Introduction Advantages Costs Misc Notes

ADR/REDOC

General/introductory notes

Adjudicative vs non-adjudicative

• Adjudicative = an (independent) 3^rd party imposes the decision.

  • Adjudicative processes:

  • Arbitration

  • Litigation

  • Expert Determination (ED)

  • Adjudication (used in construction industry)

  • Ombudsman (although some don’t make decisions)

  • Competition Authority

  • [[key ones to look for in MCQ options: arbitration, litigation, ED, adjudication]].

• Non-adjudicative = parties themselves make the decision, process aimed at enabling parties to reach an agreement settlement.

  • Non-adjudicative processes:

  • Negotiation

  • Mediation (the 3^rd party does not make the decision, but facilitates the parties in seeking a settlement)

  • Expert evaluation

  • Early Neutral Evaluation

  • Conciliation (eg in employment)

Advantages of ADR processes in general

Advantages

• Costs: (for mediation/negotiation, less so for arbitration).

• Parties have Control of process:

  • Control of costs (eg can choose 1 arbitrator)

  • Control of outcome in non-adjudicative processes (negotiation/mediation)

  • In arbitration, control over who the arbitrator is.

• Less stress

• Speed/time

  • Speed of getting to point of resolution

  • Once within process, eg in negotiation can impose own timetable, in control of how long it might take. Arbitrator, parties in control of timetable.

• Confidentiality/privacy (litigation is public)

• Maintaining business relations/long-term relationships, as ADR less confrontational.

• Maintain reputation (keep the dispute private)

• Flexibility:

  • Procedural flexibility

  • Greater range of remedies,

  • Flexibility in potential outcome, not black-and-white as in court.

• Avoid litigation risk (court is all or nothing)

• Variety of claims: can make submissions on any matters, not only restricted to points of law.

• Simpler procedures and strict rules of evidence do not apply

• Can have flexible solutions which go beyond the strict parameters of the original dispute (CF in court, jurisdiction only to make orders within confines of the issues raised by the statements of case).

• Arbitration agreements are enforceable internationally, New York Convention 1958, 140+ countries

Disadvantages

• ADR procedures agreed before a dispute arose may be inappropriate for resolving the actual dispute that arises.

• Where parties agree to ADR after dispute arises, might find it difficult to agree the details of the procedure to be followed (eg identity of an arbitrator/mediator, payment of fees, rules to govern the ADR etc).

• Arbitrator fees may be more expensive than litigation.

• A party with a strong case may have to abandon their actual rights if the ADR procedure is to achieve anything.

• Can be expensive and time-wasting if one party is not genuine in their participation.

• ADR sometimes unworkable if there are multiple parties.

• Enforcement of the amount determined is easier in litigation than ADR (other than arbitration).

• Certain remedies only a court can provide.

ADR and case management, courts encouraging ADR

• Courts, emphasis on parties considering ADR:

  • Pre-Action Protocols

  • Overriding Objective (justly and at proportionate cost)

  • Courts case management powers

  • Cost implications

  • Court mediation schemes (eg small claims track, mediation service).

• Jackson Costs Review (‘Review of Civil Litigation Costs Final Report’): ADR and mediation feature significantly, role in reducing costs of civil disputes. ADR is underused. Effective costs management to encourage ADR.

• Statements made by CA judges and ‘judicial speeches’

  • ADR must become an integral part of our litigation culture.

• Case management and ADR:

  • OO = courts deal with cases justly and at proportionate cost.

  • Active case management: court must encourage of the parties to use ADR procedure ‘if the court considers that appropriate’; and to facilitate use of such procedure (r1.4(2)(e)) [one element of active case management]

  • Part of OO of proportionality post-Jackson and CPR, achieve proportionality between costs of litigation and value of what is at stake; litigation should be last resort.

  • First opportunity for court to consider ADR at allocation stage. Court will consider whether parties have complied with ADR provisions of any relevant pre-action protocol.

• Courts encourage use of ADR by:

  • (a) holding parties to pre-dispute agreements to use ADR, by granting STAYS of proceedings commenced in breach of an ADR clause;

  • (b) making orders declaring the rights of the parties under ADR clauses, or providing machinery for implementing ADR clauses

  • (c) STAYING court proceedings, typically for a month, at the case management conference stage for the purpose of using ADR

  • (d) ensuring the parties have addressed, or will address, whether ADR might be useful as a means of resolving their dispute, typically at case management conferences;

  • (e) making orders that make it plain that the court expects serious consideration to be given to use of ADR.

    • Making an ‘Ungley Order’ (requires the parties to consider whether the dispute is suitable for mediation; and if they don’t consider it suitable, to justify that conclusion by filing a statement explaining how and why they reach that conclusion.

  • (f) imposing costs sanctions on parties who act unreasonably in relation to ADR (Halsey v Milton Keynes General NHS Trust).

• Other Egs of how court can facilitate use of ADR:

  • Source of info re ADR services

  • Verbally encouraging parties to consider ADR

  • Ordering a stay of whole/part of proceedings for ADR, either on application or of own initiative.

  • Can conduct an ENE (3.1(2)(m)), with the aim of helping the parties settle their dispute.

  • Making a costs order, or advising that such an order might be made re unreasonable failure to adequately consider ADR.

  • Referring a small claim to the Small Claims Mediation Service. If the mediation service results in settlement, the proceedings will be stayed.

  • CPR 3.1(2): court’s general case management powers, can order that a party (/his legal rep) by required to attend court; such an order can be made with a view to making an ADR...

Buy the full version of these notes or essay plans and more in our Alternative Dispute Resolution Notes.