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Think dispute, think ADR
Mar 24, 2010
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ADR is alternative dispute resolution - a range of options for
resolving disputes without going to court. Methods of ADR include mediation,
adjudication, arbitration, conciliation and ombudsman schemes.
In recent
years, there has been a
growing trend towards resolving disputes by methods other than via the
courts.
Even so, disputing parties often fail to consider ADR—or consider it far
too
late, by which time costs have spiralled, leaving no realistic way of
out-of-court
resolution.
The courts are keen to encourage
the use of ADR and any business already involved in a dispute or likely to be, needs
to be aware of the consequences of ignoring this.
There are many different
directions and protocols governing pre-action conduct, the most recent of which
came into force last April (2009). These make it clear that the parties must consider
ADR and failure to do so may result in an adverse costs order.
Parties are reminded that they
need to consider the possibility of reaching a settlement ‘at all times’, both
after proceedings have commenced and up to any trial or final hearing. Following
the case of Birchall v Bullard courts
can penalise a party who ignores an offer to mediate at the pre-action stage.
The preamble to allocation questionnaire
forms (normally provided to parties after statements of case have been filed
and served) states: “the parties should make every effort to settle their
case before the hearing. This could be by discussion or negotiation (such as a
round the table meeting or settlement conference) or by a more formal process
such as mediation. The court will want to know what steps have been taken. Settling
the case early can save costs, including court hearing fees.”
That said, there are some
circumstances in which it is reasonable to refuse to mediate or refuse a
certain type of ADR. For example, there may be no real prospect of success; your
opponent may have seriously misjudged the facts; or may be behaving extremely
irrationally; or the costs of pursuing mediation would be disproportionate.
Something
else to be aware of is that a disputing party can discharge his obligations
under the rules provided he considers at least some form of ADR. For example,
if he refuses one particular type of mediation and the court believes a
different option would be a viable way of resolving matters, he should not be
penalised in refusing to mediate.
The shift towards the increasing
use of mediation and ADR generally is likely to continue. In his final report
on civil litigation costs, Lord Justice Jackson has called for a serious
campaign to raise awareness of the benefits of ADR.
Our dispute resolution team is experienced in all forms
of ADR and lead partner Nick Cox is an ADR Group-accredited mediator. The ADR
Groupis acknowledged nationally and internationally as a leading
authority in mediation and other dispute resolution techniques. paul.gordon@willans.co.uk