ADR & Arbitration-
ADR-
Types of dispute resolution-
Negotiation-
communication process between parties - intended to reach a compromise or agreement to the
satisfaction of both parties.
Negotiation is the starting point for solicitors & their clients when trying to resolve a dispute.
-
Mediation-
Confidential process intended to facilitate the resolution of disputes through the medium of an impartial
third party.
The mediator has no authority to make binding decisions
In the event that the mediation does not end in an agreed resolution, the content of the mediation will
remain confidential and will not be made known to the court.
-
Med/ Arb-(mediation/arbitration)
Parties agree that, initially, they will try to resolve any dispute by mediation
In the event that this does not result in satisfactory resolution, the matter will move on to an arbitration
pursuant to which a binding determination will be made.
-
Expert appraisal-
An independent expert on the subject matter is appointed by the parties.
Either agreed on by the parties, or will be appointed by their nominee(s).
The expert will provide a non-binding assessment of the matter(s) referred to it.
The parties will have to pay the expert for its time and costs.
Expert determination-
An independent expert on the subject matter is appointed by the parties.
Often used in commercial agreements.
It is an inquisitorial process = a binding determination.
Rights of appeal are limited.
,The procedure is determined by the contract between the parties.
The expert will either be agreed, or appointed by their nominee.
The powers of the expert are usually set out in a separate ‘terms of reference’.
The parties will have to pay the expert for his time and costs.
The expert has no authority to make an order as to costs following his determination unless the parties
grant him such authority in the contract.
This form of ADR is particularly suitable for disputes requiring a technical knowledge, but may not be
suitable if the parties wish to be fully heard and there are issues of credibility.
Expert appraisal differs from expert determination in that the expert in an expert appraisal does not
deliver a binding resolution to the dispute. The expert instead gives a non-binding assessment of the
parties’ cases.
-
Early neutral evaluation-
An independent & neutral evaluator, often a QC or a retired judge, meets with the parties early on in the
dispute to give a non-binding and confidential assessment of the dispute
Most effective if attempted during the early stages of a case and before significant costs have
been incurred.
There are no procedural requirements for ENE beyond those agreed between the parties. The
Commercial Court specifically encourages parties to consider ENE.
Advantages = Where parties are engaged in direct discussions, the opinion of a mutually respected
neutral, such as a retired judge or a QC, may assist the negotiations.
Parties obtain a realistic appraisal of their cases and potentially break deadlocked bargaining
positions.
-
Why use ADR?-
CPR requires parties (+the court) to give greater consideration to ADR throughout a case. “Active case
management” includes:
1.4(e) - “encouraging the parties to use an alternative dispute resolution procedure if the court
considers it appropriate and facilitating the use of such procedure”
The above encouragement takes the following form:
1. Various “check points” in the case:
a) the pre-action protocol stage;
b) allocation; and
c) CMC, before directions are finalised for the case.
, 3.13, - court will require the parties to submit a costs budget in respect of their future work on &
conduct of the claim. The court can make a ‘costs management order’- 3.15.
Such a CMO is likely to have a direct effect on the level of costs recoverable by the parties.
The info submitted by the parties costs budget must take the form of Precedent H.
Precedent H makes express provision for ‘ADR/Settlement Discussions’.
The guidance accompanying Precedent H states that the following matters should be included expressly
in that form:
Settlement negotiations (including Part 36 and other offers) and advising the client with regards
to such
Drafting a settlement agreement or a Tomlin order; and
Advice to the client on settlement (excluding advice included in the pre-action phase).
Any proposed mediation should also be included in Precedent H as a ‘contingency’ (i.e. as an anticipated
future cost).
2. ‘Stays’ imposed by the court or granted at the request of the parties:
26.4 - A party may make a written request for the proceedings to be stayed while the parties try to settle
the dispute by ADR.
Usually made in the Directions Questionnaire.
If all the parties request a stay/ the court considers it appropriate, a stay of one month will
usually be ordered.
o Can be extended by the court (e.g. on application by the parties - 26PD3.1).
Generally be for no longer than 4 weeks
If no settlement is reached by the end of the stay, the claim will be allocated to a track and/or
appropriate directions given by the court for the future conduct of the claim - 26 PD 3.2
If settlement is reached within the stay period, the claimant must notify the court - 26.4(4) / 26 PD 3.4
The court can order a stay even if this is not agreed by all the parties – 26.4(2A).
If it becomes apparent that a negotiated settlement cannot be reached, a party can apply for a
stay to be ‘lifted’ so that the claim can proceed towards trial - 26 PD 3.3
Parties must state expressly why a settlement might not be achieved at this early stage in the
proceedings, if they do not require a stay of the proceedings.
3. Possible cost sanctions:
ADR-
Types of dispute resolution-
Negotiation-
communication process between parties - intended to reach a compromise or agreement to the
satisfaction of both parties.
Negotiation is the starting point for solicitors & their clients when trying to resolve a dispute.
-
Mediation-
Confidential process intended to facilitate the resolution of disputes through the medium of an impartial
third party.
The mediator has no authority to make binding decisions
In the event that the mediation does not end in an agreed resolution, the content of the mediation will
remain confidential and will not be made known to the court.
-
Med/ Arb-(mediation/arbitration)
Parties agree that, initially, they will try to resolve any dispute by mediation
In the event that this does not result in satisfactory resolution, the matter will move on to an arbitration
pursuant to which a binding determination will be made.
-
Expert appraisal-
An independent expert on the subject matter is appointed by the parties.
Either agreed on by the parties, or will be appointed by their nominee(s).
The expert will provide a non-binding assessment of the matter(s) referred to it.
The parties will have to pay the expert for its time and costs.
Expert determination-
An independent expert on the subject matter is appointed by the parties.
Often used in commercial agreements.
It is an inquisitorial process = a binding determination.
Rights of appeal are limited.
,The procedure is determined by the contract between the parties.
The expert will either be agreed, or appointed by their nominee.
The powers of the expert are usually set out in a separate ‘terms of reference’.
The parties will have to pay the expert for his time and costs.
The expert has no authority to make an order as to costs following his determination unless the parties
grant him such authority in the contract.
This form of ADR is particularly suitable for disputes requiring a technical knowledge, but may not be
suitable if the parties wish to be fully heard and there are issues of credibility.
Expert appraisal differs from expert determination in that the expert in an expert appraisal does not
deliver a binding resolution to the dispute. The expert instead gives a non-binding assessment of the
parties’ cases.
-
Early neutral evaluation-
An independent & neutral evaluator, often a QC or a retired judge, meets with the parties early on in the
dispute to give a non-binding and confidential assessment of the dispute
Most effective if attempted during the early stages of a case and before significant costs have
been incurred.
There are no procedural requirements for ENE beyond those agreed between the parties. The
Commercial Court specifically encourages parties to consider ENE.
Advantages = Where parties are engaged in direct discussions, the opinion of a mutually respected
neutral, such as a retired judge or a QC, may assist the negotiations.
Parties obtain a realistic appraisal of their cases and potentially break deadlocked bargaining
positions.
-
Why use ADR?-
CPR requires parties (+the court) to give greater consideration to ADR throughout a case. “Active case
management” includes:
1.4(e) - “encouraging the parties to use an alternative dispute resolution procedure if the court
considers it appropriate and facilitating the use of such procedure”
The above encouragement takes the following form:
1. Various “check points” in the case:
a) the pre-action protocol stage;
b) allocation; and
c) CMC, before directions are finalised for the case.
, 3.13, - court will require the parties to submit a costs budget in respect of their future work on &
conduct of the claim. The court can make a ‘costs management order’- 3.15.
Such a CMO is likely to have a direct effect on the level of costs recoverable by the parties.
The info submitted by the parties costs budget must take the form of Precedent H.
Precedent H makes express provision for ‘ADR/Settlement Discussions’.
The guidance accompanying Precedent H states that the following matters should be included expressly
in that form:
Settlement negotiations (including Part 36 and other offers) and advising the client with regards
to such
Drafting a settlement agreement or a Tomlin order; and
Advice to the client on settlement (excluding advice included in the pre-action phase).
Any proposed mediation should also be included in Precedent H as a ‘contingency’ (i.e. as an anticipated
future cost).
2. ‘Stays’ imposed by the court or granted at the request of the parties:
26.4 - A party may make a written request for the proceedings to be stayed while the parties try to settle
the dispute by ADR.
Usually made in the Directions Questionnaire.
If all the parties request a stay/ the court considers it appropriate, a stay of one month will
usually be ordered.
o Can be extended by the court (e.g. on application by the parties - 26PD3.1).
Generally be for no longer than 4 weeks
If no settlement is reached by the end of the stay, the claim will be allocated to a track and/or
appropriate directions given by the court for the future conduct of the claim - 26 PD 3.2
If settlement is reached within the stay period, the claimant must notify the court - 26.4(4) / 26 PD 3.4
The court can order a stay even if this is not agreed by all the parties – 26.4(2A).
If it becomes apparent that a negotiated settlement cannot be reached, a party can apply for a
stay to be ‘lifted’ so that the claim can proceed towards trial - 26 PD 3.3
Parties must state expressly why a settlement might not be achieved at this early stage in the
proceedings, if they do not require a stay of the proceedings.
3. Possible cost sanctions:
