Introduction to ADR Flashcards
Define Alternative Dispute Resolution?
A collective description of methods of resolving disputes otherwise than through the normal trial process.
What are examples of ADR?
Mediation, negotiation, early neutral evaluation, joint-settlement meetings, arbitration, expert determination
Is ADR compulsory?
No, parties may opt in or out of ADR as long as its not required contractually etc., but they must reasonably consider it.
What are the two categories of ADR?
Adjudicative and non-adjudicative ADR.
What is non-adjudicative ADR?
There’s no neutral decision makers involved, just the parties coming together. Neutral parties may host.
What is adjudicative ADR?
Neutral 3rd party makes a decision about 1 or more of the issues in the claim that parties must abide by.
How is reasonable consideration of ADR enforced?
There’s different levels of compulsion: merely consider, provide evidence you considered, require trying a method. Failure to do so may result in costs penalty.
What is important about results of non-adjudicative ADR?
Cannot compel a party to agree to a settlement in non-adjudicative ADR.
What ADR can a judge order early in the case?
early neutral evaluation when appropriate, but can only force a party to take the evaluation into account, nothing else.
What are some motivations for using ADR?
curbs costs, can be faster, useful where issues disputed require special expertise, parties have greater control of the process, more flexible, can include peripheral issues, can be more confidential than litigation.
When is non-adjudicative ADR most appropriate?
Wherever non-pecuniary objectives are sought, there’s a relationship to be preserved, where expert opinion is useful.
What are the varying costs of ADR methods?
Negotiation often cheaper than mediation, though both as well as evaluation or determination are cost effective in high value cases.
When would ADR be inappropriate?
It’s never inappropriate but it can be UNSUITABLE. Only a court judgement can provide legal precedent - good for contract. Where results can only be achieved through court orders.
What is NOT an unreasonable thing to refuse ADR for?
It’s not unreasonable to refuse ADR because you believe in the strength of your case as long as there’s something objectively justifiable.
Should litigation always be used where a relationship has broken down?
No, ADR should still be considered even if trust is broken.
When might non-adjudicative ADR be inappropriate?
Non-adjudicative ADR might be unsuitable where one party has substantially more resources, or where it entails fraud or libel.
What does non-adjudicative ADR result in?
Often results in contractual settlement. Enforcement is rarely an issue when terms are clear and agreed.
What is the best way of using ADR where enforcement might be an issue?
ADR is best used after proceedings so that the outcome can be recorded in a CONSENT ORDER that can be enforced.n
How does using ADR align with OI duties?
There’s a positive duty to assist the court in saving expenses, being expeditious and fair proportionate to the issues, importance and money of the case.
What are the main roles of the lawyer in ADR?
Bring awareness to ADR options, provide objective info on options and their cost/funding, remind client of pre-action obligations and penalties for breach, note reasons for refusal, assist selection of neutral parties.
What is authority to settle?
A lawyer negotiating in ADR on client’s behalf should only reach final agreement if authorised. Limits on authority shouldn’t be exceeded.
What happens if lawyer goes beyond the authority to settle?
If a claim is settled without consent, client will still be bound due to the actual or ostensible authority to act on behalf of a client.
How are lawyers and clients protected in authority to act during ADR?
Common practice to specify at the start of a negotiation where client is absent that any agreement will be expressly subject to client approval.
What ADR method is most encouraged by courts in line with OI?
Mediation, although the courts encourage parties to use any ADR.
When is there a duty to engage in ADR not just consider it?
Whenever it offers a reasonable prospect of producing a just settlement at a proportionate cost - costs penalty possible if not.
When does the duty for parties to consider ADR end?
It doesn’t end. Parties must consider ADR throughout the litigation process.
What did Halsey [2004] establish generally?
A court cannot compel parties to USE ADR as it would be an unacceptable constraint on right of access to court.
What is the strongest form of encouragement to consider ADR?
An order made by the commercial court
When can a court specifically direct parties to consider ADR?
At case management conference or pre-trial reviews.
What is an Ungley Order?
Forces a party who considers a dispute to be unsuitable for resolution by ADR to justify that view at the conclusion of trial, submitting a witness statement 28 days before.
What is the consequence of an Ungley order?
Parties will usually not be penalised for refusing to consider ADR until the costs stage.
When were Ungley orders coined?
In Halsey [2004]
What is included in Direction Questionnaires?
Parties must confirm they understand they must try and settle, options available for settlement, and potential costs sanctions if they refuse, statement verifying compliance with practice directions or stating why not.
What are the 2 forms used for Directions Questionnaires?
N181 (fast track and multi-track) N180 (small claims track).
What must be stated in a Direction Questionnaire?
Each party should state whether they’d like a 1 month stay or if not, explain why they do not wish to settle.
What can the court do in response to party’s refusal to settle?
Courts do not have to accept reasons for refusal to settle, if they consider them inadequate it can direct parties to attend case management hearing and direct an attempt at settlement via ADR.
What is the purpose of a stay?
A stay suspends or halts proceedings and so avoids need for a party to prepare for ADR simultaneous to litigation stages, saving time and expense.
What is the rule of conduct during a stay?
No steps in action by either side are required or permitted during a stay. When a stay lifts, the parties’ positions are the exact same as the moment of imposition.
How long does a stay usually last?
A stay lasts a month but courts may, and do, extend this where there are clear reasons to.
When can the court grant a stay?
Courts can grant a stay by their own motion or by party request at track-allocation stage.
What happens if a stay is granted before track allocation?
No allocation will be given until the resumption of the case.
What is a sensible alternative to a stay at multi-track level?
A sensible timetable for using ADR, as stays can lead to delay, extra cost and uncertainty.
What should parties do with their case if settlement is reached at ADR?
Parties should inform court that a settlement has been reached and must formally dispose of proceedings by consent or a Tomlin order.
What are the 2 ways parties can end their cases?
Where settlement is reached, the case can be ended by consent or a Tomlin order.
Who can receive a costs sanction for refusal to engage with ADR?
Losers but also winning parties can also be deprived of some or all of their costs if unreasonable refusal of ADR.
When should proceedings not be permitted to continue?
When most disputes between parties could be resolved outside of litigation, especially where public funds are involved, even in JR cases.
What did Halsey say about departure from its general rule on costs?
The general rule that costs sanctions follow the event shouldn’t be departed from unless it is unsuccessful party can prove that the winners acted unreasonably.
What do courts consider when asking whether a party was unreasonable.
Nature of dispute; merits of case; other settlement attempts; whether ADR costs disproportionate; whether delay of ADR would be prejudicial; reasonable prospect of success.
When does Halsey apply apart from normal civil cases?
Where C pursues proceedings rather than considering ADR through a compulsory scheme established by the FSA.
When will courts reject a claim?
If the claim is brought only to recover costs where full compensation but not costs could be obtained under an ADR scheme.
Why would the nature of a dispute make ADR unsuitable?
ADR is unsuitable where the dispute involves a major issue of law or construction; legal precedent is necessary; or there are allegations of fraud or commercially disreputable conduct.
What is considered a basic acceptable level of engagement with ADR?
Parties must usually at the very least engage with the offer of ADR.
Why is settlement at ADR different from litigation?
Settlement by ADR allows solutions potentially limitless in ingenuity and flexibility, do not NEED admissions of liability or payments of money.
Do courts consider unaccepted ADR settlements?
Yes, when evaluating whether a successful party was unreasonable in refusing to engage.
Who bears the burden for proving ADR would have a reasonable prospect of success if carried out?
The losing party must prove this, but this should just be “reasonable prospect” not anything onerous.
What are examples of reasons a court would not penalise refusal to engage with ADR?
obviously irreparable relationship; strong case; attitude or character preventing balanced views; where one case is unfounded and seeks nuisance payments.
Is there a difference in treatment of a successful party that doesn’t engage with ADR vs. instigate ADR?
Yes. Halsey guidelines don’t apply where a successful party did not initiate ADR. It would be unfair to disallow costs incurred simply because they didn’t initiate. Though if they exaggerated their claim to avoid instigating, other orders can be made.
How have the Halsey principles been extended?
As a general rule, silence in the face of an invite to use ADR is unreasonable regardless of whether there was good reason to refuse or not. (Unless other ADR is already ongoing).
What is the alternative to responding in silence to invites to use ADR?
Parties should discuss and share their reasonable objections to ADR in order to narrow their differences.
When is the court more sceptical of reasons for failure to engage in ADR?
When reasons are given retrospectively.
What are 4 things parties can do re: ADR to avoid sanctions?
- do not ignore offers to ADR; 2. respond promptly, in writing, with reasons why it’s a no; 3. ensure all evidence has been collated to prove the no; 4. correspondence should never be an outright refusal.
What can provide a timescale for ADR?
An advance commitment in a contract may provide for timing in ADR as long as clause is contractually binding and clear.
When are contractual clauses providing for ADR most successful?
Where they specify an adjudicative process, not where they only generally express intention to use ADR
What are some advantages of pre-selecting ADR timing and steps?
easy to begin constructively; provides more control and forecasting to parties; specific parties to conduct can be identified; easier to maintain confidentiality.
Where there’s no pre-agreement, what are some advantages of actively considering ADR early on?
Best for saving time and costs; Adjudicative is a direct alternative to litigation; non-adjudicative works best when started early; ADR can clarify issues and narrow case even if no settlement.
What are some potential drawbacks of using ADR too early?
time and money could be wasted if unsuccessful; could exacerbate issues between parties; could be used tactically.
How does small claims case management powers encourage ADR?
Small claims directions questionnaire includes guidance on trying to settle a case with info in SMALL CLAIMS MEDIATION SERVICE.
How do fast and multi track case management powers encourage ADR?
Directions questionnaires make it clear that the court will want to know what steps have been taken in relation to settling the case.
What can a judge consider when evaluating the appropriateness of ADR?
By looking at the statements of case, directions questionnaire, and asking for any other evidence.
How can interim orders be used to support use of ADR?
Court can give directions to support use of ADR; trial of preliminary issue to then settle the rest of the case, request witness statements rebuking appropriateness of ADR.
What is something parties may rely upon to evade ADR but not forever?
May be reasonable for a party to refuse ADR until after a key court decision has been made, but they can’t constantly rely upon the argument.
What sort of decision is the appropriateness of ADR at any time?
The decision is an objective one. There’s no presumption that litigation should continue unless ADR unsuitable.
How does the overriding objective support ADR?
OI supports the use of ADR ASAP.
By when in pre-trial procedure is it usually clear whether ADR is appropriate?
After the serving of statements of case. If not, steps can be taken to clarify issues unless there’s good reason to proceed to trial.
How does evidence generally function for ADR?
Must distinguish between reasonably reliable evidence and formal evidence. Formal evidence isn’t needed in non-adjudicative ADR.
When can it be justified to proceed with the case even where ADR is appropriate?
Proceeding with litigation may be justified where applications for interim orders may be of importance in the case.
