Whilst disputes of any form are generally unwelcome, litigation through the court is and should be seen as a last resort. Aside from formal litigation there are many other methods of resolving disputes between parties. This is known as Alternative Dispute Resolution or “ADR” and CWJ’s Commercial Litigation Team has a wide range of experience in all forms.
Negotiations are the most common form of ADR and can either be between the parties directly (with or without solicitors present) or through correspondence. The aim is to reach a negotiated settlement which both parties can accept.
This is the process whereby the parties are assisted by an independent third party (the Mediator) to identify and understand each parties’ concerns, needs and interests; whereas litigation focuses on the parties’ legal rights and obligations. Mediation therefore allows more creative, fair and beneficial solutions to be reached. It can also overcome any problems with communication between the parties and can allow the parties to preserve their relationship.
Arbitration is a process whereby an impartial third party (the Arbitrator) is appointed to act in a judicial manner which allows a binding resolution to be reached in private. This has the benefit of assisting the parties to preserve their commercial relationship and keep their dispute out of the public domain whilst also allowing the Arbitrator’s Award to be enforceable as if it were a Court Order.
The parties can agree to submit any dispute to Arbitration either before the dispute between them has arisen or after. Arbitration gives the parties more control over the resolution process as it means that the parties can agree where, when, how and by whom the Arbitration is to be conducted. The parties are even free to decide in what circumstances an Arbitrator can cease to act and the remedies which can be awarded, although an agreement on these areas is more likely if the parties have agreed to Arbitration before the dispute between them has arisen.
This combines Mediation and Arbitration. The parties will agree to submit their dispute to Mediation and if this is unsuccessful then to Arbitration. Often the Mediator can also act as the Arbitrator and the benefit to this is that the third party will already be familiar with the facts and issues.
Early Neutral Evaluation / Expert Appraisal / Judicial Appraisal
Early Neutral Evaluation is a process by which the parties appoint a third party to give their opinion on the merits of each side’s case. The third party’s decision is not binding but it is useful guidance in subsequent negotiations.
Expert Appraisal and Judicial Appraisal involves the same process and outcome, although with Expert Appraisal the third party is an expert in the field relating to the dispute and with Judicial Appraisal the third party is a former Judge and the parties can agree to be bound by the decision reached.
The parties can also agree to be bound by the expert’s opinion under a process called Expert Determination. The expert’s decision is not enforceable as if it were a Court Order (as in Arbitration) but the other party can be sued for breach of contract if they do not abide by the decision.
All forms of ADR are voluntary but the Court expects each party to have attempted to reach a settlement and can impose cost sanctions on a party if it considers that they have been unreasonable either in settlement discussions or by refusing to engage in them.