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Summary SGS 11 Civil Litigation LPC (Arbitration and Alternative Dispute Resoltuion) Lecture, SGS and Solution Notes and Exam Structure (High Distinction)$4.56
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SGS 11 – ADR: Arbitration and Mediation
ADR
Types of ADR :
- Not arbitration as it is seen to be ‘quasi-judicial’ and is a distinct concept.
Why use ADR?
CPR 1.4(e)- encouraging the parties to use an alternative dispute resolution procedure if the court considers it appropriate and
facilitating the use of such procedure.
1. The above should be considered at the pre-action protocol stage, allocation and the case management conference before
directions are finalised for the case.
- The court may require parties to submit costs budgets in respect of future work for the claim CPR 3.13 and must take form as
precedent H which includes settlement negotiations (Part 36 offers), drafting a settlement agreement or Tomlin order and advice to
the client on settlement and proposed mediation as an anticipated future cost.
- Court can then make a costs management order ‘CMO’ CPR 3.15.
2. Stays imposed by the court or granted at the request of the parties
- The parties can have the proceedings stayed while they try to settle CPR 26.4 made in the DQ.
- If all parties and the court agree (although the court can grant it alone 26.4(2A)), it is usual for a one month stay to be granted but
can be extended by the court CPR26PD3.1 but usually not longer than 4 weeks.
- Stay can be lifted if it is not getting anywhere 26PD3.3.
- If settlement is reached, the claimant must notify the court CPR 26.4(4) and 26PD3.4.
3. Possible cost sanctions
- Jackson Reforms means that ADR is a key tool which facilitates a proportionate and cost-effective response to legal disputes.
Consequences of failure to consider ADR
- At the end of the claim when the court decides discretionary costs, they will consider the conduct of the parties CPR 44.2(4) and
conduct includes 44.2(5)
Conduct before and during proceedings
Whether it was reasonable for a party to contest a certain allegation
The manner in which the case has been defended
Whether a claimant has succeeded in all or part of its claim has exaggerated its claim.
Whether it was reasonable for the party to refuse ADR.
TYPES OF ADR
Method of ADR Binding? Description
Early neutral evaluation No - Often a QC or retired judge will give a non-binding opinion of who
will win the case and each party’s strengths
- Confidential
- Can potentially break deadlocks
Expert determination Yes - Independent expert appointed by the parties
- Provides a binding decision
- Rights of appeal are limited
Mediation No - Confidential proceeds and voluntary
- Neutral 3rd party facilitated negotiation
Negotiation - The parties talk without 3rd party involvement
Med-arb Yes - Parties agree to mediation process but if mediation does not
resolve the issue, they automatically move to arbitration
- Binding decision
Expert appraisal No - Independent expert is appointed by the parties
- Expert will be agreed by the parties or appointed by nominees
- Expert provides a non-binding assessment of the case
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, SGS 11 – ADR: Arbitration and Mediation
Mediation
Appropriate when: Not appropriate when:
- Parties are not legally obliged. But they can be contractually - your client requires injunctive relief
obliged if they agreed to solve their differences in this - either party does not have legal capacity to enter into an
manner. agreement
- Any time but usually at the beginning before parties are - either party’s status or constitutional rights are affected
entrenched in their defences - a precedent is require
- Any time but usually one month stay after CMC to allow - either party is not genuinely committed to the mediation
negotiations for settlement process
- When you have time, mediation does not extend limitation
periods.
- If there is a mediation contract clause
Advantages Disadvantages
- Can be quick and cheap as most will only require around 2 Client misconceptions
days. - Could think that settlement is a sign of weakness which the
- Neutral third party court will not like
- Not a binding decision - May want their day in court (expensive route)
- Confidential - May feel that as negotiations didn’t work then mediation
- Objective opinion of the mediator won’t either but mediators are very skilled
- Costs saved if you don’t go to court - Some feel mediators are just messengers but they are in fact
- Party autonomy as you can decide where it takes place very skilled
- Maintains commercial and business relationships - Parties may want more disclosure first
- Parties can be creative with their solutions which goes beyond - May feel it is a waste of money but court is more expensive
what the court can offer - May feel that it delays litigation which is true but it can be
done quickly and effectively (cheaper too)
Role of the Mediator
- Independent third party
- Can focus the parties’ minds on the problem rather than the dispute and reach a commercial settlement
- Enable parties to see the other side’s case objectively and realistically
- Ensure the parties have considered alternatives to settlement
- Keep the momentum in negotiations
- Avoid confrontation by of negotiation by facilitating communication
Mediation Agreement
- Once the mediator has been identified, it is wise to enter into a contract with the mediator.
- This ensures the process is carried out formally and appropriately, avoid misunderstandings over the process, may be of assistance
to the court, may be required by the mediator for insurance purposes and some mediators will exclude liability for breach of
contract or negligence.
Confidentiality and privilege
- Implied obligation on the mediator to maintain the confidentiality of the proceedings between himself and third parties.
- Parties must also consider whether the information they give to the mediator should be disclosed to the other parties.
- Without prejudice privilege applies to the mediation itself.
- Discussions from mediation are not discussable in future proceedings. It is the substance (genuine attempts) of the negotiation not
the label attached to it which gives without prejudice privilege.
- Mediator cannot waive privilege and cannot rely on it if it has been waived. Usual for agreement to stop mediator giving evidence.
Role of lawyers
- The client should play the lead role as it gives control of solving the problem to whose problem it is.
- Solicitors advise if and when mediation should be tried. He will also collate documents and case summaries, mediation statements
and deal with administrative aspects such as choosing a venue with the other side.
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, SGS 11 – ADR: Arbitration and Mediation
- Solicitor should play a creative role, analyse and advise on legal alternatives if the case does not settle such as trial and costs.
- Attending shows good conduct as you have complied with Pre Action Protocol (good for cost reasons)
Mediation Process
1. Mediator will explain the role and how the mediation will take place to both parties in the joint session;
2. A plenary session will ensue where the parties gather to meet each other and discuss their grievances;
3. The parties will then go to their separate rooms and the mediator goes back and forth to broker a compromise (shuttle
diplomacy)
4. As the parties converge on the middle ground, the Mediator will invite both parties to meet and directly agree a solution.
Attendance
Ideally a representative from each party who has authority to settle should be present
Introduction and joint session
Begin with a joint session and the mediator will address the objective of mediation, his/her neutral role in the process,
procedural rules and how parties can make representations, confidentiality and privilege, status of any agreement reached ie
conditional on board approval etc.
Claryfying the issue(s)
The mediator should clarify the issue(s) before each party has their turn to present their case. The address should be aimed
at convincing the other party and not the mediator.
The other side cannot interrupt and the lawyer or representative will speak. After, the mediator will allow questions for
clarification and not cross-examination purposes.
A co-mediator can be appointed to provide more specialist knowledge
Breakout sessions
Frequently the parties will have the opportunity to chat amongst themselves in private. Needs to be clear whether or not the
discussions can be disclosed to the other side.
Gives the parties chance to consider settlement terms and it is not the mediators role to think of these.
Lawyer can help the client identify settlement opportunities and assist in risk assessment, best alternative to a negotiated
agreement and worst alternative to a negotiated agreement (BATNA and WATNA).
Trying to achieve settlement
Both parties could submit their proposals at the same time so he/she can use the information to submit proposals to each side.
The mediator can shuttle between the two parties carrying proposals and counter proposals for settlement attempting to
narrow the issues in dispute.
Negotiation can be conducted through the client, representative or lawyer.
Some mediators may “reality test” and challenge each parties assumptions or refer to case law or precedent.
Mediator can be asked to provide the parties with settlement terms/non-binding recommendations for settlement that they
think are fit but not many will as they feel it compromises their independence.
A further session can be taken after all of this to continue negotiation or finalise settlement.
Outcomes of the mediation
Settlement of all issues or of some (could be a provision for dealing with remaining issues)
Termination of mediation to pursue another method
Mediator can terminate
- Complete resolution- if all issues are resolved, a settlement agreement will be drafted to mirror the agreed terms. Should be
executed before leaving the mediation but may be subject to approval of the board of insurers.
- Partial settlement- settlement agreement will be drafted to reflect what has been partly settled. They can agree to resume
mediation at a later date or pursue another form of ADR or accept that it will only be resolved by the court.
After the mediation
Enforcement of the settlement agreement
1. If proceedings have already been issued, the SA can be incorporated into a consent order and enforced as a court order.
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