Different Options for Dispute Resolution
Alternative Dispute Resolution
Alternative dispute resolution (ADR) means of settling disputes outside of the
traditional litigation process.
If the client is willing to participate in ADR, it should be used, unless:
a) It is obviously inappropriate e.g., injunction is required.
b) The other party is unlikely to co-operate in the process.
c) The other party cannot be trusted to comply with an award.
• At all stages, the parties must consider settling this litigation by any means of
ADR; any partly not engaging in any such means proposed by another must
serve a witness statement giving reasons within 21 days of the proposal. Witness
statement must not be shown to the trial judge until questions of costs arise.
• Parties can withdraw at any time before a settlement is reached.
• A party who chooses not to engage in ADR may face penalties (costs
penalties) unless they have justification. At the court’s discretion.
• Burden is on the other party to show that the refusal is unreasonable.
• If it fails and court proceedings are taken, the court will not be made aware of the
ADR until after the judge has awarded damages.
• The court can now lawfully stay proceedings and order the parties to engage in
a non-court-based dispute resolution process (Churchill v Merthyr Tydfil CBC).
Provided that:
o The order made does not impair very essence of the claimant’s right to
proceed to a judicial hearing.
o Proportionate to achieving the legitimate aim of settling dispute fairly, quickly
and at reasonable cost.
• Negotiation is an important mean of achieving settlement and must be
considered throughout the litigation process.
Solicitors are required to confirm that they have explained to their client:
a) The need to try and settle.
b) The options available.
c) The possibility of costs sanctions if they refuse to attempt to settle
Mediation
Means of resolving disputes with the assistance of an independent third party i.e.,
agreed by both parties, not just selected by one party.
• Mediators will not impose a solution.
• The third party should be trained to act as a neutral and should have the
appropriate industry and commercial knowledge to understand the dispute.
• It is voluntary (outcome is voluntary) and confidential, or ‘without prejudice’.
Anything said to the mediator is confidential, unless express permission is
granted for information to be passed on.
Advantages:
• Cost and Speed: Cheaper than arbitration and litigation.
,• Flexibility: Parties are able to choose the procedure to be followed.
• Privacy: Clients, customers, and public are not aware of the circumstances or
the outcome of the dispute.
• Preserving a business relationship: Ideal where parties will continue to deal
with one another.
• Commercial reality: Can lead to arrangements which a court may not order.
• Ability to withdraw.
Disadvantage:
• Disclosure: Risk that parties may resolve the dispute without knowing all the
facts.
• Privacy: If a client needs public vindication, privacy means the client lose the
opportunity to demonstrate that they were not at fault.
• Enforcement: Even if an agreement is reached, it is not automatically binding,
cannot be enforced like a court judgment. However, agreed terms can form a
contract, which means a claim for breach of contract is available.
• Ability to withdraw
Arbitration
It is a substitute for litigation, once a party has agreed to be subjected to it, they
cannot then take advantage of the normal court processes. Dispute can be
referred to an independent arbitrator, arbitrator specified in the original contract, or
arbitrator chosen by parties for their expertise (could be single or a panel).
Arbitration can arise in 2 ways:
a) Parties may be contractually bound to use arbitration in the event of a dispute.
a. If the agreement to arbitrate is in writing, largely governed by the Arbitration
Act 1996.
b) Parties may agree to arbitration once a dispute has arisen.
Advantages
• Speed and sometimes lower cost.
• Procedures are less formal.
• Privacy: Preservation of business relationship.
• Decision made by an impartial third party with expertise.
• Solutions are often more practical than a court’s approach.
• Decisions (awards) are binding on the parties.
Disadvantages
• Less investigation: Procedure may not receive the depth of investigation it would
od in a court setting.
• Certain remedies are not available e.g., injunction.
• Costs: Arbitration is unlikely to be a cheap alternative.
• Decisions are binding with very limited rights of appeal.
Enforcement: Once decision has been reached, the winning party to an arbitration
can apply to the High Court under s.66 Arbitration Act 1996 for permission to
enforce the arbitration award as if it were a court judgment.
Litigation
,If the parties do not engage in ADR, they will be left with no alternative but to proceed
by way of litigation.
• Once they have entered litigation proceedings, neither party can withdraw
without paying the opponent’s costs.
• Litigations are able to break the deadlock between parties as the court will
impose its own solution.
, Resolving a Dispute Through a Civil Claim
Before issuing proceedings, all potential parties should be identified and located.
Financial viability of the defendant should also be checked. For a person under 18
and protected parties under Mental Capacity Act 2005, they must have litigation
friends who are able to fairly and competently conduct proceedings on behalf of the
party and have no adverse interest.
Types of Claims:
• Specified: A claim is specified if it is for a fixed amount of money e.g., debt owed.
• Unspecified Claim: Where the court will have to investigate to determine the
amount of money payable. Claims for damages are always unspecified. If it is a
mixture of specified and unspecified amounts, it is treated as unspecified.
Limitations: Limitation Act 1980
Before issuing proceedings, the solicitor must ensure that the client is not precluded
from making a claim, statute barred. If a party has missed the limitation period, the
defendant will have a complete defence. Court will only extend the deadline in
exceptional circumstances.
Contract (s.2)
For claims founded on contract, 6 years from the date of the cause of action to
commence proceedings.
• Cause of action accrues as soon as the breach of contract occurs. If a contract
for goods, start date is the day after delivery and the end date is 6 years from
the date of delivery.
• Unless a different limitation period is specified in the contract.
Tort (s.5)
For claims founded on tort, general rule is 6 years from the date of the cause of
action to commence proceedings.
• Cause of action accrues when the tort is committed.
• For negligence, when damage occurs as a result of a breach of duty.
Hidden or Latent Damage (s.14A)
If the damage is hidden when the course of action accrued, the limitation period
expires either:
a) 6 years from the date of the cause of action.
b) 3 years from the date of knowledge of the damage, whichever is later.
c) No later than 15 years after the date of the negligent act or omission.
Personal Injury
Personal injury: 3 years from the date of the cause of action or date of knowledge.
For children, time limit starts to run from their 18th birthday.
Alternative Dispute Resolution
Alternative dispute resolution (ADR) means of settling disputes outside of the
traditional litigation process.
If the client is willing to participate in ADR, it should be used, unless:
a) It is obviously inappropriate e.g., injunction is required.
b) The other party is unlikely to co-operate in the process.
c) The other party cannot be trusted to comply with an award.
• At all stages, the parties must consider settling this litigation by any means of
ADR; any partly not engaging in any such means proposed by another must
serve a witness statement giving reasons within 21 days of the proposal. Witness
statement must not be shown to the trial judge until questions of costs arise.
• Parties can withdraw at any time before a settlement is reached.
• A party who chooses not to engage in ADR may face penalties (costs
penalties) unless they have justification. At the court’s discretion.
• Burden is on the other party to show that the refusal is unreasonable.
• If it fails and court proceedings are taken, the court will not be made aware of the
ADR until after the judge has awarded damages.
• The court can now lawfully stay proceedings and order the parties to engage in
a non-court-based dispute resolution process (Churchill v Merthyr Tydfil CBC).
Provided that:
o The order made does not impair very essence of the claimant’s right to
proceed to a judicial hearing.
o Proportionate to achieving the legitimate aim of settling dispute fairly, quickly
and at reasonable cost.
• Negotiation is an important mean of achieving settlement and must be
considered throughout the litigation process.
Solicitors are required to confirm that they have explained to their client:
a) The need to try and settle.
b) The options available.
c) The possibility of costs sanctions if they refuse to attempt to settle
Mediation
Means of resolving disputes with the assistance of an independent third party i.e.,
agreed by both parties, not just selected by one party.
• Mediators will not impose a solution.
• The third party should be trained to act as a neutral and should have the
appropriate industry and commercial knowledge to understand the dispute.
• It is voluntary (outcome is voluntary) and confidential, or ‘without prejudice’.
Anything said to the mediator is confidential, unless express permission is
granted for information to be passed on.
Advantages:
• Cost and Speed: Cheaper than arbitration and litigation.
,• Flexibility: Parties are able to choose the procedure to be followed.
• Privacy: Clients, customers, and public are not aware of the circumstances or
the outcome of the dispute.
• Preserving a business relationship: Ideal where parties will continue to deal
with one another.
• Commercial reality: Can lead to arrangements which a court may not order.
• Ability to withdraw.
Disadvantage:
• Disclosure: Risk that parties may resolve the dispute without knowing all the
facts.
• Privacy: If a client needs public vindication, privacy means the client lose the
opportunity to demonstrate that they were not at fault.
• Enforcement: Even if an agreement is reached, it is not automatically binding,
cannot be enforced like a court judgment. However, agreed terms can form a
contract, which means a claim for breach of contract is available.
• Ability to withdraw
Arbitration
It is a substitute for litigation, once a party has agreed to be subjected to it, they
cannot then take advantage of the normal court processes. Dispute can be
referred to an independent arbitrator, arbitrator specified in the original contract, or
arbitrator chosen by parties for their expertise (could be single or a panel).
Arbitration can arise in 2 ways:
a) Parties may be contractually bound to use arbitration in the event of a dispute.
a. If the agreement to arbitrate is in writing, largely governed by the Arbitration
Act 1996.
b) Parties may agree to arbitration once a dispute has arisen.
Advantages
• Speed and sometimes lower cost.
• Procedures are less formal.
• Privacy: Preservation of business relationship.
• Decision made by an impartial third party with expertise.
• Solutions are often more practical than a court’s approach.
• Decisions (awards) are binding on the parties.
Disadvantages
• Less investigation: Procedure may not receive the depth of investigation it would
od in a court setting.
• Certain remedies are not available e.g., injunction.
• Costs: Arbitration is unlikely to be a cheap alternative.
• Decisions are binding with very limited rights of appeal.
Enforcement: Once decision has been reached, the winning party to an arbitration
can apply to the High Court under s.66 Arbitration Act 1996 for permission to
enforce the arbitration award as if it were a court judgment.
Litigation
,If the parties do not engage in ADR, they will be left with no alternative but to proceed
by way of litigation.
• Once they have entered litigation proceedings, neither party can withdraw
without paying the opponent’s costs.
• Litigations are able to break the deadlock between parties as the court will
impose its own solution.
, Resolving a Dispute Through a Civil Claim
Before issuing proceedings, all potential parties should be identified and located.
Financial viability of the defendant should also be checked. For a person under 18
and protected parties under Mental Capacity Act 2005, they must have litigation
friends who are able to fairly and competently conduct proceedings on behalf of the
party and have no adverse interest.
Types of Claims:
• Specified: A claim is specified if it is for a fixed amount of money e.g., debt owed.
• Unspecified Claim: Where the court will have to investigate to determine the
amount of money payable. Claims for damages are always unspecified. If it is a
mixture of specified and unspecified amounts, it is treated as unspecified.
Limitations: Limitation Act 1980
Before issuing proceedings, the solicitor must ensure that the client is not precluded
from making a claim, statute barred. If a party has missed the limitation period, the
defendant will have a complete defence. Court will only extend the deadline in
exceptional circumstances.
Contract (s.2)
For claims founded on contract, 6 years from the date of the cause of action to
commence proceedings.
• Cause of action accrues as soon as the breach of contract occurs. If a contract
for goods, start date is the day after delivery and the end date is 6 years from
the date of delivery.
• Unless a different limitation period is specified in the contract.
Tort (s.5)
For claims founded on tort, general rule is 6 years from the date of the cause of
action to commence proceedings.
• Cause of action accrues when the tort is committed.
• For negligence, when damage occurs as a result of a breach of duty.
Hidden or Latent Damage (s.14A)
If the damage is hidden when the course of action accrued, the limitation period
expires either:
a) 6 years from the date of the cause of action.
b) 3 years from the date of knowledge of the damage, whichever is later.
c) No later than 15 years after the date of the negligent act or omission.
Personal Injury
Personal injury: 3 years from the date of the cause of action or date of knowledge.
For children, time limit starts to run from their 18th birthday.
