A short guide to alternative dispute resolution (ADR)

22 January 2020

The Court continues to emphasise the importance of parties to litigation or potential litigation attempting to resolve their dispute by alternative means, and may penalise parties for not doing so. This article explores some of the more common alternative procedures.

Mediation

 A flexible process where a neutral person (the mediator) assists in helping parties work towards a negotiated agreement in which the parties control the decision and terms of settlement.

Advantages

 Confidential, unlike litigation.

  • Parties can choose the mediator whereas in litigation a judge is allocated.
  • Quick process (rarely lasting more than a days or so) and has high success rates (65-85%).
  • If mediation is not successful, parties may benefit from hearing the other parties’ point of view and testing the strengths and weaknesses of their case.

 Disadvantages 

  • As mediation is voluntary, the parties are free to walk away at any point without a resolution.
  • Unlike litigation, a mediator cannot order disclosure or expert reports so parties may be mediating without all the relevant facts and documents.
  • Although nothing said in mediation can be used later in proceedings, a party may inadvertently reveal strategic information.

 Expert Determination

 A process where the parties choose an expert to provide a binding opinion on the dispute at hand.

 Advantages

 Confidential, unlike litigation.

  • Useful where a valuation is required or a decision is needed on a specific technical point.
  • Tends to be cheaper and quicker than litigation.
  • Can be non-contentious thus helping parties to preserve a commercial relationship.

 Disadvantages 

  • Less detailed investigation into the dispute as disclosure not typically provided.
  • An expert’s award may not be immediately enforceable unlike a final a judgment. Successful parties would typically first have to bring a breach of contract action against a defaulting party.

 Arbitration

 A formal process whereby one or more independent parties, governed by an agreed set of rules, provide a binding award in relation to the dispute at hand.

 Advantages 

  • Confidential, unlike litigation.
  • Choice different arbitral bodies with different rules and procedures. Parties can therefore choose the rules that complement their case the most.
  • If in agreement, the parties can control who will be appointed as arbitrator(s), where the arbitration will take place and at what time.
  • Parties can reach practical solutions to disputes that are not available in court. 

Disadvantages 

  • Limited opportunities if a party wishes to challenge or appeal the arbitrator’s decision.
  • Can often be expensive and in some cases more expensive than litigation.
  • Non-lawyer arbitrators may be less well equipped to rule on complex legal issues than judges.

Jack Foster Author
Jack Foster
Trainee Solicitor
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