Hamilton Pratt

Methods for Solving Problems

Alternative Dispute Resolution (ADR)

In the UK, negotiation is the most common way of resolving commercial disputes.  Most disputes which proceed to litigation are resolved before trial, usually through negotiation.  However, substantial costs often build up as the litigation process develops.  These costs can themselves exceed the amount being disputed.  There has been a recent shift towards ADR (which includes mediation and arbitration).  ADR enables parties to resolve disputes more quickly and, especially in the case of mediation, more cost effectively.  In the UK, insurance companies are now showing greater interest in mediation and since they often drive litigation, this is a positive step.

Mediation

Mediation is the most common form of ADR and simply involves settlement negotiations with the assistance of a neutral third party.  Typically, the negotiations in a mediation will be led by the business people involved rather than by lawyers.  The mediator has no power to decide on the merits of the case.  Indeed, mediators rarely express an opinion on the merits of either party's arguments.  The process is confidential and voluntary.  The parties are bound only if they reach a settlement.  There are various mediation bodies in the UK including mediation organised under the auspices of the British Franchise Association.  These organisations will provide mediators and assist with the administration of any specific mediation.  Under English rules for civil litigation, parties must consider ADR at the outset of a case and at various points throughout.  To encourage ADR, there are costs incentives.  Indeed the court will encourage parties to use ADR if it considers it appropriate.  The court may, for example, stay proceedings without the parties' consent to encourage the parties to explore whether ADR is suitable.

Arbitration

As an alternative to mediation but without going to court to litigate a dispute, the parties may agree to submit their dispute to arbitration.  Arbitration is a consensual process by which one or more arbitrators make a final and binding decision.  It is less formal than court proceedings and, unlike court proceedings, what happens in an arbitration is private.  Courts seldom intervene in arbitrations and the parties are free to choose their own rules of procedure in the conduct of their arbitration.

In contrast to a mediation, once the parties have agreed to submit a dispute to arbitration, a party cannot unilaterally withdraw from the arbitration.

Litigation

The English High Court has a Commercial Court which caters for the needs of businesses involved in large scale litigation.  Commercial Court judges are familiar with common practice in many industries, and they often take it into account when making their judgments.  They also manage cases pro-actively and with regard to the requirements of the particular situation.  As part of their emphasis on ADR they can provide an "early neutral evaluation" service, whereby parties to a dispute can obtain a judge's non-binding view of the merits of their case.  The service helps parties to avoid the high costs associated with litigation by promoting informed early settlement.

The English system of civil procedure has recently been streamlined  better to meet the needs of its modern day users.  Commercial parties can benefit from changes ranging from the use of "plain English" in the Court, to the emphasis on cost-effective litigation, and promoting settlement and ADR as alternatives to litigating.