WS8 - ADR

Question 1

ADR - Introduction: What is it important to do when advising on dispute?

Answer 1

Identify the most effective dispute resolution procedure, taking into account the nature of the dispute and client’s commercial interests.

Question 2

ADR - a) Types - i) Negotiation: What does this involve?

Answer 2

Negotiation is communciation process between parties intending to reach compromise or agreement for satiasfaction of both parties.

Question 3

ADR - a) Types - ii) Mediation: What do this involve?

Answer 3

• It is confiential process intended to provide resolution of disputes through medium of an impartial TP (Mediator)
• Each party will atend with legal representation at same location but different rooms.
• Mediator will move between rooms delivering settlement offers and guiding each party on the offers and alternatives to reach agreement.

**Note - Mediator has no authority to make any decision which is binding on paries and if does not result in resolution, the content remains confidential and will not be made known to court. **

Question 4

ADR - a) Types - iii) Aribtration: What does this involve?

Answer 4

• Artbitation is process by which dispute resolved by impartial adjudicator whose decision the parties to dispute have agreed and will be final and binding.
• By agreeing to this process, parties agree to oust jurisdiction of court to hear and give it to a diffeent impartial adjusdicator instead.

Question 5

ADR - a) Types - iii) Aribtration: What stage do decision to arbitreate arise?

Answer 5

• When negotiating a contract, parties may decide to include arbitration clause in agreement to cover future disputes.
• When dispute has arise, parties can choose to deal with it by way of arbitraton (even if no underlying agreement in contract)

Question 6

ADR - a) Types - iii) Aribtration: What are the advantages?

Answer 6

• Privacy
• easier enforcement in certain jursidictions
• Ability to choose specialist to determine the dispute
• Additional flexiblity as it can be adapted to suit needs of parties/dispute.

Question 7

ADR - a) Types - iv) Med-Arb What does this involve?

Answer 7

(Mediation/Arbitration) is process by which parties agree that, initially they will try resolve via mediation and if does not result in agreement, then will move on to arbitration tow hich binding determination made.

Question 8

ADR - a) Types - v) Early neutral evaluation/expert appraisal: What does this involve?

Answer 8

• An independen party is appointed by the parties.
• They will provide non-binding assessment of the matters referred to it.
• Assessment provides impartial opinion which might usefully influence the parties settlement discussions.
• They can be lawyer or expert in relavant matter.

Question 9

ADR - a) Types - vi) Expert determination: What does this involve?

Answer 9

• This is where an indepedent expert is appointed by parties to determine dispute.

Note - The difference to appriasal is that determination provides a binding outcome - Potential MCQ.

Question 10

ADR - a) Types - vii) Concilliation: What does this involve?

Answer 10

• A neutral TP helping parties to resolve the dispute.
• Process like mediation but may occasionally involvement more of an evaluation like ENE.
• No clear meaning so parties must ensure they understand what is envolved before starting.
• Often forms part of a statutory scheme which might provide who the concillator should be and processes involved unlikey mediation which is purely for parties.

Question 11

ADR - b) Why use: What is the overview of reasons?

Answer 11

Question 12

ADR - b) Why use - i) Court expecations: What do the court expect?

Answer 12

• Parties to act reasonably in relation to cosnidering and engaging ADR.
• Court can impose sanctions if not.

Question 13

ADR - b) Why use - ii) Better relationships: How does it preserve or created better relationship between parties?

Answer 13

• Factors such as business relationships, reputational issues, and personal emotions can eb taken into account.
• So, processs can assist parties in maintaining a commercial and/or personal relationship.

Question 14

ADR - b) Why use - iii) Less expensive and/or saves time: How does ADR allow for this?

Answer 14

• ADR can lead to resolution and less cost and time than litigation.

Question 15

ADR - b) Why use - iv) Great privacy/confidentiallity: How does ADR allow for this?

Answer 15

Litigation involves filing docs at court which might be accessible by public and hearings will genrally be public whereas all forms of ADR are private.

Question 16

ADR - b) Why use - v) Less disruptuon: How does ADR allow for this?

Answer 16

Might not need to search for documents or engage in as many internal meetings or attend court.

Question 17

ADR - b) Why use - vi) Outcomes reflect risks: What does this mean?

Answer 17

• In non-binding ADR, parties can agree settlement that reflects risks to each side such as % of winning at trial and agreeing settlement based on this figure.
• In court, judge cannot determine claim in such a way.

Question 18

ADR - b) Why use - v) Greater control/involvement: How does ADR allow for this?

Answer 18

• Such as ability to choose any TP involved such as arbitrator or mediator whereas cannot control court process in same way.
• Clients often prefer mediation for example to litigation and can become more involved and have their say, while litigation and be overwealming.

Question 19

ADR - c) Which form of ADR to choose: What does this depend on?

Answer 19

• This all depend on the indvidiual circumstances.
• When you know details of case, you should look over the why use ADR heading and determine which are most important for the client.

Question 20

ADR - e) Role of Lawyers: What will lawyer do in respect of ADR?

Answer 20

• Ensure client is fully aware of options for ADR.
• Help their client pursue any ADR it wishes to
• Act within the authroity to settle granted by cient in any settlement discussions.

Question 21

ADR - f) Timing: When should parties engage in ADR?

Answer 21

• A contract may already specify how and when ADR should be used.
• Some forms of ADR can only be considered at partiular time such as arbitration which is alternative to proceedings and therfore will almost always be pursued before issue.

Therefore, you should make a decision considering the factors below.

Question 22

ADR - f) Timing: What are the factors to balance when considering timing?

Answer 22

Question 23

ADR - f) Timing: In addition to factors above, what does CPR also contain for ADR?

Answer 23

• The various pre-action protocols and PD’s on pre-action conduct require parties to consider ADR.
• Guideance accompanying Precedent H (Costs budget) requries inclusion of some elements relating to negotiations and advising settlement.
• Directions questionaire for fast/intermediate and multi require legal representatives to confirm they have explained need to try settle, opinion and possible sanctions as well as opinion to request stay for settlement with parties having to state expressly why settlement might not be possible at early stage.
• At CMC, court likely want to know what steps parties have taken to explore ADR.

Question 24

ADR - g) Court encouragement: How do courts encourage parties to use ADR?

Answer 24

• May provide ADR information to parties.
• Court can also stat proceedings or order parties to engage in ADR. (However, if they are to, they must ensure it does not impair C’s right to proceed to judicial hearing and is proportioate to settling dispute fiarly and at reaosable cost.
• Court may also encourage parties to engage in ADR without going so far as to order it.

Question 25

**ADR - h) Costs:** What is the usual position?

Answer 25

The unsuccessful party pays successful party costs, however, costs are always at discretion of the court.

Question 26

**ADR - h) Costs:** When may court use discretion?

Answer 26

* One factor court considers when making costs order is the conduct of the parties which includes beforeand during proceedings. * Therefore, court can encourage ADR by rewarding ADR behaviour and punishing poor behaviour in costs. **Note - Cort may not known what happens in mediation for example as WOP, but will know if party refused. **

Question 27

**ADR - h) Costs:** What if successul party refused to engage in ADR?

Answer 27

* Court will conside rif refusal reaosnable and if not, court might impose costs penalty. * Burden will be on unsuccessful party to show court why it shoyuld depart from general rule and deprive successful party of some or all of its costs in which they will look at: (a) Nature of dispute - How suitable ADR was (b) Merits of the case - A refuse may be more justifable if party believes it to be very strong (c) Extent to which other settlement methods attempted (d) If costs of ADR would be dispropiationaly high (However, note that free or fixed fee mediation potentially avialable for low value claims) (e) If any delay in setting up and attending ADR would have been prejducial, especially if close to trial. (f) If ADR had a reasonable propsect of success.

Question 28

**ADR - h) Costs:** What is important to note regarding the factors above?

Answer 28

**Note, the above points are about a party who refused to engage when invited to do so, the court will not refuse to award costs to successful party because it did not positvely suggest ADR unless breaching pre-action protocol or PD on pre-action conduct. but silence on the face of an offer to engage will likely be considered unreasonable unless parties already engage in a form of ADR**

Question 29

**ADR - i) Practical Advice:** What should a party consider on receipt of an offer to engage in ADR?

Answer 29

* Consider with legal advisors merits of the offer * Respond promptly in writing and setting out reasons for its decision noting pricniples above. * if it does not wish to engage in ADR, explain in what different circumstances it would agree (rarely appropiate to indicate it would not be appropiate any any stage) * Make that letter open to or without prejudice save as to costs * Consider making seperate note of any other reasons for refusal that it is unwilling to express to opponent at that time, in a form whichc an later be shown to court.