Other forms of ADR

As traditional litigation becomes more expensive and consequently less accessible to all but those with very deep pockets, the law is encouraging alternative dispute resolution.  Here is a brief outline of the methods that you should think about.

(a) Negotiations between the parties

The traditional approach to resolving disputes is negotiations directly between the parties or their legal representatives.  This should always be considered before anything else.  If relations between the parties and/or their lawyers are good, this can often be done without the intervention of a neutral such as a mediator.  It is when relations are poor or have broken down completely that the availability of a mediator to whom the parties can express their views in private without fear of upsetting the opposing party becomes essential.  Even when the parties are at loggerheads, sensible lawyers can often have fruitful discussions about how their respective clients might resolve their differences without recourse to more expensive and time-consuming dispute resolution mechanisms.

(b) Arbitration

Arbitration comes in many forms from full-blown private litigation to relatively simple forms of determination with limited evidence and submissions.  A full litigation-style arbitration is extremely expensive and it is usually used because the parties want their dispute resolved in private rather than in the glare of publicity which often accompanies high profile litigation.  Its other principal advantages are that an arbitration can address issues which arise across multiple jurisdictions more easily than this can be done in litigation and that an arbitrator’s award is generally difficult to challenge with the result that it has a degree of finality that a trial before a judge does not.  It is, however, generally neither quick nor cheap.

There are many well-known international arbitration schemes and providers.  Here is a selection:

The International Chamber of Commerce (ICC)

The London Court of International Arbitration

The Singapore International Arbitration Centre

The Chartered Institute of Arbitrators

The London Maritime Arbitrators Association

There are many others.  All have their own particular qualities.  If you have a commercial dispute you want to arbitrate it is likely that you or your lawyer will know which you think best suited to your particular circumstances.

(c) Expert determination and adjudication

Expert determination and adjudication are very similar processes.  They are methods of dispute resolution which involve a quick investigation, often entirely in writing, and a determination by an expert or an adjudicator as to the outcome.  Generally, expert determination is used where the dispute requires particular expertise, such as that of a surveyor, a planning consultant or a specialist in a particular field of technology such as agile systems development.  The expert is then tasked to decide the dispute using not just the parties’ evidence and submissions but his or her own expert knowledge.

Adjudication is very similar although it is sometimes regarded as being more a mechanism for resolving disputes which primarily involve legal issues.  There is a well-esablished construction industry Adjudication scheme which has statutory force under the mandatory provisions of the Housing Grants, Construction and Regeneration Act 1996.  Under that Act the scheme applies automatically to any construction contract.  The  Technology and Construction Court oversees and enforces adjudicators’ decisions under that statutory scheme.  A brief and informative guide to it can be found on the Designing Buildings Wiki website.

The Society for Computers and Law (SCL) has recently introduced a voluntary Adjudication Scheme for technology disputes covering a wide range of information technology related issues.  The SCL scheme is outlined on its website here.

Expert determination and adjudication have many attractions.  They are relatively quick and can be completed within a matter of weeks from the inception of the dispute.  They are widely used in contractual arrangements, particularly where the parties envisage an on-going relationship under which relatively minor disputes may arise which require resolution from time to time.  Unless the parties have made such a contractual arrangement, they will have to agree to submit their dispute to expert determination or adjudication after it has arisen.  That may not always be easy to achieve. 

(d) Early Neutral Evaluation

Early Neutral Evaluation (ENE) is intended to provide the parties to a dispute with assistance in reaching a settlement.  The parties ask an independent evaluator to carry out a preliminary assessment of their respective cases and reach a provisional conclusion as to the outcome.  The ENE may cover the whole dispute or be restricted to a particularly difficult core issue in the dispute, such as the meaning of a critical contractual or testamentary provision.  ENE is usually carried out as a confidential process without prejudice to the final determination of the dispute but the parties may opt to treat it as final and binding if not challenged within a specific time.  It is essentially a mini-trial of the issues to reach a provisional conclusion.  The idea is that this will help the parties move forward by unlocking an otherwise intractable area of dispute.

The central problem with ENE is that it tends to entrench the “winner” in his or her position and undermine the “loser” in further negotiations.  It therefore needs to be used with caution.  There may be cases in which the parties cannot agree on how an individual issue should be resolved but where they would be able to reach agreement if that issue were determined.  For example, if there is a dispute about whether particular services to be provided under a system development contract are included in the agreed price or to be paid for under an escalation clause, it may be that resolving that point will allow the parties to move on.  But it is worth noting that problems of this kind may be better resolved by adjudication or expert determination – where the issue is put before a decision maker who gives the parties a final and binding (or provisionally binding) decision.

ENE is usually used relatively early in a dispute where the parties are trying to establish “the lie of the land”.  The courts now make provision for it (Civil Procedure Rules Part 3.1(2)(m) and the Court Guides have procedures for it (e.g. Chancery Guide 18.7-18.15) but practitioners have widely differing views of its value and utility.  These rules have been held by the Court of Appeal to allow the Court to direct an ENE even where the parties do not agree: Lomax v Lomax [2019] EWCA Civ 1467, [2019] 1 WLR 6527.

Here are a couple of links to competing views of the value of ENE if you want to find out more:

From a firm of commercial lawyers

From the Centre for Dispute Resolution (CEDR) a mediation provider