually end up at trial?
Allows the parties to understand each other’s case and narrow the issues. This makes court proceedings less costly, if it ends up at court.
Mediation is without prejudice, which means it cannot be referred to at trial.
ADR Processes which result in a binding determination
- Expert determination
- Arbitration
ADR Processes which do NOT result in a binding determination
- Mediation
- Early neutral evaluation / expert appraisal / expert evaluation / conciliation
Why should parties explore ADR?
- Court expectation: the court experts the parties to act reasonably in considering and engaging in ADR (such as mediation / settlement)
- Preserves or creates better relationships between parties
- Less expensive
- Saves time
- Greater privacy / confidentiality
- Less disruption to clients
- Outcomes that reflect risks
- Greater control over the process (as parties can choose third party mediator / arbitrator)
- Greater involvement of the clients themselves
Alternative Dispute Resolution
- Ways of resolving a dispute other than a judge determining a dispute at trial
- Many forms encourage parties to reach an agreement on resolving the dispute
- Settlement can be pursued at any stage of proceedings
- Various forms of ADR can be explored at any stage as well (alongside or replace court proceedings)
Advising a client (legal writing question)
- Take each sentence / issue and address them in turn
- Cover every concern/objective/point that the client raises
- Apply each of the characteristics of arbitration/mediation to each of the client’s concerns and objectives
- Advise on next steps and outcome of using the method selected (where appropriate, compare to litigation / relationship with litigation)
- What will the proposed option mean for the client (so what?) and why it is the best option?
Judicial / CPR encouragement of ADR
- Pre-action rules
- Budget
- DQ
- Costs (sanctions for unreasonable refuse to engage in ADR)
- Stay of proceedings
Recording a settlement agreement
A settlement needs to be recorded in writing.
Where proceedings have not been issues - settlement agreement (i.e., contract)
Where proceedings have been issues:
- Consent order (plus settlement agreement)
- Tomlin order (plus settlement agreement). Includes a consent order on terms which are set out; used to record terms which cannot go in normal consent order as the court does not have the power to order them (e.g., commercial terms).
