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Alternative Dispute Resolution - I'll see you in mediation!

View profile for Perdeep Grewal
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While Brexit continues to make the headlines, there have been major developments in the field of alternative dispute resolution, also known as ADR. The Civil Justice Council published its ADR and Civil Justice Final Report which outlined the ways ADR is currently used within the civil justice system. 

What is ADR? 

ADR is used as a method to resolve construction and commercial disputes instead of commencing formal legal proceedings through litigation. There are different types of ADR available. These include round table meetings, where each party meets to explore the possibility of settlement, and negotiations, where parties are encouraged to have dialogue before and during any legal proceedings.

A well-known form of ADR is mediation. It has now become widely accepted that mediation is an effective means of resolving commercial disputes. Mediation is a voluntary, flexible and confidential process where a neutral third party works to facilitate parties to narrow issues in dispute and work towards a settlement. 

What are the advantages of using ADR?

The obvious advantages of using ADR are its speed and costs. Commencing legal proceedings and getting to trial can take between 12 to 18 months, and the costs reflect that. In contrast, ADR can save businesses from wasted management time, lost productivity, damaged relationships and incurring substantial legal fees. 

I have assisted clients on multiple mediations which, from experience, showed mediation to be a highly effective mechanism in unlocking even the most complex and contentious disputes. The majority of mediations settle on the day itself, with a few settling shortly thereafter. 

Conclusions in the Final Report 

Awareness - The Civil Justice Report pointed out that there is a “lack of public awareness and understanding of the operation of the legal system as a whole” and that many still do not know that ADR exists as a useful option to resolves commercial disputes. 

Litigants, it says, should be encouraged towards ADR by the courts. Currently court documents and the Civil Procedure Rules contain significant prompts towards ADR. For instance, the courts request parties to consider having a one month stay to consider ADR. However, there is still a lack of education to advise, promote and educate businesses on the benefits of ADR. 

Encouragement - Parties must be advised that they will face cost sanctions if they unreasonably refuse to participate in ADR. I always encourage ADR at the outset of a dispute, and when proceedings are issued, further encouragement should be provided. 

The report recognises the present sanctions have “been too generous to those who ignore ADR.” The courts, at present, deal with cost sanctions at judgment level only. The report recommends there is a need for “something happening earlier”, such as the courts need to intervene during the case management process. 

What next? 

ADR can only grow if more parties know about it and the numerous benefits it has to encourage a resolution. Whilst the report does not recommend compulsory ADR, I believe substantial changes are likely to follow. Parties should continue to consider ADR and avoid the risk of any cost sanctions. 

If you have any questions about Alternative Dispute Resolution, or if you are a business involved in ongoing litigation, please do not hesitate to contact our Dispute Resolution team. I am based in our Chelmsford office and can be contacted on 01245 453804 or perdeep.grewal@birkettlong.co.uk

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