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General ADR Principles
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General ADR principles (Session 1 Civil – Topic 1)Key concepts:
• the main adjudicative and non-adjudicative ADR processes and the main characteristics of each
process
• which ADR process would be most appropriate bearing in mind the client’s needs and objectives
• when ADR should be used (what factors relevant to the timing of ADR should a lawyer keep in mind)
• the roles and responsibilities of parties and lawyers in ADR.
Focus = Main factors to consider when deciding whether ADR is appropriate and matters to think about when
deciding on the best time to attempt ADR
ADR = a term use to describe processes that can be used to resolve disputes out of court
• Private rather than public dispute resolution processes
• Parties can pick and choose btw ADR and litigation in order to resolve their dispute as quickly, effectively
and cheaply as possible
• Involves a number of different processes – adjudicative and non-adjudicative
Non-adjudicative Adjudicative
• Negotiations - conducted btw parties themselves/btw • Expert determination à 1/more neutral
their lawyers 3P are selected by the parties to reach a
• Conciliation and mediation à Negotiations facilitated determination or decision in respect of
by a neutral 3P the matters in dispute and this decision
• Early neutral evaluation – negotiations informed/shaped is binding on the parties
by a non-binding evaluation by a neutral 3P of 1/more of • Arbitration
the matters in dispute
Role of lawyers and parties in ADR
Parties are under a duty to help the court further the overriding objective and consider the use of ADR
à PAPs place a positive obligation on the parties to consider ADR
à their lawyers are also under a positive duty to act w/ reasonable care and skill + in the best interests of their
clients
OO = requires the court to deal with a case justly and at proportionate cost (includes saving expense
etc.)
The court MUST further the OO by:
1) actively managing cases +
2) encouraging parties to use ADR and helping them settle whole/part of the case
Lawyers must:
• give advice about benefits/disadvantages of ADR and assessing whether and if so, which ADR process
should be used in any particular case (adjudicative/non), if it would be of benefit to the client
• ensure client understands advice given
• advice about potential sanctions that could be imposed by the court if a party unreasonably refuses to
consider ADR/ obligations under OO in relation to ADR
• if ADR selected, get clear instructions on the form of ADR to be used, objectives to be used etc.
• act within client’s instructions at all times and care must be taken to ensure that he does not inadvertently
bind a client to a settlement which he/she has no authority to make
• if ADR NOT selected, ensure objective reasons identified and sufficient evidence of those reasons
retained
• act in client’s best interest during any ADR process
o includes representing the client in the process and NOT misleading a mediator/any neutral 3P or
the arbitration tribunal
• advice on the merits of any proposed settlement proposals and draft and ensure the client understands +
consents to any settlement agreement reached during the process
• advising clients on pre-action obligations in relation to ADR
• advise as to funding and costs wrt to ADR
• if appropriate, assist in selection of independent 3P to conduct ADR process
Potential sanctions
Lawyers who pursue litigation w/o proper consideration of and advice to their clients about ADR options may
face:
• A wasted costs order
• Complaint to their professional body
• A professional negligence action
Even if lawyers escape personal liability, a client may be exposed to sanctions in the form of costs liability IF
appropriate advice has not been given about ADR so that a client fails to
• consider it or
• unreasonably rejects it out of hand
,Authority of lawyers to settle
When lawyers act on behalf of clients in a non-adjudicative process, v important to act within authority to settle
on the basis of sufficiently clear client instructions.
• Lawyer (negotiating on behalf) should only reach final agreement if so authorized by client.
• When negotiating as an agent, lawyers normally have apparently authority to settle on behalf of client -
agreements reached are treated by the other side as binding.
• Settlement may be set aside if lawyer was acting out of authority (but doubtful that it’s still good law)
• Specify at the start of negotiation - what agreements should be expressly subject to client approval if client is
not present. Check w client if you have doubts.
Where ADR is appropriate, which process is best?
Key things = client’s needs and objectives
Assess such matters as whether:
1) Client has an underlying need or concern which could be met by agreeing terms the court could not order,
such as a reference in agreed terms, an apology, the renegotiation of a contract.
à If so, mediation or negotiation may be more appropriate than an adjudicative ADR process.
2) Where there is a need to preserve a personal/business relationship
à If so, a non adjudicative process is more likely to enable this to be achieved than an adjudicative process where
a determination is made which is likely to result in one party winning and one party losing.
3) If there is a need for quick resolution/to keep costs to absolute minimum
à negotiation would be best
4) The parties want to agree the solution themselves or whether they would prefer a third party to reach a
decision for them.
5) issues in the case
If the parties are unlikely to settle until an expert’s view is sought then Early Neutral Evaluation or Expert
Determination may be more appropriate, although which process is used may well depend on whether the
parties want to reach their own decision based on an expert’s evaluation or recommendation or want a binding
determination.
If the matter is complex or of high value à arbitration may be more appropriate.
6) The extent to which the parties are entrenched in their position.
If they have attempted to settle the matters in dispute themselves by making offers or attempting negotiation, then
it is probably time to try to reach a solution with the assistance of a neutral third party.
7) The extent to which the parties may wish to have a range of decision-makers or want a decision that can be
easily enforced around the world.
In such a case à arbitration may be best as the parties can appoint a tribunal of three arbitrators which
complement each other in terms of expertise and experience and their award can be enforced internationally in
countries which are signatories to the New York Convention 1958.
, When would litigation be more appropriate than ADR?
Whilst ADR may save a client both time and $$$ and enable the matter to be resolved more speedily, it may not
always be appropriate
e.g., in these circumstances
Where a court judgment e.g., case relates to interpretation of a clause in a standard form contract
/precedent is necessary for 1) where the issue = whether the meaning of a clause in the standard T&Cs for a
a particular group of people business insurance policy is an issue
2)whether the coronavirus constitutes a force majeure which entitles the insured to an
indemnity for their loss of profits caused by the closure of their business due to the
virus
BUT there needs to be a balance of interests btw clients’ interests to settle through
ADR or going through litigation for legal developments – law cannot develop if
everyone uses ADR
Importance of court order Some circs require court order (declaration of legal rights/technical order)
e.g.,
Amendment of the register of a company under CA 2006
- to remove/add the name of an individual when shares have been transferred
from 1 person to another
(requiring court order to be done)
Where urgent injunctive ADR may not be appropriate in these circs – can ONLY be made by courts!
relief from the court may be
necessary to preserve a ADR can still be used AFTER courts made the appropriate orders
party’s position
In disputed claims where a e.g., an undisputed debt claim for the price of goods sold to a party. If there really is
party is simply delaying no dispute to the claim, but the other side fail to make payment, issuing proceedings
payment and seeking an order for summary judgment may be the most effective and so
therefore, the quickest, cheapest and best option.
Matters needing litigation e.g., matters affecting the general public
concern issues which need - planning
a public determination - environment issue
- some types of fraud cases
Evidential rules Some cases require disclosure/exchange of W/S
When 1 party is reluctant in producing relevant info, courts may prepare to order a
specific disclosure to support use of ADR
à need for evidence may be relevant to timing of ADR
Strength of case C with strong case may NOT want ADR in fear of showing weakness/necessitate the
making of some concessions
In this case, most appropriate course may be to apply summary judgment
Complexity of case Complex facts – can be considered in court through XX
BUT ADR can minimise certain risks in taking these types of cases to court
If costs are disproportionate = not necessary to litigate simply bc area of law complex
ADR processed can still be structured to involve a few parties (e.g., mediation)
High levels of animosity If BOTH parties are super hostile, ADR might not work
But can still get a skilled mediator or a robust neutral evaluation by an expert to make
decision
Quasi-criminal allegations If XX is key to the case – can’t use ADR
Criminal allegations such as fraud, libel – cmi non-adjudicative ADR
Having a day in court Some people want to seek vindication, but has to balanced against potential costs
and chance of success
Enforcement Non-adjudicative ADR is when 2 parties settle in a contractual form (usually
enforcement not an issue)
Adjudicative process might lead to 1/both parties being unsatisfied w/ the decision
and thus refuse, even refuse even tho there’s a provision for enforcement of arbitral
awards
- if there’s an issue of enforcement, ADR may be best used after issue of
proceedings so the outcome can be recorded in a consent order = enforced
easily
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