TB - Different options for DR Flashcards
1
Q
What are the different options for DR?
A
1) Mediation
2) Arbitration
3) Litigation
2
Q
Litigation should be the …
A
Last resort - the CPR make it clear that parties should only resort to litigation once alternative methods of DR have been explored
3
Q
Would the court impose a costs penalty on a party for ignoring an offer to mediate from their opponent?
A
Yes, it’s very likely that the court would impose a costs sanction in this case.
Case law has made clear that if a party refuses to engage in mediation following an offer from their opponent, they should communicate this clearly and give reasons for their refusal.
4
Q
After arbitration has concluded, a party who’s dissatisfied with the outcome:
a) Is bound by the determination
b) May refer the matter to court to decide instead
c) May use another form of ADR
A
A - because parties who agree to arbitration aren’t able to refer their matter to court if they’re dissatisfied with the outcome
5
Q
Litigation is the quickest and most cost-effective way of resolving a dispute. True or False?
A
False - litigation is the slowest and most expensive method of DR
6
Q
Which of the following isn’t a method of ADR?
1) Litigation
2) Mediation
3) Early Neutral Evaluation
A
Litigation isn’t a form of ADR
7
Q
What is ADR?
A
An umbrella term that covers methods of resolving a dispute between parties outside of the civil court process
8
Q
Do parties enter the ADR process voluntarily?
A
yes
9
Q
what is the procedural code which governs civil litigation in england and wales?
A
The Civil Procedure Rules 1998
10
Q
what does the CPR 1998 say about litigation being a last resort?
A
it should be a last resort and an offer to engage in a form of ADR by one party shouldn’t be unreasonably refused by the other party
11
Q
what is the court entitled to do in situations where the court considers that a party has unreasonably refused ADR, or the party has been silent in the face of an initiation to particiapte?
A
the court is entitled to impose sanctions or penalties on that party
(such sanctions are generally in the form of an unfavourable costs order against the refusing/silent party)
12
Q
What is meant by ‘all forms of ADR are confidential or ‘without prejudice’?
A
it means parties cant disclose any info used as part of the ADR process if a resolution isn’t reaches, and the matter is subsequently referred back to court for determination
13
Q
which forms of adr are you required to know for the sqe?
A
1) mediation
2) arbitration
14
Q
what is litigation?
A
formal process by which disputes are resolved through the courts.
At the conclusion of the process, a trial will be held, and a judge will make a determination on the claim which is binding on the parties
15
Q
what is mediation?
A
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
16
Q
what is arbitration?
A
a form of ADR that involves the appointment of an arbitrator, or panel of arbitrators, by the disputing parties.
The decision made by the arbitrators at the conclusion of the procedure is binding on the parties, and they aren’t entitled to subsequently seek a judgement on the matter from the court.
17
Q
does the court place a duty on parties to consider ADR?
A
yes
18
Q
what must a party’s reason to refuse ADR be justifiable?
A
must be justifiable under scrutiny from the court
19
Q
Has the court of appeal set out a list of criteria to determine whether refusal to consider ADR is justified?
A
yes - Halsey v Milton Keynes General NHS Trust 2004
it’s important to have this criteria in mind when answering qs on this topic
20
Q
what is the criteria to determine whether refusal to consider ADR is justified?
A
a) the nature of the dispute
b) the merits of the case
c) the extent to which other settlement methods have been attempted
d) whether the costs of the ADR would be disproportionately high
e) whether any delay in setting up and attending the ADR would have been prejudicial
f) whether the ADR had a reasonable prospect of success
21
Q
What has the court of appeal held since Halsey, in relation to failing to responding to an invitation?
A
failing to respond to an invitation to ADR is unreasonable in and of itself - even if a party refuses, they must at least engage with the proposal
22
Q
if theres a q on a party not who hasn’t responded to an invitation, what is the court likely to do?
A
the court will find this conduct unreasonable and impose a sanction or penalty against the refusing party
23
Q
REVISION TIP: when faced with a scenario where ADR has been refused by a party, consider what you could use from the facts of the case to justify refusal of ADR in front of a judge.
A
1) would you be able to argue convincingly that one or more of the Halsey considerations applied?
2) if yes, then there may not be sanctions applied
3) if not, then it’s likely that the court would impose sanctions
24
Q
if it’s determined that ADR has been refused unreasonably, what sanctions are available for the court to impose?
A
the court can issue penalties to parties who unreasonably refuse to comply with a court order requiring the parties to attempt ADR or accept an offer made by the other side to attempt to reach settlement using ADR
25
What are adverse costs orders?
a court order that requires a party to proceedings to pay some or all of the other partys costs associated with the legal action
the penalties, or sanctions, available to the court to impose
(exam is likely to ask to identify the most likely penalty in a given set of circumstances)
26
what do adverse costs orders include?
- depriving a party of being awarded their costs even if they're successful in the litigation
- ordering the party to pay for some or all of the losing side's costs as well as their own, even if the party is successful in the litigation
- 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
27
PRACTICE EXAMPLE: Annie has issued proceedings against Josh for breach of contract. During the course of litigation proceedings, the court orders on two occasions that the matter be stayed (paused) for a 28-day period for the parties to explore ADR. During the 28-day stay period, Annie writes to Josh on seven occasions to ask that he engage in mediation. Josh writes back refusing, on the basis that there’s no realistic possibility of it succeeding; however, he offers no reasons as to why. The matter proceeds to court and Josh is successful in defending all of the claim. He requests the court to order that Annie pays all of his legal costs associated with the action. However, when questioned by the judge about his refusal to mediate, he simply says, ‘I didn’t see why I should’.
Q: what order is the court likely to make?
the court is likely to order that Josh pays Annie’s legal costs of the actions as well as being responsible for his own, despite him being successful in defending the claim. Where the court has specifically directed that the matter be stayed to allow the parties to attempt mediation and there’s clear evidence that a party has refused with no grounds, the court has discretion to impose a costs sanction on that party
28
EXAM WARNING
rapidly developing case law has shown that objections raised to ADR at the time the discussions are taking place are much more likely to be accepted as arguments for justifiably refusing it. Parties who raise objections having simply refused or ignored an invitation at the time are much more likely to be found to have acted unreasonably, and therefore have sanctions imposed upon them.
29
what does mediation involve?
settlement by agreement between the parties, with discussions and negotiations facilitated by a mediator
30
Once parties to a dispute have consented to mediate in principle, they will nominate and agree on the appointment of an independent mediator. What happens after this?
both parties will send written position statements to the mediator which set out a background to the case, the points in dispute and any proposals they may have for settlement.
31
what does the mediator do with this document?
uses it to prepare for the face to face meeting
32
Once a date and place for the mediation to take place is agreed between parties and the mediator, what happens next?
on the day, each party will generally occupy a separate room and the mediator will shuttle between both
33
What is the mediators job during this?
to isolate the areas of genuine legal and practical disagreement between the parties and to direct the parties towards a personalised settlement that is to both of their satisfactions
34
any docs or representations made or relied on by any parties to mediation are 'without prejudice'. what does this mean?
it means they're confidential and aren't to be used in the context of any subsequent court proceedings, should the mediation be unsuccessful
35
what are the advantages of mediation
- flexible
- cost effective
- speedy
- confidential
- preserves relationships
- settlement terms can be more creative
- increases likelihood of a later negotiated settlement, even if unsuccessful
- parties can return to court if a settlement isn't reached
36
mediation is flexible because..
there's no set process, it can be set to suit the individual circumstances if the case
(including keeping parties entirely separate if the relationship has disintegrated to that extent)
mediation also allows issues to be unbundled - broken down into smaller issues that can be resolved more easily
37
mediation is cost effective...
as it is often much cheaper than litigation
38
mediation is speedy..
because then can be arranged reasonably quickly and can result in swifter resolution of the dispute compared with litigation
39
mediation is confidential...
because it's a private process, and therefore useful to commercial entities who may find their reputation damaged at trial or wish to protect trade secrets or confidential info from competitors
40
mediation preserves relationships...
as a mediated settlement requires agreement from both parties, it's more likely to preserve commercial or personal relationships than an adversarial trial followed by a win/lose court determination
41
mediation settlement terms can be more creative...
the court is only able to award a remedy that has been claimed and is legally within their discretion
- mediation allows parties to be creative in the terms of settlement (eg apologising or agreeing to continue trading with each other on renewed terms)
42
mediation increases the likelihood of a later negotiated settlement, even if unsuccessful...
even if an agreement isn't reached, it helps parties ti understand each others positions to the point that settlement could take place via negotiations between party solicitors after the mediation
43
in mediation, parties can return to court if settlement isn't reached...
if it's clear that an agreed settlement won't be reached, parties can be safe in the knowledge that they can still commence or continue with proceedings through the court
44
what are the disadvantages of mediation?
- enforceability of verbal agreements
- all parties must agree to a proposed resolution
- can increase costs if parties are unwilling to cooperate
- parties aren't required to disclose documentation
- ability to withdraw
- no 'day in court'
45
enforceability of verbal agreements...
unless there's a written agreement (essentially a contract) between the parties, then it's not enforceable through the courts
46
all parties must agree to a proposed resolution...
if one party has already shown rigid unwillingness to negotiate, mediation could prove to be a futile exercise
47
can increase costs if parties are unwilling to cooperate...
if one or both parties are unwilling to even consider settlement, then mediation will likely fail and just increase costs to parties overall
48
parties aren't required to disclose documentation...
there are no formal rules in mediation - therefore parties can deliberately withhold info if they think it will be damaging to their case
therefore the risk is that parties settle without having the full facts - this can hinder settlement in disputes where trust between the parties has completely disintegrated or there's a history of dishonesty between them
49
ability to withdraw from mediation...
parties can withdraw at any time, risking the exercise being expensive and causing unnecessary delay to court proceedings without a resolution being reached
50
no 'day in court'
a party who's seeking vindication or validation of their conduct or looking for the conduct of the opposing party to be penalised will likely not achieve this through mediation
51
ARBITRATIONNN
52
What is arbitration?
more formal type of ADR than mediation
53
What does arbitration involve?
an appointed arbitrator or panel of three arbitrators, hearing both sides of a dispute before coming to a decision
54
is the decision that the arbitrator comes to, binding on the parties?
yes
55
arbitration as a form of DR is most often selected in two ways. what are these?
1) due to a business agreement containing a clause that requires parties to arbitrate in the event of a dispute
2) by an agreement in writing between the parties to arbitrate once a dispute has arisen
56
In both of these situations, the parties contractually agree to...
1) engage in arbitration
2) be bound by the arbitrator's decision at the conclusion of the proceedings
57
how will the arbitrator typically be selected?
they will be specifically identified in the original contract between the parties or by subsequent written agreement
58
which act govern arbitration proceedings in england and wales?
Arbitration Act 1996 (provided the agreement is in writing)
59
what does the arbitrator do?
the arbitrator will decide on the relevant procedural and evidential matters, often require disclosure of key documents, and allow for witnesses to be examined and cross examined
- in this way, arbitration is similar to the court process
60
what is the key diff between arbitration and court process?
arbitration is quicker as it doesn't need to comply with the formal requirements and timetables laid out in the CPR
61
are the parties allowed to refer the matter to court if they're not satisfied with the outcome?
no, this is an important distinction between arbitration and mediation
62
is the decision taken by the arbitrator legally binding on the parties?
yes, in the same way that a court judgement would be
63
what are the advantages of arbitration?
- expertise of the arbitrator
- speed
- flexible
- confidential
- preserves relationships
- binding decision
- enforcement
64
expertise of the arbitrator
often the appointed arbitrator will have significant professional expertise in the area that's the subject of the dispute
- means they can be more pragmatic than a judge, who may only have minimal experience by comparison
65
speed
arbitration can be arranged more swiftly than parties could expect a full trial to take place
66
speed - can parties put a time limit on the length of the overall process
yes
67
how is arbitration flexibe?
the procedure that is laid down by the arbitrator can be tailored to suit the dispute
- the solution that's reached by the arbitrator is often more practical and pragmatic than any order which the parties could receive from the court
68
confidential...
proceedings and awards are confidential, unlike court judgements.
this is attractive in commercial actions where the parties don't want their clients/competitors to be aware that dispute has arisen
69
preserving relationships - is arbitration more or less likely to preserve commercial/personal relationships
more likely because its entirely confidential
- neither party need lose face publicly & it's more likely that a pragmatic solution will be reached and imposed by the arbitrator which takes account of the parties need or desire to maintain a working relationship
70
binding decision - in arbitration is the outcome certain?
yes - the parties contractually agree that they will both abide by the arbitrators decision prior to the arbitration hearing - means, the outcome is certain
but in mediation it isn't
71
can a party apply to the high court to enforce a final arbitral award?
yes - under s66 arbitration act 1996...they can apply to enforce this award in the same way as a party is free to return to the court to enforce a judgement
72
what are the disadvantages of arbitration?
- powers are more limited
- cost advantage over litigation is potentially small
- limited scope to challenge a decision
- disclosure and remedies available
72
disadvantage - powers are more limited
the powers that the arbitrator has to deal with obstructive or awkward parties are less than those of the court
therefore the process requires a degree of good faith between the parties
73
disadvantage - cost advantage over litigation is potentially small
the arbitrator (or panel of arbitrators), legal reps of both sides and any experts involved will all need to be paid, much in the same way as court proceedings
this therefore erodes any potential financial disadvantage over litigation
74
disadvantage - limited scope to challenge a decision
section 68(2) aa provides that a challenge to a decision will only be successful where the applicant can prove that there's a serious irregularity in the proceedings, the tirbunal or the award which caused substantial injustice to the applicant
the application must be made within 28 days of the award being made - the criteria are therefore v narrow
a serious irregularity can include where the arbitrator has erred on the particular point of law
75
disadvantage - disclosure & remedies available
depending on the process, rules relating to disclosure of key docs aren't as prescriptive in arbitration, leaving open the possibility that info could be withheld
the legal remedies available to the arbitrator are also slightly more limited than those of the court (eg the arbitrator couldn't make an order imposing an injunction on one of the parties)
76
EXAM WARNING
read the q carefully to identify the client's personal objectives if asked what type of ADR would be most suited to a particular dispute
- if one of the clients key objectives is flexibility to return to court if ADR doesn't work out - disregard arbitration as an option
- but if the client just wants matter to be settled quickly and doesn't care how it's achieved, then arbitration is more suitable
77
PRACTICE EXAMPLE
John consults you regarding a dispute that has arisen between him and his neighbour Barry, over the location of a boundary fence. John informs you he previously got on well with Barry, he doesn't wish to move house in the future and he would prefer a quick settlement.
Which type of ADR would best suit John's situation?
Mediation would be the best option
-allows him the opportunity to reach a negotiated settlement with Barry that both of them have worked towards and leaves him with the best chance of preserving a reasonable relationship with Barry once the dispute is over
78
LITIGATIONNN
79
What is litigation referred to in the CPR as?
the 'last resort' for parties who have been unable to resolve their dispute through ADR
80
what is litigation?
the process through which parties ask the court to impose a solution on them after having presented their case through docs and oral representations to a judge
81
Which rules is the litigation process governed by?
the CPR 1998
82
once proceedings are issued and defended, withdrawing without an agreement will likely result in...
the withdrawing party being ordered to pay the other side's costs
this is why entering into litigation must be carefully considered by the parties involved
83
What is the CPR?
the set o rules that govern how a civil court claim is conducted
84
how many rules are in the cpr?
89 in total, each of which is accompanied by a practice direction that explains how the rule is to operate
85
what can failure to comply with the cpr rules result in?
a sanction or penalty, being imposed by the court on the offending party
this is why it's essential that the CPR rules are complied with by litigating parties or their representatives
86
LITIGATION KEY TERMS
87
claimant
a person who makes a claim
88
defendant
a person against whom a claim is made
89
proceedings
an action taken through the court to settle a dispute
90
direction
instructions given to parties by the court on how they are to prepare or conduct a case (don't confuse with practice direction)
91
disclosure
the process by which a party makes docs and evidence available to the other party as part of the 'cards on the table ' approach encouraged by the cpr
92
expert
a person who has been instructed to give or prepare expert evidence for the purpose of proceedings
93
case management
the process by which the court actively manages the timetable and requirements of a particular claim/case
94
costs
reference to costs typically means the costs associated with the litigation incurred by the parties
eg court fees, expert fees and solicitor/barrister fees
95
leave
in the context of civil litigation is another word for permission
a judge will give leave to appeal - which means permission for a party to appeal a decision that has gone against them
96
listed
the process by which the court arranges the date for a hearing/trial
97
file
where a party sends a formal doc to court for placement on the court file, they're said to file that doc with the court
98
serve
where a party sends a formal doc to their opponent, they're said to serve that doc on the other party
99
sanction
a penalty that's imposed by the court on a party for failing to comply with a particular rule, order or direction
100
statement of case
a doc that sets out a party's case in court proceedings
101
the other side
a colloquial expression used commonly in practice to describe sols on opposing side of dispute
102
enforcement
process by which a party asks the court to force their opponent ti comply with an order made by the court at trial
103
what are the advantages of litigation
- strict rules that govern the behaviour of parties
- disclosure
- outcome may be easier to predict if there are similar previously decided cases
- binding decision
- appeal
- enforcement
104
advantage - strict rules that govern the behaviour of the parties
the cpr provide a rigid framework of rules that the court expects parties to comply with
if one party doesn't conduct themselves within the confines of these rules, the court can impose sanctions
these rules also contain guidance on pre-action conduct (how parties behave before a claim is issued) to ensure that litigation is only used when there's no alternative
105
advantage - disclosure
parties are required to put their 'cards on the table' and produce all available evidence that relates to the claim (including that which adversely affects a partys claim) at as early a stage as possible
failure to disclose a key piece of evidence by the deadline for disclosure will result in that piece being excluded unless the court specifically gives permission for it to be used
106
advantage - outcome may be easier to predict if there are similar previously decided cases
due to the rules surrounding precedent, a lower court is bound to follow the ruling of a higher court in the event that a decision on a point of law has been taken previously
107
advantage - binding decision
once the trial has concluded, the judge or judges will make a decision, enshrined into an order, that is binding on the parties
108
advantage appeal
parties have the right to apply for leave, or permission, to appeal a decision that has been taken
109
advantage - enforcement
in the event that the losing party fails to comply with a court order, the successful party can apply to the court to enforce the terms of that order
110
disadvantages of litigation
- time consuming
- complex to conduct without representation
- costly
- adversarial
111
disadvantage - time consuming
1) in order to be thorough and ensure the proper admin of justice, court sets a full timetable fort he case to follow, which is designed to allow for exploration of all the legal and evidential issues between parties
2) court is almost constantly dealing with backlog of cases, and listing takes place on first come first serve basis - therefore parties could be waiting for months before future trial date is set
112
disadvantage - complex to conduct without legal representation
despite there being helpful practice directions, CPR were drafted for lawyers by lawyers and are v difficult for layperson to follow, without the benefit of any legal advice or representation
113
disadvantage - costly
litigation is v expensive for parties
due to its complexity, parties typically instruct legal reps & given the volume of work that's required to prepare a matter for trial, legal fees are v high
other fees are also payable, such as expert fees, barrister fees, court fees
114
disadvantage - adversarial
the way in which litigation is conducted is naturally adversarial
- there will be a winner and loser, and v little chance of preservation of the relationship between parties after litigation has concluded
115
EXAM WARNING
even if client in q wants desires all advantages of litigation, they're still required to consider ADR
simply stating to the court that litigation fits better with the aims of the client will not be sufficient reason to not engage in ADR before issuing proceedings
116
which five stages can the litigation process be divided into
1) pre court involvement
2) commencing and defending formal proceedings
3) case management by the court
4) trial
5) post trial
117
1) pre court involvement
pre action conduct stage
CPR contain a number of pre-action protocols and a practice direction on pre-action conduct which guide parties on the steps to take prior to issuing proceedings
118
2) commencing and defending formal proceedings
how will the claimant commence proceedings?
by filing a claim form with the court, which will include particulars of claim (doc that sets out the facts, the legal basis on which the claim is made, and the remedy sought)
if the defendant wishes to defend the action, they will file a defence with the court and serve it on the claimant
119
3) case management by the court
what happens once the claim and defence have been files with the court?
a judge will allocate the claim to one of three tracks
the court will also issue directions to the parties on how they are to conduct the case and set deadlines to meet for each stage
stages include dates by which disclosure must take place, by which witness statements must be exchanged and, if the parties have the courts permission to rely on expert evidence, when that evidence must be files with the court
120
4) trial
what will the judge do after hearing all the evidence?
make an order that sets out who's liable to whom (liability) and for how much (quantum)
121
what will the judge do once they have made their decision on liability and quantum?
make an order on who will pay the legal costs of the matter, and in what percentage
122
5) post trial
this stage is only necessary if one party disagrees with the decision, and therefore appeals it, or if one party fails to pay some or all of the judgement debt or associated legal costs, and therefore needs to enforce the judgement
123
what is the most common sanction a court may impose?
adverse costs order
124
do parties have the right to refer a matter to court where they feel the arbitrator has misapplied the law?
yes - under s68 Arbitration Act 1996
125
can the arbitrator reconsider a decision already taken?
no
126
do the parties need to seek courts permission to appeal an arbitral decision
no
127
is there a time frame contained in the cpr or case law to indicate that after six weeks of no communication, parties are justified in issuing porceedings
no
