Contributed By Signature Litigation LLP
There are a number of different forms of alternative dispute resolution (ADR) available in England and Wales including mediation, arbitration (discussed in 13 Arbitration, below), expert determination and early neutral evaluation.
Mediation is a flexible and confidential form of ADR and generally involves the appointment of a neutral third party who helps the parties work towards a settlement of their dispute. The parties are never under an obligation to settle and therefore mediation can be a useful precursor or complement to more formal dispute resolution methods such as litigation or arbitration.
Expert determination is usually sought where a valuation is required or where expert opinion is needed on a technical point. The process involves a binding contractual commitment between the parties to abide by the findings of the expert. This arrangement may be put in place on an ad hoc basis after a dispute has arisen, but is more commonly provided for in commercial agreements as a way to limit potential legal costs in the event of a dispute.
Early neutral evaluation involves the appointment of a neutral party, often a judge or QC, who hears submissions from the parties and gives a view as to which party is likely to be successful at trial. The process is non-binding and does not generally require a party to settle as a result of the evaluation.
The pre-action protocols set out in the Civil Procedure Rules (discussed in 3.1 Rules on Pre-action Conduct, above) note that litigation should be a last resort and require the parties to consider negotiation or an alternative form of dispute resolution before commencing court proceedings and continue to consider whether they might reach a settlement throughout the proceedings.
If a party refuses unreasonably to participate in ADR, such as mediation, the court may stay the proceedings and require the parties to participate in ADR or impose costs sanctions on the reluctant party at the end of trial. It has been held that a failure to respond to an offer to participate in ADR will generally be considered unreasonable.
For most claims, the parties are required to file directions questionnaires in advance of the first case management conference, which ask for confirmation that the legal representatives have explained to their client the need to try to settle and the possibility of costs sanctions if they refuse. The directions questionnaire also asks the party to confirm whether they wish a one month stay in order to attempt settlement.
The Civil Justice Council has recently published its final report into ADR and civil justice, which sets out 24 recommendations. Many of these recommendations are aimed at introducing methods to encourage parties to settle their disputes by way of ADR rather than litigation, although the report specifically does not recommend compulsory mediation.
There are a number of institutions based in England and Wales which promote ADR or offer a platform by which various forms of ADR can be pursued.
The London Court of International Arbitration (LCIA) offers a set of procedural rules to govern arbitral proceedings and mediation, as well as model dispute resolution clauses for parties to incorporate into their contracts. The Chartered Institute of Arbitrators offers training and professional qualifications for arbitrators and mediators.
The Centre for Effective Dispute Resolution (CEDR), a not-for-profit organisation headquartered in London, encourages the use of ADR to resolve disputes, as well as offering a range of mediation services, including mediation training and advice on negotiation and conflict management.