The Civil Procedure Rules actively promote alternative dispute resolution (ADR) as a part of the overriding objective which aims to enable the court to deal with cases justly and at a proportionate cost. The court can impose penalties on parties who refuse to consider ADR without a sufficient reason in doing so.
Trainee Solicitor Helen Prince looks at the options.
What do we mean by ADR? There are various methods that can be employed to resolve disputes. The type of ADR will often depend on the type of dispute but also on the individual facts of each case.
The most common types of ADR are:
- Round table talks
- Without prejudice correspondence/discussion
Mediation is a formal process, usually overseen by a qualified mediator. The process usually involves bringing the parties to a dispute together with the Mediator. Although it is not necessary for the parties to be in the same room, or indeed see each other at all if that is preferred.
The Mediator will speak to each party to gain an understanding of their position, their desired outcome and any potential areas of compromise. The Mediator holds this information confidentially and will not divulge it to the other party.
In some complex cases, a mediation bundle enclosing relevant documents may be necessary and your solicitor can compile this for you.
A Mediator may then shuttle between the parties, depending on whether the parties wish to be in the same room as each other or not, and try to guide each party’s position closer to some middle ground.
Mediation is often successful, if not in resolving the dispute completely, it can be very helpful in narrowing the issues at play and may make any subsequent proceedings more defined and thus potentially quicker and more cost effective.
If a resolution is reached at mediation it can be binding providing the terms are written down in a legally binding document and signed by all parties.
Arbitration is a formal procedure whereby the parties select an Arbitrator, or panel of Arbitrators, who preside over the dispute in a ‘court like’ process. The parties agree to be bound by the Arbitrator’s final decision, which is only open to appeal in very limited circumstances.
Arbitration is generally used in types of dispute that require particular expertise, for example many construction/commercial contracts contain a provision requiring Arbitration to be used. It is rarely used in lower value or less complex claims as it can be relatively expensive to pursue.
Arbitration often provides a much swifter resolution to matters than pursuing a matter through the courts and there is the added benefit of being able to appoint an Arbitrator with particular technical experience / knowledge of the matter in dispute.
Round table talks
Round table talks are essentially ‘what it says on the tin’, they involve the parties sitting down together, informally, in the spirit of talking through the issues and reaching a solution to the dispute. This method of ADR can be particularly effective when the parties wish to continue to have a working relationship or have a similar goal.
However, such talks may not be legally binding unless the decisions reached are given legal status for example, the terms are recorded clearly in a document and signed by each party. It is always helpful to have a legal advisor attend such meetings so that the decisions reach can be recorded then and there to avoid any party changing their mind or the parties perceptions changing after the event.
Without Prejudice Correspondence/Discussions
This is perhaps the most common method of resolving disputes prior to the matter being decided at a court trial. It is also probably the most flexible of options as it can allow for any type of settlement and occur at any stage i.e. before or during legal proceedings.
In essence, without prejudice correspondence is correspondence which has been specifically marked as ‘without prejudice’ or ‘without prejudice subject to costs’, it can also be known as a Calderbank offers. In this correspondence the writer may make proposals for settlement. The court will not be privy to those proposals, except for at the point of determining costs, and so statements contained in such correspondence will not effect a party’s position within legal proceedings.
Discussions and correspondence such as encourages openness which is important when attempt to bring about a resolution to a dispute. This method allows the parties to put forward their position without prejudicing their claim/defence and can enable a better dialogue between the parties.
Without prejudice correspondence or discussions can be used to draw up a formal agreement which is legally binding. In the case of matters where legal proceedings are already in play, a Consent Order or Tomlin Order can be used to record the terms of the settlement and bring the proceedings to an end.
The one thing that parties often forget to consider when entering into negotiations is to consider what happens to the costs already borne by each party in respect of the dispute. It is important to ensure that you have agreed what is to happen in respect of costs, who is to bear each parties costs or is each party to bear their own costs. If this is not dealt with a party may leave themselves open to a further dispute regarding those costs.
How we can help
There are various types of ADR available but which method you opt for depends greatly on the type of dispute you are involved in and the funds available to you. Your solicitor can assist you in reviewing all the options available to you together with the advantages and disadvantages of each procedure.
For further information, please contact Helen Prince in the dispute resolution department on 01271 342268 or email [email protected]