Dispute Resolution: Aggressive Litigation Isn’t The Only Option – Resolution suggestions…
Disputes are a regular feature of business and commercial life. Many are minor issues that can easily be resolved between the parties involved. Other types of business disputes are so major that they may threaten a company’s very existence.
Businesses should explore alternative ways to resolve disputes commercially and negate the need for court proceedings. Resolution strategies come in many forms, each method comes into its own when executed properly, these options are summarised below;
Negotiation
- This is the simplest and quickest route and is cost free.
- Both parties come together to achieve a mutually agreeable decision.
- This is most effective for minor disagreements and misunderstandings that are caught and dealt with early on. However it has also proved successful with large disputes when both parties could be exposed to severe cost risks.
- This could lead to a ‘without prejudice’ meeting between parties to either resolve the issue or narrow the points in dispute.
Mediation
- Mediators, like those at Else Solicitors, are highly experienced in Dispute Resolution.
- Mediation is where an independent and experienced mediator facilitates the discussions and negotiations between all parties.
- This approach helps maintain your business relationship and is relatively quick; usually taking 1-2 days.
- It costs considerably less than litigation and everything that occurs remains confidential.
- A mediator will guide you through the process and encourage you to find a solution which suits both your needs. The only drawback is if you do not come to an agreement, the dispute will remain unresolved and the cost of mediation will have been incurred without a result. The cost of the mediator is usually shared by both parties. However, it does allow you have an insight into your opponents “hand” which could assist you in achieving a resolution after the mediation.
- The outcome of a successful mediation is a written and binding agreement signed by both parties.
- Mediation is the preferred method of dealing with disputes as it is quick and inexpensive.
Expert determination
- This is an informal dispute resolution system which is often used when there is a valuation dispute (often seen in construction disputes).
- If an expert is to be used to determine the dispute, then both parties need to agree this by written contract and that they will be bound by the decision.
- This is a cheaper and quicker way of resolving valuation disputes and allows both parties to jointly instruct experts at any stage.
However, it is difficult to challenge the expert’s decision. Their decision cannot be enforced without litigation or arbitration proceedings. Therefore if you get a forcible decision the other party may not adhere to the decision of the expert resulting in the need for further enforcement.
Arbitration
- Arbitration is similar to litigation in that an arbitrator resolves your dispute in the same way a judge would, i.e. on the basis of material facts, documents and relevant principles of law.
- Both parties must agree to arbitration, an impartial arbitrator and to split the costs.
- Arbitration is often cheaper and quicker than litigation.
- It is a much more flexible route than pursuing court proceedings.
- However, an arbitrator has limited powers of compulsion, if one party fails to comply with the directions set and there are only limited grounds to appeal their decision.
- An arbitrator has the power to order costs and the details of your case remain confidential.
Adjudication
- Adjudication is a process in which a mutually agreeable arbitrator (or one appointed by the Adjudicator Nominating Body when you cannot agree) will give a decision on your dispute.
- It can relate to breach and termination of a contract, professional negligence and construction disputes.
- This is often referred to as a “pay now, argue later” way to resolve disputes when you are both in an on-going contract.
- Adjudication is a relatively quick process (usually taking 28 days) which is considerably less expensive than litigation.
- The cost of the adjudicator is split between the two parties as determined by their agreement when entering adjudication. Legal costs however, will be not payable by the successful party.
- The process is triggered by one party serving a Notice of Adjudication.
- An adjudicator’s powers are limited and their decision can be arbitrated or litigated if not accepted.
Litigation
- Litigation matters are dealt with in the court system.
- The main advantages of litigation are that the claim process is managed by a judge throughout and the decision is binding and enforceable.
- However, it is often a slow process and can be the most expensive way to resolve a dispute.
- In addition, the proceedings will be public which can affect a number of ongoing concerns for a company including reputation, identity and even credit rating.
How Else can help
In the event that you need an experienced dispute resolution solicitor to handle your matter, Else Solicitors can help you to choose the most appropriate option and achieve the best result. Else also have a team of experienced Mediators who can act for individuals and also businesses who are looking to mediate. For more information and to discuss your particular case, please contact Andy.Rudkin@elselaw.co.uk or call the office on 01283 526 200.
P.S. It is important to take a step back and acknowledge that costly disputes can be avoided. All businesses should have water tight contracts, terms of business and agreements in place from the off. By instructing a commercial solicitor to draw up legal documents, you could end up saving you and your business a small fortune in dispute resolution fees. If you would like more information regarding protecting your business please email Adam.Gilbert@elselaw.co.uk.