2nd December 2020 -
Our commercial litigation team explores how alternative dispute resolution can be used to settle business disputes while Covid-19 continues to impact the courts
It is no secret that the courts are struggling to clear the backlog of commercial cases which have built up as a result of the coronavirus, or that this backlog is continuing to grow.
This presents a problem for businesses who are embroiled in a commercial dispute and who need support in order to find a way forward soon, not in several months’ time when the courts will hopefully be in a position to start getting back up to speed.
‘Fortunately, there are alternatives to the instigation of court proceedings which can be just as effective in bringing a dispute to an end and which may be quicker, cheaper and more commercially sensible to pursue,’ says Richard Shears, a commercial dispute resolution solicitor and founder of Shears Law.
These alternatives, referred to formally as alternative dispute resolution methods (or ADR for short) include mediation, expert determination, early neutral evaluation, judicial appraisal and lawyer supported negotiation. He explores the options.
With mediation, you and your opponent agree to appoint an independent specialist who has been trained to help commercial parties resolve their differences. The mediator will work with you to try to find an acceptable way forward and to make suggestions for compromise that you may not have previously considered.
The process is consensual and will only lead to a binding settlement where terms for resolution are agreed. If the process fails, you are free to issue court proceedings in the usual way or to explore another approach if you wish to do so.
Mediation has a high success rate and, even where it fails, it can be useful in helping to narrow down the points in dispute so that you can concentrate on the issues that matter rather than those which are not deal-breakers.
Early neutral evaluation
With this approach, you and your opponent agree to submit your dispute to an impartial evaluator who will give you a non-binding opinion on who they think is likely to emerge victorious if the matter goes to court. The evaluator can be anyone you choose, but he or she will usually be a judge who specialises in the sort of dispute that has arisen.
Early neutral evaluation is growing in popularity and is being increasingly endorsed by the courts, particularly in complex commercial property disputes and contract claims.
Under this method, you and your opponent agree to appoint an independent specialist with acknowledged expertise in a particular area and who you trust to make a binding determination of who is in the right and who is in the wrong.
This type of alternative dispute resolution tends to be most suited to disputes in which the facts of the case are agreed and where everything turns on a single technical point, such as whether a clause in a contract can be invoked or whether an agreed specification has been met.
This route involves you and your opponent submitting your dispute to a former judge or senior barrister, usually during the early stages of a case, in order for them to give you a preliminary view on where they think you stand and on the relative strengths and weaknesses of your position. You can then use their view to help you decide what to do next or to set the parameters for subsequent settlement discussions.
Lawyer supported negotiation
This is the quickest and easiest to access as a method of alternative dispute resolution. As the name suggests, it involves you and your opponent working with your lawyers to try to come up with commercially sensible solutions for how your dispute might be resolved or, at the very least, to narrow down the issues on which you disagree.
Lawyer supported negotiation can be an effective way of bringing a commercial dispute to an end, particularly where lawyers are instructed at an early stage.
Advantages of alternative dispute resolution
As well as keeping your dispute out of the court system, alternative dispute resolution offers a number of advantages over traditional litigation which go far beyond speed and price.
It is also worth bearing in mind that, by engaging in alternative dispute resolution or at least giving serious consideration to its use, you will be helping to protect your position on costs should the matter eventually end up in court. This is because, under the rules that apply to legal proceedings in England and Wales, warring commercial parties who fail to give proper thought to alternative dispute resolution (or who unreasonably refuse to engage in an ADR process) can be punished by the courts via an adverse costs order.
Disadvantages of alternative dispute resolution
Like most organisations, the court system has been badly hit by the Covid-19 pandemic and is still trying to find a way to adjust to what is a constantly changing and challenging situation. In view of this, while disputes requiring court determination should continue to be issued in the normal way, for those that might just as effectively be dealt with via some other means, it is now even more imperative that the use of alternative dispute resolution be considered and indeed actively attempted where there is a real chance it might help.
For more information on how our litigation team can assist you with the resolution of a commercial dispute, please contact Richard Shears on 0800 020 9495 or email@example.com.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.Back to News & Views