Workshop 1: Pre-Action Steps, Case Analysis & Funding
ALTERNATIVES TO LITIGATION
Litigation should be commenced as a last resort. Parties should always consider alternatives before
issuing proceedings.
Arbitration – Pg 34.
Adjudication outside of the normal court process by which third party reaches a decision that is
binding on the parties
Governed by the Arbitration Act 1996
Advantages Disadvantages
Quicker than litigation Certain remedies such as injunctions are not
Procedures are less formal and occur in private available
Solutions reached are more practical Time and depth of investigation is less
Decision is binding formal than what the claim would receive in
Winning party can apply to the High Court for court
permission to enforce award as if it were normal Not always cheaper than litigation
court order (S66 AA 1996)
Alternative Dispute Resolution (ADR) – Pg 57
A means of resolving a dispute by using an independent third party to help the parties reach a
settlement. Third party can suggest a solution but cannot impose
PD para 8 provides that ADR must be considered or regard will be had to this failure when awarding
costs (para 11). The court cannot order ADR but the parties should not unreasonably refuse it
Dunnet v Railtrack [2002] court deprived successful party of its costs because it unreasonably
refused to mediate
CPR 1.4(2)(e) provides that the court must further the overriding objective which includes
encouraging parties to use ADR if appropriate
PD29 4.10(9) provides that the court may give directions requiring the parties to consider ADR
however, cannot order parties to use ADR – Halsey v Milton Keynes General Trust [2004]
Court will usually require evidence that the parties considered ADR
If a party refuses ADR they should file a WS detailing the reasons for this
Litigation proceedings can be suspended to allow an attempt at ADR, as in Cable & Wireless v IBM
[2002]
Advantages Disadvantages
Parties are free to leave proceedings at any time Decision to use ADR is voluntary and either
Quicker party can withdraw from the process at any
Cheaper time before a settlement is reached
Less formal and confrontational (may save Some remedies like injunctions are not
relationships) available.
Confidential &private - avoids adverse publicity Not necessarily always cheaper
Settlements can preserve business relations by Dispute may not be investigated in such
incorporating agreements on commercial depth as it would be in court
matters. Does not have equivalent of disclosure rules
Flexibility (lots of different methods) Unlike arbitration, ADR decisions cannot be
enforced like a court order and the winning
party must bring breach of contract
proceedings
Not appropriate in all cases
Private – Client may welcome publicity
TYPE DETAIL
, Workshop 1: Pre-Action Steps, Case Analysis & Funding
Mini-Trial Third party sits at a tribunal as chairperson and two senior representatives with
authority to settle from each party attend. They negotiate with help from chairperson.
Early Neutral The parties ask a neutral third party to give a preliminary view of their positions and
Evaluation make a recommendation.
Final Offer A third party is told to choose between the ‘final offers’ put on the table by each of the
Arbitration parties. This forces both to make realistic offers.
Expert Expert third party in the disputed field gives a non-binding opinion.
Appraisal
Expert Expert third party give binding opinion (halfway to arbitration). Decision cannot be
Determination enforced as a court order though – just contractually binding.
Judicial Legal expert offers preliminary appraisal of the merits of each party’s legal position
Appraisal (parties decide whether they wish it to be binding).
Med-Arb Parties attempt mediation with the proviso that if it doesn’t work they proceed straight
to arbitration. May save costs by using same arbitrator but this arbitrator may become
privy to confidential information which would compromise this.
Mediation Parties instruct chosen neutral third party to which they both make an offer of terms
on which they will settle and he chooses one of the two.
Negotiation Correspondence between solicitors in an attempt to limit the areas of dispute and
come to an agreement
FUNDING – Pg 16
Solicitor should always give his client the best information about likely cost of the matter and advise
on the different options of funding available and insurance cover
CPR Rule 44.2(2)(a) provides that as a general rule the unsuccessful party will be ordered to pay
the costs of the successful party. This is usually the sum ordered by the court or agreed between
the parties
Funding choices:
o Private funding
o BTE
o Public funding
o Trade union funding
o Conditional Fee Agreement
o Damages Based Agreement
Conditional Fee Agreements “No win, no fee”
Defined by S58(2)(a) of the Courts and Legal Services Act 1990 as “an agreement with a person
providing advocacy or litigation services which provides for his fees and expenses, or any part of
them, to be payable only in specified circumstances”. Those circumstances are whether or not the
client succeeds
When entering a CFA, solicitor should undertake full risk assessment as this is a financial risk
CFA is an agreement in which solicitor received no payments or less than normal payment if claim
is lost but receivers normal or higher than normal if claim is successful
Only enforcement if it meets requirements of S58 of the CLSA 1990:
o Only entered in relation to any civil litigation matter (excl. family)
o In writing
o State the percentage of the fee increase
Where it is agreed the solicitor should receive higher than normal payment if case if won, the
success fee cannot 100% of solicitors usual charges
If client wins, costs received from their opponent cannot include the success fee as this is payable
by the client. Client should be made fully aware of this.
Solicitor is under a duty to act in the best interests of their client which includes checking to see if
they have the benefit of BTE – if so, CFA not necessary
ALTERNATIVES TO LITIGATION
Litigation should be commenced as a last resort. Parties should always consider alternatives before
issuing proceedings.
Arbitration – Pg 34.
Adjudication outside of the normal court process by which third party reaches a decision that is
binding on the parties
Governed by the Arbitration Act 1996
Advantages Disadvantages
Quicker than litigation Certain remedies such as injunctions are not
Procedures are less formal and occur in private available
Solutions reached are more practical Time and depth of investigation is less
Decision is binding formal than what the claim would receive in
Winning party can apply to the High Court for court
permission to enforce award as if it were normal Not always cheaper than litigation
court order (S66 AA 1996)
Alternative Dispute Resolution (ADR) – Pg 57
A means of resolving a dispute by using an independent third party to help the parties reach a
settlement. Third party can suggest a solution but cannot impose
PD para 8 provides that ADR must be considered or regard will be had to this failure when awarding
costs (para 11). The court cannot order ADR but the parties should not unreasonably refuse it
Dunnet v Railtrack [2002] court deprived successful party of its costs because it unreasonably
refused to mediate
CPR 1.4(2)(e) provides that the court must further the overriding objective which includes
encouraging parties to use ADR if appropriate
PD29 4.10(9) provides that the court may give directions requiring the parties to consider ADR
however, cannot order parties to use ADR – Halsey v Milton Keynes General Trust [2004]
Court will usually require evidence that the parties considered ADR
If a party refuses ADR they should file a WS detailing the reasons for this
Litigation proceedings can be suspended to allow an attempt at ADR, as in Cable & Wireless v IBM
[2002]
Advantages Disadvantages
Parties are free to leave proceedings at any time Decision to use ADR is voluntary and either
Quicker party can withdraw from the process at any
Cheaper time before a settlement is reached
Less formal and confrontational (may save Some remedies like injunctions are not
relationships) available.
Confidential &private - avoids adverse publicity Not necessarily always cheaper
Settlements can preserve business relations by Dispute may not be investigated in such
incorporating agreements on commercial depth as it would be in court
matters. Does not have equivalent of disclosure rules
Flexibility (lots of different methods) Unlike arbitration, ADR decisions cannot be
enforced like a court order and the winning
party must bring breach of contract
proceedings
Not appropriate in all cases
Private – Client may welcome publicity
TYPE DETAIL
, Workshop 1: Pre-Action Steps, Case Analysis & Funding
Mini-Trial Third party sits at a tribunal as chairperson and two senior representatives with
authority to settle from each party attend. They negotiate with help from chairperson.
Early Neutral The parties ask a neutral third party to give a preliminary view of their positions and
Evaluation make a recommendation.
Final Offer A third party is told to choose between the ‘final offers’ put on the table by each of the
Arbitration parties. This forces both to make realistic offers.
Expert Expert third party in the disputed field gives a non-binding opinion.
Appraisal
Expert Expert third party give binding opinion (halfway to arbitration). Decision cannot be
Determination enforced as a court order though – just contractually binding.
Judicial Legal expert offers preliminary appraisal of the merits of each party’s legal position
Appraisal (parties decide whether they wish it to be binding).
Med-Arb Parties attempt mediation with the proviso that if it doesn’t work they proceed straight
to arbitration. May save costs by using same arbitrator but this arbitrator may become
privy to confidential information which would compromise this.
Mediation Parties instruct chosen neutral third party to which they both make an offer of terms
on which they will settle and he chooses one of the two.
Negotiation Correspondence between solicitors in an attempt to limit the areas of dispute and
come to an agreement
FUNDING – Pg 16
Solicitor should always give his client the best information about likely cost of the matter and advise
on the different options of funding available and insurance cover
CPR Rule 44.2(2)(a) provides that as a general rule the unsuccessful party will be ordered to pay
the costs of the successful party. This is usually the sum ordered by the court or agreed between
the parties
Funding choices:
o Private funding
o BTE
o Public funding
o Trade union funding
o Conditional Fee Agreement
o Damages Based Agreement
Conditional Fee Agreements “No win, no fee”
Defined by S58(2)(a) of the Courts and Legal Services Act 1990 as “an agreement with a person
providing advocacy or litigation services which provides for his fees and expenses, or any part of
them, to be payable only in specified circumstances”. Those circumstances are whether or not the
client succeeds
When entering a CFA, solicitor should undertake full risk assessment as this is a financial risk
CFA is an agreement in which solicitor received no payments or less than normal payment if claim
is lost but receivers normal or higher than normal if claim is successful
Only enforcement if it meets requirements of S58 of the CLSA 1990:
o Only entered in relation to any civil litigation matter (excl. family)
o In writing
o State the percentage of the fee increase
Where it is agreed the solicitor should receive higher than normal payment if case if won, the
success fee cannot 100% of solicitors usual charges
If client wins, costs received from their opponent cannot include the success fee as this is payable
by the client. Client should be made fully aware of this.
Solicitor is under a duty to act in the best interests of their client which includes checking to see if
they have the benefit of BTE – if so, CFA not necessary
