Methods of alternative dispute resolution

Stewart Burrows, partner and head of dispute resolution and litigation at SAS Daniels discusses various alternative dispute resolution (ADR) methods to prevent a trial going to court.

Although ADR is not currently deemed as mandatory, the court encourages parties to a dispute to attempt settlement by ADR, the advantage being it will save both time and money.

There are various types of ADR available, the most common being:

Joint settlement meeting
The parties can engage in a joint meeting, often informal, to discuss the issues pertinent to the dispute, either before or after a court claim has been issued. The discussions will be without prejudice to encourage open conversation of settlement.

Mediation
A more formal process, and in my experience the most often utilised, where an independent, impartial, third party (mediator) is appointed to assist the parties to try to reach amicable settlement.

Unlike a judge, the mediator cannot impose any decision upon the parties but is there to facilitate open and honest discussion with the goal of them achieving a mutually acceptable resolution. This process is without prejudice and confidential.

Mediation most often occurs once litigation has started, to try to curb costs, time, and stress, but it can also be used before litigation has commenced. It is often very successful in resolving a dispute quickly, if not on the day, then within the following days or weeks.

Adjudication
A common method of resolving construction disputes quickly, fairly, and cost effectively. The whole process can last as little as 28 days. The RICS adjudicator is expert in their field which allows for a professional to resolve the dispute, by considering evidence submitted by each party. The decision is binding but can be overturned subsequently by a court if appropriate. One benefit of adjudication is assisting cash flow during a construction project.

Arbitration

Based on an agreement by the parties to have a dispute settled in this way. An independent arbitrator, or panel of arbitrators, is appointed to determine the dispute, after assessing the evidence of the parties. It is a more formal process, like court, but is private and confidential.

The arbitrator(s) will usually be an expert in the subject of the dispute and can be barristers.
The decision of the arbitrator(s) is final and legally binding, there being no right to overturn the award via court. A party can, however, ask the court to enforce the arbitration award if the other party ignores it. Arbitration can be quicker and more cost effective than court.

Expert determination

Like arbitration, this process is private, where an independent technical expert is appointed by the parties to consider the issues, reviewing evidence submitted by the parties, to reach a decision on the dispute. The decision is generally binding, unless the parties agree otherwise. Expert determination, when used appropriately, can be a useful tool to bring a swift, and more economical, resolution to a dispute.

Court proceedings are lengthy, costly, and can be stressful for all parties. One of the main benefits of ADR is that it is usually a much more cost-effective way to achieve resolution, since while there are costs involved, they can be significantly less than the legal costs associated with taking a dispute to court and can be less formal.

Given its encouragement by the court, and the possible costs penalties that court can impose on a party that unreasonably refuses to engage in ADR, settlement by any ADR method is recommended.

If you wish to discuss more on ADR and how it can help your dispute, contact Stewart Burrows on 01244 305 953 or stewart.burrows@sasdaniels.co.uk