Alternative Dispute Resolution – What are the options to avoid going to Court?

In any civil dispute between two parties, there are many ways in which both the claimant and the defendant can attempt to settle the dispute. There is in fact a legal obligation for both parties to continuously attempt to settle the claim without the need for a trial and this is expected right up to the day of court. Either directly if you are both acting as a litigant in person or through solicitors. Alternative Dispute Resolution (ADR) is the more common approach and will use an independent third party to act as a middle person to keep focus on both parties wishes and negotiate on behalf of each party to resolve the claim fairly but equally judicially. Throughout these proceedings, either party can withdraw or at least refuse any proposal which is presented to them.

It is important to understand that as soon as the claim is issued, costs will ensue for both the claimant and the defendant. This means that if you have a change of heart and wish to walk away from your claim, it is likely that the defendant will expect you to pay its costs. So it is always important that the negotiation of a settlement is at the forefront of your mind. It is best to seek a third party intervention before you throw in the towel.

The different forms of ADR are all voluntary and some are better suited than others depending on the nature of the issue. The most common is mediation and conciliation which essentially is the same thing apart from one difference, a mediator will not make suggestions but a conciliator can. The mediator will have received statements from both parties in advance which will enable them to consider the appropriate method to use in each scenario and brief them on the case. Telephone mediation is very useful because the mediator will speak with each party independently and then place them on hold and then speak with the other party until an agreement is reached or it becomes clear that it is not working. Note that if both parties have agreed to mediation, they must be willing to negotiate and compromise. It is very common for parties to agree and then when it comes to it, they put the shutters down and not budge on anything. This is a waste of time and can result in costs awarding against that party.

It is worth considering if an Arbitration Agreement had been discussed at the inception of the contract and will usually set out the way in which both parties will arbitrate through any disagreements. It is also one way in which ADR would not be voluntary and force one party to comply. For some bedtime reading, you can read through the Arbitration Act 1996.

A more formal type of ADR could be a mini trial which would use a third party to essentially play referee and work alongside two representatives from the parties and attempt a realistic settlement. The positive side to this would be that providing the representatives are not directly associated with the dispute they may see reason in a compromise. Note that if this course of action is considered, the representatives must be in a position of power and authority to make decisions and potentially settle. There would be added cost on this form of ADR but sometimes allows for a face to face litigation type settling to make each party feel that they have truly got its point across, albeit through a representative.

The most important thing to consider is if ADR is even appropriate or possible. It may be that the claimant will require there to be a specific ruling from the court as a matter of law or even it may be a debt which has no prospect of being disputed. In that scenario it may be that your solicitor will make a claim on your behalf and then push for what is called Summary Judgment so that a court can make a judgment without the need for a trial. This would then mean that you could make an application to enforce the debt and recover the monies owed or even start insolvency proceedings. Remember that the latter route may result in no monies being recovered if the defendant owes a substantial sum of money to a number of creditors. You may have wasted more money trying to recover a debt that has no means of being settled.

Lawdit Solicitors have a team who work daily on advising on civil litigation matters and navigate our clients through the different forms of ADR that may be better suited that pushing hard for your day in court which would be very costly and may not give you the result you wanted. Even if you just need to speak with someone on the phone before you decide on your next steps, we are happy to arrange a conference call at no cost to you. If you do decide to instruct us, our fee structure will be clearly set out at every stage of the process and in most instances we will provide a fixed fee and even cap fees so that you know where you stand.

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