DISPUTE
RESOLUTION
,
, Different options for dispute resolution
The characteristics of arbitration, mediation and litigation which make them an
appropriate mechanism to resolve a dispute
Arbitration – largely governed by statute, namely the Arbitration Act 1996 (provide that the
agreement to arbitrate is in writing)
Arbitration is an adjudication operating outside the normal court process, where a third
party reaches a decision that is binding on the parties in the dispute. Many business
contracts contain an arbitration clause requiring the parties to refer their disputes to
arbitration rather than litigation. Where such a clause does not exist, the parties in the
dispute may agree to arbitration once the dispute has arisen, and may choose their own
arbitrator.
Advantages of the parties agreeing to arbitration instead of litigation –
Arbitration may be quicker than litigation
The procedures are less formal and occur in private
The solutions reached are often more practical than those a court has power to
order
Those decisions are binding on the parties
Disadvantages of arbitration –
Certain remedies such as injunctions are not available
Depending on the procedures adopted, the dispute may not receive the depth of
investigation it would’ve done in the courts
Not always necessarily cheaper than litigation
Alternative Dispute Resolution (ADR)
ADR is a means of resolving disputes, normally by using an independent third party to help
the parties to reach a solution. The third party will often suggest a solution to the parties but
not impose one (non-determinative ADR). But sometimes the third party will impose a
solution (determinative ADR). The decision to use ADR is voluntary – the parties choose the
process and either of them can withdraw at any time before a settlement is reached.
Various types of ADR e.g. mediation, expert appraisal or expert determination.
Courts cannot order that parties must use ADR (Halsey v Milton Keynes General NHS Trust
[2004])
Advantages of ADR –
Cheapness and speed – can be significantly cheaper than arbitration and litigation
because it is quicker. A skilled neutral can help the parties to resolve their dispute in
a short period of time
, Flexibility – parties can choose several forms of ADR. They do not have to comply
with any statutes or court rules. There is not even any case law limiting what the
parties or neutrals can do
Commercial reality – a third party unconnected with the dispute may be able to
assist the parties to arrive at realistic and workable terms of settlement
Preserving a business relationship – mitigation is private. ADR is ideal for cases
where the parties are going to have to continue to deal with each other. The fact
they’ve chosen a non-confrontational method of solving their problem makes it
easier for them to continue their relationship since the solution is theirs and has not
been imposed upon them.
Disadvantages of ADR –
Doesn’t bind the parties to the procedure
Awards are not so easily enforceable – if parties agree to terms, as suggested as
result of non-determinative ADR, they’ve entered into a contract. If one of the
parties doesn’t carry out the contract, he can be sued for breach of contract. It is
standard practice in ADR to provide that no agreement will be binding upon the
parties unless it’s in writing and signed by both parties.
The facts may not be fully disclosed – no equivalence of disclosure means there is a
risk that the parties may resolve the dispute without knowing all the facts, which
may lead to the wrong decision
ADR is not appropriate in the following cases:
(a) Where the client needs an injunction or security for costs
(b) Where there is no dispute. If the case was a simple debt collection matter, the
creditor should issue a claim form followed by a summary judgement application or
consider insolvency proceedings
(c) Where the client needs a ruling on point of law
Litigation
Litigation is the process of taking a dispute to a court of law. If parties cannot agree between
themselves about the fair and proper outcome of a dispute, they represent their cases to a
court for its judgement.
There are. Wide range of cases which can be resolved using litigation –
Commercial disputes e.g. claims for breach of contract such as damaged goods or
recovery of debts
Matrimonial matters e.g. determining the extent of a spousal claim in a divorce
action
Claims against the state
Personal injury claims e.g. monetary damages arising out of an accident where a
person suffered harm
Employment disputes e.g. claim for wrongful dismissal
Advantages of litigation –
RESOLUTION
,
, Different options for dispute resolution
The characteristics of arbitration, mediation and litigation which make them an
appropriate mechanism to resolve a dispute
Arbitration – largely governed by statute, namely the Arbitration Act 1996 (provide that the
agreement to arbitrate is in writing)
Arbitration is an adjudication operating outside the normal court process, where a third
party reaches a decision that is binding on the parties in the dispute. Many business
contracts contain an arbitration clause requiring the parties to refer their disputes to
arbitration rather than litigation. Where such a clause does not exist, the parties in the
dispute may agree to arbitration once the dispute has arisen, and may choose their own
arbitrator.
Advantages of the parties agreeing to arbitration instead of litigation –
Arbitration may be quicker than litigation
The procedures are less formal and occur in private
The solutions reached are often more practical than those a court has power to
order
Those decisions are binding on the parties
Disadvantages of arbitration –
Certain remedies such as injunctions are not available
Depending on the procedures adopted, the dispute may not receive the depth of
investigation it would’ve done in the courts
Not always necessarily cheaper than litigation
Alternative Dispute Resolution (ADR)
ADR is a means of resolving disputes, normally by using an independent third party to help
the parties to reach a solution. The third party will often suggest a solution to the parties but
not impose one (non-determinative ADR). But sometimes the third party will impose a
solution (determinative ADR). The decision to use ADR is voluntary – the parties choose the
process and either of them can withdraw at any time before a settlement is reached.
Various types of ADR e.g. mediation, expert appraisal or expert determination.
Courts cannot order that parties must use ADR (Halsey v Milton Keynes General NHS Trust
[2004])
Advantages of ADR –
Cheapness and speed – can be significantly cheaper than arbitration and litigation
because it is quicker. A skilled neutral can help the parties to resolve their dispute in
a short period of time
, Flexibility – parties can choose several forms of ADR. They do not have to comply
with any statutes or court rules. There is not even any case law limiting what the
parties or neutrals can do
Commercial reality – a third party unconnected with the dispute may be able to
assist the parties to arrive at realistic and workable terms of settlement
Preserving a business relationship – mitigation is private. ADR is ideal for cases
where the parties are going to have to continue to deal with each other. The fact
they’ve chosen a non-confrontational method of solving their problem makes it
easier for them to continue their relationship since the solution is theirs and has not
been imposed upon them.
Disadvantages of ADR –
Doesn’t bind the parties to the procedure
Awards are not so easily enforceable – if parties agree to terms, as suggested as
result of non-determinative ADR, they’ve entered into a contract. If one of the
parties doesn’t carry out the contract, he can be sued for breach of contract. It is
standard practice in ADR to provide that no agreement will be binding upon the
parties unless it’s in writing and signed by both parties.
The facts may not be fully disclosed – no equivalence of disclosure means there is a
risk that the parties may resolve the dispute without knowing all the facts, which
may lead to the wrong decision
ADR is not appropriate in the following cases:
(a) Where the client needs an injunction or security for costs
(b) Where there is no dispute. If the case was a simple debt collection matter, the
creditor should issue a claim form followed by a summary judgement application or
consider insolvency proceedings
(c) Where the client needs a ruling on point of law
Litigation
Litigation is the process of taking a dispute to a court of law. If parties cannot agree between
themselves about the fair and proper outcome of a dispute, they represent their cases to a
court for its judgement.
There are. Wide range of cases which can be resolved using litigation –
Commercial disputes e.g. claims for breach of contract such as damaged goods or
recovery of debts
Matrimonial matters e.g. determining the extent of a spousal claim in a divorce
action
Claims against the state
Personal injury claims e.g. monetary damages arising out of an accident where a
person suffered harm
Employment disputes e.g. claim for wrongful dismissal
Advantages of litigation –
