Commercial Dispute Resolution

 

Commercial disputes are of course an unfortunate fact of life. The objective must always to be to achieve an acceptable result at a reasonable cost. In practice the Court procedure should always be seen as a last resort. The court process is time consuming, costly and laden with risk.

It is far better to achieve a solution to the issue through an alternative form of dispute resolution. (ADR). The benefits of ADR include

  • Speed by comparison to the litigation process

  • Confidentiality

  • Lower cost

  • Option to reach agreement on points that the court might not be able to determine

  • Lower levels of confrontation meaning that commercial relationships can be preserved

  • Even if ADR is not wholly successful in resolving the dispute, some issues might be resolved and the scope of the dispute therefore narrowed

It is also significant that the court rules of procedure require parties to a dispute to try and resolve the issue by means of ADR before any proceedings are started. A party who unreasonably refuses to engage in ADR may be penalised by the court later. All this means that there is no tactical disadvantage in suggesting ADR.

ADR can take several forms; the right form in each case can depend on the nature of the dispute and the parties involved. In practice there are very few disputes that are not capable of being resolved through a form of ADR.

In the case of disputes arising from written commercial agreements, the agreement may well contain a dispute resolution procedure, many of which are expressed to be mandatory. Clearly any such procedure should be deployed before starting legal proceedings.

Without Prejudice discussions

In most disputes there will be communications on a without prejudice basis. Generally such communications cannot later be referred to the court. However it is open to the parties to make a concerted attempt to resolve the dispute on a without prejudice basis by means of a round table meeting whether with or without lawyers. This is the most economical form of ADR and provided that the parties are willing to co-operate in finding common ground, it can result in a settlement or failing that an agreement on a way forward aimed at resolving the dispute.

Mediation

Mediation involves the appointment of an independent, qualified mediator whose role is to facilitate agreement at a without prejudice mediation meeting. The parties and mediator enter in to an agreement to mediate. That agreement ensures that the mediation is confidential and that information and documents exchanges in the process cannot be deployed in any later litigation.

Documents and position statements are exchanged prior to the mediation. A skilled mediator will identify key issues and will work with the parties and their lawyers to develop solutions. These might be commercial solutions that could not be imposed by a court in the litigation process. The mediator will also work to reality test each party’s arguments and he or she will provide his or her independent expert view about the merits of central issues or arguments. However, the overall emphasis is on reaching a commercially acceptable solution.

A mediation will typically last a day and if agreement is reached, the terms will be recorded straight away in a binding settlement agreement.

Mediation involves a higher level of cost by comparison to a without prejudice meeting since it involves the payment of the mediator’s fee (normally shared equally between the parties) and there is generally a larger amount of preparation.

Expert determination

In cases involving technical subject matter, it can be better to appoint an independent expert to determine the dispute or at least certain issues flowing from its technical aspects. This can be done on the basis that either the expert’s determination will or will not be binding on the parties. Even if the determination is to be non-binding and it does not enable a settlement, the expert’s opinion may nevertheless resolve some issues therefore saving costs associated with any subsequent dispute resolution process.

We are experienced in dealing with all forms of ADR. David Herbert is a qualified independent mediator and therefore has experience of both conducting mediations as well as representing clients in the process.