Alternative Dispute Resolution (“ADR”)

It is rare to find a case that is not capable of being resolved without involving the Court. The reality is that most matters are capable of being resolved where the disputing Parties adopt a conciliatory approach rather than an adversarial approach. The Court process in England and Wales is now notoriously expensive (in both financial and time perspectives) and is fraught with risk. Due to the manner in which the Court system works, for any claim over £10,000.00 the principle of “Costs After the Event ” applies. This means that the successful Party is entitled to have an Order made entitling them to recover their costs. It does not mean that you do recover those costs. Depending on the financial status of your Opponent, it may well be that even if you win (from whichever position you advanced) you are simply left with a damages and/or a professional costs liability that you cannot recover.  Add this to the increased Court fee1 and a year long litigation, there is a significant benefit to Parties to consider engaging in Alternative Dispute Resolution (ADR).

In the main, all ADR is undertaken on a without prejudice basis. This means that it is “peripheral”2 to the position that you may have adopted as part of your dispute and enables the Parties to talk more freely than when they are engaged in formal arenas. ADR takes many formats but the most well-known would be where a Mediator3 is appointed to try and help the Parties reach an amicable and commercial resolution to their dispute. In circumstances where a resolution is not achieved, the very least that the Mediator should do is assist the Parties in narrowing down the points of dispute (which in turn should allow the Parties to reassess their position post Mediation thereby reducing the costs being incurred in respect of the dispute).

Why choose mediation? It is a voluntary process that the Parties are free to engage in at any point that is either practical for them to do so or at the same time as formal proceedings may be active. Whilst it is a voluntary process, where the matter continues and proceeds to a final hearing, the Court does take a dim view on Parties who unreasonably refuse to mediate and often ‘punishes’ the party (who refused to mediate) by way of making a costs order against it.

Weighed against the cost of pursuing matters through the Court, ADR (and particularly mediation) is conceivably cheaper. In addition to cost, mediation offers parties greater flexibility to reach resolutions that they can live with and it can encourage the repair of ‘broken relationships’. Many matters are (or become) personal and so, mediation can often bring the ‘human side’ back to the dispute notwithstanding the commerciality of the dispute.

ehl Commercial LLP has mediators within its team and it is happy to be instructed as the Mediator by Parties to try and bring about a resolution. ehl Commercial LLP has access to offices that are specially designed for mediations4 and our mediators work on an agreed fixed fee5.

Please feel free to contact the Office for more information on either 0330 024 9643 or mediation@ehlcommercial.co.uk

Footnotes:
  • 1 Claims where damages being sought are in excess of £10,000.00 attract an initial filing fee commensurate to 5% of the overall value of the claim. Claimants’ should be aware that there are 2 further non-refundable fees to be paid once the claim is live.
  • 2 Without Prejudice means that it is separate / non-detrimental to your open position.
  • 3 A mediator is an independent 3rd party who will usually have a good understanding of the subject matter of the dispute. The Mediator’s appointment is done by agreement and the Parties are jointly and severally liable for the costs of the Mediator.
  • 4 ehl Commercial Law’s office is specifically designed for Mediations. Each party will have their own room to enable them to discuss matters and take advice as well as a “joint” room for the opening statements. WiFi and complementary food and drinks will be provided.
  • 5 The fee which is agreed beforehand and borne joint and severally between the Parties. The fee agreed relates to mediation running between 10:00 – 17:00 after which time an agreed hourly rate will apply.