ADR Flashcards
(35 cards)
Negotiation
A communication process between parties that is intended to reach a
compromise or agreement to the satisfaction of both parties.
Mediation
A confidential process intended to facilitate resolution of disputes through the medium of an impartial third party – mediator. Generally, each party will be present in the same location but in different rooms. The mediator will move between rooms delivering settlement offers and guiding each party to reflect on those offers and alternatives. The mediator has no authority to make any decision which is binding on the parties. In the event that mediation does not end in an agreed resolution, content of the mediation will remain confidential, will not be made known to the court.
Arbitration
Dispute is resolved by an impartial adjudicator whose
decision the parties to the dispute have agreed will be final and binding. Whether to arbitrate or not arises at two key stages:
(a) When negotiating a contract the parties may decide to include an arbitration clause in
their agreement to cover disputes that arise in the future; or
(b) When a dispute has arisen, the parties can choose to deal with it by way of arbitration.
Advantages of arbitration
Privacy, easier enforcement in certain jurisdictions, the ability to choose a specialist to determine the dispute and the additional flexibility of arbitration which can be adapted to suit the needs of the parties and the dispute.
Med-arb
In mediation/arbitration parties agree that, initially, they will try to resolve by mediation. In the event that this does not result in satisfactory resolution of the matter, will move on to an arbitration pursuant to which a binding determination will be made.
Early neutral evaluation / expert appraisal / expert evaluation
Independent party will provide a non-binding assessment of the matter(s) referred to
it. Independent party could be a lawyer, but alternatively could be an expert in a relevant matter – such as a medical or engineering expert.
Expert determination
An independent expert on the subject matter is appointed
by the parties to determine the dispute. Procedure is determined by the contract between the parties.
Conciliation
An independent neutral third party in helping parties to resolve their dispute. Conciliation often forms part of a statutory scheme or other regulatory scheme, and that
scheme might provide who the conciliator should be, and the process involved.
Advantages of ADR
The court expects the parties to explore ADR.
Preserves or creates a better relationship between the parties.
Less expensive.
Saves time.
Greater privacy / confidentiality.
Less disruption to clients.
Outcomes that reflect risks.
Greater control over the process.
Greater involvement of the parties themselves.
Factors for earlier ADR
Cost saving.
Better relationships and information.
Factors for later ADR
Better understanding of each other’s case.
Better understanding of the evidence.
Avoidance of costs of early ADR if dispute is not genuine and will not be pursued.
ADR should at least be considered…
Pre-action protocols and practice direction require parties to consider ADR.
Guidance accompanying Precedent H requires inclusion of elements relating to negotiations & settlement.
Directions Questionnaires require legal reps to confirm they have explained the need to try and settle.
At a case management conference, court is likely to want to know what steps parties have taken to explore ADR.
Court and ADR
Court can provide info about ADR and encourage parties to consider and engage in it but cannot compel a party.
Costs and ADR
Court rewards positive
ADR behaviour and punishes poor behaviour in costs. where the successful party in the litigation would normally be entitled to its costs but that party has refused to engage in ADR the court will consider whether that refusal was reasonable, and if not, the court might impose a costs penalty.
Court will look at…
The nature of the dispute – how suitable it is for ADR;
The merits of the case – a refusal to engage in ADR may be more justifiable if the
party justifiably believes it to be very strong.
The extent to which other settlement methods have been attempted.
Whether the costs of ADR would be disproportionately high.
Whether any delay in setting up and attending the ADR would have been prejudicial
– particularly if it is very close to trial; and
Whether ADR had a reasonable prospect of success – this by no means requires the
alleging of unreasonable behaviour to show that it would have succeeded.
Upon receipt of an offer to engage in ADR, a party should…
(a)Consider with its legal advisors the merits of that offer;
(b)Respond promptly, in writing, setting out reasons for its decision, and noting the
principles above;
(c) If it does not wish to engage in ADR, explain in what different circumstances it would agree to ADR. It would very rarely be appropriate to indicate that ADR will at no stage be appropriate;
(d)Make that letter ‘open’ or ‘without prejudice save as to costs’; and
(e)Consider making a separate note of any reasons for refusal that it is unwilling to
express to the opponent at that time, in a form which can be later shown to the court if
necessary.
The court can…
-order a stay in order that the parties can explore ADR;
-direct the parties to consider ADR and require an explanation of the parties’ thinking in that regard.
-reinforce the direction mentioned immediately above (any party not engaging in
any such means proposed by another must serve a witness statement giving reasons within 21 days of that proposal).
Mediation advantages
Quick and cheap.
Subject to ‘without prejudice’ privilege.
Tailored to client’s needs and interests rather than legal rights alone.
Client can get more involved, have a greater say.
Mediation disadvantages
An offer to mediate may be seen as a sign of
weakness.
Involves time and expense
Mediation contract clauses
Some commercial contracts will include mediation clauses which require the
parties to engage in mediation in relation to any dispute arising out of the contract.
Mediation - small claims cases
All claims for less than £10,000 which would normally be allocated to the small claims
track will be referred to a free and confidential small claims
mediation service operated by His Majesty’s Courts & Tribunals Service (HMCTS) if all parties indicate on the directions questionnaire that they agree to mediation.
Role of mediator
(a) Focus the parties’ minds on the problem rather than the dispute and reach a
commercial settlement.
(b) Enable parties to see the other side’s case objectively and realistically.
(c) Ensure that the parties have considered the alternatives to settlement.
(d) Keep the momentum in negotiations, particularly perhaps by dissipating emotional elements and focusing on the issues.
(e) Avoid the typical confrontational style of negotiating by facilitating communication.
Mediation agreement
They will nearly always
be required to enter into a written contract with the mediator: ensures process carried out in professional manner, assists in avoiding misunderstandings, of assistance to court, needed by mediator for insurance purposes, to allow mediators to exclude liability for breach of contract or negligence in case of parties blaming mediator if mediation is unsuccessful.
it is common practice for mediation agreements to state that the mediator cannot be called to give evidence.
Preparing for mediation
Mediation bundle, position statements(indicating strength of cases), possibly a separate note for the mediator.
