Unit 4 Unit4 Adjudicative and Non-Adjudicative ADR

Question 1

Is the decision of non-adjudicative ADR binding?

Answer 1

No. Any settlement will be a matter of separate contractual agreement.

Question 2

Who decides the outcome in adjudicative ADR?

Answer 2

A third-party, e.g. Arbitrator

Question 3

What is Early Neutral Evaluation?

Answer 3

In an ENE, an independent and impartial evaluator is appointed by the parties to give an assessment or “evaluation” of the merits of their respective cases.  The evaluator can provide an authoritative (albeit provisional) view of the issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy in addressing those legal issues.  This evaluation may then be used as the basis for settlement negotiations.

Question 4

Is ENE limited to just factual issues?

Answer 4

No. ENE can be used to explore any combination of legal, evidential, factual or technical questions. ENE is usually non-binding and the process without prejudice, meaning that what is said by one party in ENE proceedings cannot be used later by the other party in any proceedings (with very limited exceptions).

Question 5

When might early Neutral Evaluation be useful?

Answer 5

• the parties have reached an impasse on a particular element of or issue in the case: an independent evaluator may be able to break such a deadlock by giving an unbiased opinion of what the outcome would be if the matter proceeded to a court or an arbitral tribunal;
• there is a great disparity between the parties’ positions: ENE can focus the minds of both parties and narrow the gap between them;
• one party has an unrealistic view of the case: receiving an independent evaluation of the case may help a party to realise that their arguments are unlikely to succeed in court; and/or
• confidentiality is essential: ENE is not a public process and does not produce any publicly available judgment or decision.

Question 6

Advantages of ENE

Answer 6

• highlight and clarify the issues in dispute;
• be faster than more traditional forms of dispute resolution;
• demonstrate the limits of a party’s case, any gaps in the evidence and the risks involved in pursuing litigation; and
• assist in settlement negotiations by encouraging parties to move to a more realistic negotiating position.

Question 7

Disadvantages of ENE

Answer 7

• the “winner” of the process is likely to become more entrenched in their position as a result of a positive evaluation, which may lead to them becoming more demanding in negotiations, thus hindering the settlement process;
• conversely, the “loser” is likely to find their negotiating position significantly undermined, thus decreasing their chances of achieving a satisfactory settlement; 
• ENE can be disproportionately expensive and time-consuming, if it does not result in a settlement;
• ENE may be too short and informal to deal with complex technical or factual questions, unless they can be broken down into single issues; and
• if ENE is carried out by the court, the judge carrying out the evaluation will not be able to take part in subsequent proceedings, unless both parties agree. ENE may therefore be used tactically to exclude a particular judge from hearing the case.

Question 8

Can one party assert ENE as a method of ADR?

Answer 8

No. As ENE is a voluntary process to which all parties must agree, the parties are free to determine the process and the identity of the evaluator

Question 9

Which two courts offer ENE as part of the case management process?

Answer 9

• Chancery Division (and TCC)
• Commercial Court
  Without prejudice, non-binding ENE process available in appropriate cases. If the parties wish, they may agree that the ENE evaluation is to be binding and not without prejudice, but the opposite is more usually the case.

Question 10

What is Expert Determination?

Answer 10

Expert determination is a form of alternative dispute resolution whereby the parties to a contract ask an independent expert to give a binding decision on a dispute. If the clause is drafted properly and it is used in the right circumstances expert determination can provide you with a quicker, cheaper and effective means of settling a dispute.

Question 11

When is Expert Determination mainly used?

Answer 11

the types of dispute that are referred to expert determination involve single issues and technical rather than legal questions. Classic examples include: 
• in a long-term contract where experts are required to give an opinion on technical issues likely to arise, such as assessing whether industrial plant machinery has met the acceptance criteria laid down by the parties, or measuring whether goods supplied meet the contractual specifications;
• where the contract provides for the value of the assets to be determined at some later date, such as a share purchase agreement where there are completion accounts, in the case of a rent review under a lease or in the case of a pension transfer.
The main advantage of expert determination is that is allows parties to a technical dispute to go “straight to the horse’s mouth”: why involve judges or arbitrators if they are going to turn to an expert for the answer?

Question 12

What are the key characteristics of Expert Determination?

Answer 12

• Based wholly on a contractual basis between parties
• No legislative background (unlike Arbitration for example)
• Privacy
• Finality
• Fully flexible/customisable procedure
• No Statutory Immunity (negligent decision = action available against the expert)

Question 13

Is the obligation of confidentiality in Mediation absolute?

Answer 13

No. The Court has the power to permit evidence of confidential communications in mediation to be given or produced if it is in the interests if justice to do so.

Question 14

What is a Tomlin Order?

Answer 14

Often used to record a mediation agreement. A Tomlin Order is a type of consent order. The order records terms of settlement agreed between the parties but those terms are not ordered or approved by the court and are not enforceable as a judgment, at least not without a further order. The Tomlin Order must be drafted in a particular form. Guidance is provided in CPR Part 40. The parties agree to the terms set out in a schedule and it is ordered that all further proceedings in the claim be stayed except for the purpose of carrying such terms into effect. Liberty to apply for carrying such terms into effect must be sought.

Question 15

Non-Adjudicative Measures of ADR

Answer 15

Offer and Acceptance (e.g. Part 36)
Negotiation
Mediation
Conciliation 
ENE/Expert Evaluation
Mini-Trial
Complaint/Grievance Procedure

Question 16

Adjudicative measures of ADR

Answer 16

Litigation
Arbitration
Expert Determination

Question 17

What are the 4 different types of award available to Arbitrators?

Answer 17

• There are four different types of awards and orders that are available to arbitrators, namely:
1. procedural orders - Provide procedural directions and measures designed to preserve evidence or the subject matter of the dispute while in arbitration is proceeding.
2. interim awards - which finally dispose of one or more of the substantive issues in arbitration leaving the other issues to be decided later
3. final awards - finally disposing of the arbitration; and,
4. costs award - which provide for the payment of the costs incurred in the arbitration between the parties.
• Usually once an order or award is made it is binding on the parties

Question 18

What is the procedure for challenging Expert Determination?

Answer 18

If the parties agree that their disputes should be resolved by expert determination and that the experts decision is to be conclusive and binding for all purposes, then providing the expert has done exactly what he or she was instructed to do, the report, whether or not it contained reasons for the decision, can generally not be challenged by seeking to set aside in court proceedings.
A challenge to the decision in an expert determination will usually be made by issuing Part 8 proceedings.
Part 8 proceedings may also be issued in advance of an expert determination to decide any disputes about the interpretation of the expert determination clause, or to resolve disagreement about matters that should be referred to the expert pursuant to the clause.
If the decision is set aside, the court may, in some circumstances, make the determination itself, if necessary after considering it but evidence adduced by the parties, or it may director new expert to be instructed to determine the matter.