Alternative Dispute Resolution

Recent caselaw has delivered the clear message that alternative methods of dispute resolution should be carefully considered at all stages of a dispute. Failure to do so can lead to devastating consequences for the recovery of costs in any subsequent litigation.

All businesses must remain aware of the need to actively consider ADR (Alternative Dispute Resolution) and the potentially serious costs consequently of not doing so.

Lawyers and legal advisors have always fallen into one of two camps: either pro or anti-ADR. Some lawyers believe that to propose mediation (which is the most popular form of ADR) is a sign of weakness and that its use is over-hyped. This cynical view which is partly borne out of ignorance of the process or in some cases fear, (at least in private practice), of a drop in revenue for litigation departments is very quickly being eradicated by a relentless drive from the judiciary to elevate ADR to the top of the dispute resolution agenda. Very recent caselaw has delivered a knock out blow to the anti-ADR camp.

The foundations for this drive are set out in the CPR (Civil Procedure Rules 1998) which were spawned in April 1999 by Lord Woolf when he carried out the most widescale reform of the civil justice system for over one hundred years. The rules state that ADR must be considered at six different stages of the life cycle of litigation, which are:

Stage

CPR

Allocation Questionnaire

26.3

Stay to allow settlement

26.4

Case Management Conference

29.3

Listing Questionnaire

29.6 (1)

Pre-Trial Review

29.3 (1)

Listing Hearing

29.6 (3)

The introduction of codes of best practice (Pre-Action Protocols) also underline that ADR should be considered before proceeding are commenced.

Caselaw is now developing to support the CPR and its Protocols to the extent that it has recently reached a crescendo promoting the use of ADR on an unqualified basis:

Dyson and Field (Executors of Lawrence Twohey deceased) -v- Leeds City Council unrep. 22 November 2000

The Court of Appeal emphasised that it had powers to take a strong view with any party reluctant to engage in mediation by imposing orders for indemnity costs and ordering that a higher rate of interest be paid on any damages awarded.

Paul Thomas Construction Limited -v- Hyland and Another - Technology and Construction Court - 8 March 2000

The Court emphasised the need to comply with Pre-Action Protocols and to reasonably explore ADR. One party became obstructive when ADR was...