If you or your business is involved in a dispute, it can often lead to unbudgeted cost and expense with no guarantee of a successful outcome. Resolving a dispute quickly, even if it means negotiating, is often the preferred approach to ensure this doesn’t have a significant negative impact on you or your businesses reputation. Alternative Dispute Resolution (ADR) is encouraged by the courts and should always be considered before resorting to litigation.
When setting out contracts at the outset of a new business relationship, it is worth agreeing what form of dispute resolution is preferred should a disagreement arise.
Mediation
Mediation is often the most referred to method of ADR. It is a confidential process where each side appoints an independent mediator. It normally involves a joint session followed by an assisted negotiation through a mediator. Once a negotiation is agreed, it is usually only legally binding once it’s been recorded in writing. If mediation does not result in a settlement, an alternative is to appoint the mediator to act as an arbitrator and make an award in favour of one party. This is often referred to as Med Arb.
There is more to ADR than mediation. Often a bespoke ADR process, sometimes involving several stages is required in order to effectively resolve a dispute.
Expert evaluation
Expert evaluation is often used in cases where the issues rely on expert evidence. For example, in a construction dispute the case may turn to a third party independent structural engineer to provide their opinion on the matter. It can be agreed in advance whether or not both sides wish the opinion to be binding. If they choose for it to be binding, this is known as expert determination.
Arbitration
Another form of ADR is arbitration. This involves appointing one or more arbitrators, either lawyers or specialists in the dispute subject matter. Unless agreed beforehand, the arbitrator will decide the procedure in accordance with the principles of natural justice. With the increase in court fees, arbitration can be a cost effective alternative and much quicker than litigation. If doing business with a counter party abroad, arbitration will also help to avoid falling subject to unfavourable jurisdictions.
Our lawyers can tailor make processes matched to your objectives and budgets in order to provide the best possible prospects of a swift resolution.
