Posted: Wednesday, 17 March 2010 @ 10:27
Understanding all the options
Prior to 1999 the first choice for resolving disputes was always the court process. There was an aggressive culture of litigation, a first strike attitude, or as some would say of getting your retaliation in first. Many a litigation lawyer had a paperweight proclaiming “Sue the ********”!
And then came along Lord Wolff with his broom, introducing a whole new court procedure in 1999 with an emphasis on the courts as a last resort, exhorting parties to be reasonable and try to resolve their differences by Alternative Dispute Resolution (ADR). But the change in behaviour has been slow. Even 10 years on there is still reluctance among many to embrace ADR, perhaps through fear of the unknown, or fear that to suggest ADR appears too conciliatory, too soft.
The court rules require parties to consider ADR before proceeding or indeed continuing with court action, and any refusal without good reason can result in a costs order against a party, even a successful party.
Commercial enterprises are beginning to grasp the opportunities of ADR. There are numerous forms of ADR:
- Expert Determination is where the parties jointly appoint an expert to decide a question which the parties accept will be binding on them. Usually this is a technical question which may be the deciding factor in a dispute. The expert could for example be a valuer of goods or property, or an engineer.
- Adjudication is common in the construction industry. Usually the decision is persuasive but non-binding, and often covers a many issues arising in an on-going contract.
- Arbitration is perhaps the oldest form of ADR. It is usually as expensive and inflexible as court proceedings, but with the advantage that the arbitrator who will decide the issues is an expert in the subject matter of the dispute, and hearings are in private. Many commercial agreements provide for disputes to be determined by arbitration. Awards made by an arbitrator are binding on the parties.
- Neutral Evaluation where the parties approach a neutral expert in the area of dispute for an indication of the likely outcome of court proceedings. The decision is non-binding but persuasive.
- Mediation is perhaps the most common form of ADR. The process is confidential, “without prejudice”, flexible, and only binding if the parties agree. The mediator is a trained facilitator only, skilled in identifying the strengths and weaknesses of each party’s case, and in moving the parties towards a settlement.
Each has their place and it’s important that the lawyer you choose can explain their suitability for your case.
To discuss a commercial dispute in strict confidence contact Cousins Business Law on 0845 003 5639.
Read more about the pros and cons of mediation in the October 2009 Cousins Business Law ezine.
For free advice on this topic please call us on 0845 003 5639.
Blog by Gary Cousins
Gary has been providing legal advice to shareholders, directors and business owners for over 25 years. Specialising in dispute resolution Gary is based in Birmingham with clients throughout the UK and overseas. View profile
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