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Alternative Dispute Resolution (ADR) in Family Law

Often separating from your spouse or partner can be a very difficult and stressful time in your life with many issues to resolve. For many couples, going through the courts is not always the best option as it increases animosity and can be lengthy and costly in nature. Different types of Alternative Dispute Resolution (ADR) can help parties try and resolve matters in a more cost-effective way.

What is alternative dispute resolution?

ADR is a process for resolving disputes without the need to go to court. In family law, this could involve mediation, negotiation, a private Financial Dispute Resolution Appointment, arbitration or a collaborative approach. ADR works well for people who are willing to resolve matters in an amicable and non-confrontational way.

The various types of alternative dispute resolution are:

Mediation

Mediation involves you and your spouse or partner meeting with a trained independent mediator who will help assist you to explore and discuss issues, with the aim of finding solutions, narrowing the issues and/or helping people to reach an agreement. The mediator will remain neutral and will not provide either of you with legal advice. A mediator can help with arrangements for the children and/or financial division of assets following separation.

If you are able to reach an agreement in mediation, the mediator will record the agreement so that, where required, a solicitor can draft the agreed terms into a legally binding document which is submitted to the court.

Mediation may not always be appropriate for a parting couple especially if there is domestic abuse within the relationship. In these cases other types of alternative dispute resolution may be more suitable.

Negotiation through solicitors

Negotiation will require you and your spouse or partner to provide disclosure before entering into negotiations via solicitors’ correspondence which will hopefully lead to an agreement. Again, if an agreement can be reached, one of your solicitors will draft the agreed terms into a legally binding document which will be approved by both parties before being submitted to the court.

Arbitration

Arbitration is an alternative to applying for a decision from the court and involves a referral of your case to a skilled, trained arbitrator. They are usually someone who is legally qualified and has experience in family law. The appointed arbitrator will hear from your respective legal representatives and will examine the issues which require a decision. The arbitrator will issue a decision that is legally binding on you both which can be enforced through the courts.

The arbitrator can generally hear a case and will issue a decision more quickly than a court will be able to resolve a case.

Collaborative Law

Collaborative law requires both you and your spouse to be represented by collaboratively trained lawyers. At the outset, everyone signs an agreement setting out the ground rules and agreeing that the case will not be taken into court unless the process breaks down. If the collaboration does not succeed, both you and your spouse will need new solicitors to deal with court proceedings.

All of the discussions about settlement take place at round table meetings with both legal representatives and clients present. Generally, any experts such as valuers or accountants or pension experts are instructed jointly on a shared cost basis. This will enable both parties to discuss matters which are disputed and the aim is to reach an agreement which will then be drafted into a legally binding document which is then submitted to the court.

Early Neutral Evaluation (ENE)

ENE involves the appointment of an independent, objective and neutral third party to assist the parties to understand the court process, identify what the issues in dispute are and give their opinion as to what a court might decide. This can be considered before proceedings have been started or during court proceedings. This decision is confidential and is not binding or enforceable, but is an indication from an experienced barrister or part-time Judge, of what the outcome may be. It is intended to help the parties to consider whether they are able to reach an agreement together and can be used to consider financial or children cases.

In particular, it is used in matrimonial finance proceedings where it is known as a private FDR. An FDR Judge will hear the case independent of the court process and can also be asked to just consider a discreet issue. The FDR Judge will review the financial disclosure which has been provided by both spouses and will hear from each spouses’ legal representatives. The Judge will give an indication as to what they believe to be the appropriate outcome if the matter was determined in court at a final hearing. Once the parties have heard the indication provided by the Judge, they will enter into negotiations with the aim of reaching an agreement. This agreement can then be sent to the court for approval.

Talk to Tollers

There is no one size fits all and it is possible that a couple may need the help of one or more ADR process.

If you require assistance and want to consider ways of reducing conflict and would like to find the process most suitable to you … Talk to Tollers on 01438 901095. Our experienced family team is on hand to guide you through and help you to try and reach an agreement outside of the court.

In order to protect your business it is vital to understand restrictive covenants and how to use them in your employment contracts.  An ex-employee who possesses insights into your classified data, customers, and suppliers could become a substantial liability if they join a rival company or launch their own competitive venture. Therefore, when creating and negotiating employment contracts, consider what restrictions you would like to place on your employees or consultants if they resign, the contract ends, or are terminated. Including restrictive clauses that your employee or consultant has agreed to in writing could provide your business with legal protection and help you enforce these restrictions if the employee attempts to breach them.

In this blog, our specialists in Employment Law and Dispute Resolution have collaborated to answer frequently asked questions regarding the advantages of restrictive covenants in an employment contract and the process for enforcing them if issues arise.

  1. What are restrictive covenants?

Regarding an employment contract, restrictive covenants (also called post-termination restrictions) are a common feature of employment contracts and can help protect your business through periods of staff turnover. They are intended to survive the end of the employment relationship and prevent those employees from compromising your business interests by, for example, setting up a business in direct competition with you, going to work for a company that operates in direct competition with you, attempting to solicit your clients, customers or staff, or divulging trade secrets or confidential information.

  1. How do restrictive covenants work?

Drafting restrictive covenants requires careful consideration. These covenants should be specific, tailored to the role and go as far as is reasonable to protect your business interests. You should decide on a timeframe for the restrictions to apply, which may typically exclude any garden leave or notice period and geographical scope, such as a ten-mile radius of your premises. It is also essential to update the restrictions if an employee is promoted or starts a new position in your company to ensure that the covenants apply to their current job role. If an ex-employee breaches these covenants, they may be liable to a claim for breach of contract, and you may be able to recover losses incurred as a result of this.

  1. Why are restrictive covenants important for employers?

Restrictive covenants can provide businesses and employers with legal protection, covering matters such as:

  1. Are there different types of restrictive covenants?

Yes, there are various types, including non-compete clauses (which prevent ex-employees from working for competitors), non-solicitation clauses (which restrict solicitation of clients), and non-disclosure clauses (which prevent the sharing of company secrets).

  1. Are restrictive covenants enforceable?

Standard contract clauses restricting an employee’s activities after employment ends are typically invalidated due to their conflict with public policy and being viewed as a form of trade restraint.

Therefore, the enforceability of any restrictive covenants is fact-specific to each case.

  1. What should an employer do if they suspect a breach of a restrictive covenant clause in an employment contract?

If a former employee breaches legally binding restrictive covenants, the former employer can resort to specific measures to remedy the situation. One of the first steps includes sending a cease-and-desist letter to the former employee, detailing the alleged breach, and requesting compliance with the covenant in issue. Typically, the letter will specify a deadline for a response.

If a former employee does not respond or refuses to comply, the employer may need to consider legal action. Legal remedies could involve filing for an injunction to prevent ex-employees from committing further breaches and commencing a claim for damages for the losses the employer has suffered due to the breaches by the employee.

  1. Can the dispute be resolved without legal action?

In most cases, it is advisable to attempt to resolve the dispute through negotiation or alternative dispute resolution (ADR) methods like mediation. This can save time and costs compared to litigation. It is also important to note that the courts typically view those who do not attempt to resolve disputes through ADR unfavourably when it comes to deciding who should pay costs at the conclusion of any court proceedings.

Remember, pursuing a claim for breach of restrictive covenants can be legally complex and should be approached carefully. It is crucial to seek legal advice and representation from specialists in this area of law to protect your interests and rights as an employer.

Legal Advice for Employers in Stevenage, Corby and Northampton

At Tollers, our employment lawyers in Stevenage, Corby and Northampton are experienced in assisting former employers in pursuing ex-employees who breach their restrictive covenants. We can advise on whether the restrictions you seek to rely on are enforceable and, with our experience, can help you protect your business from further damage caused by an ex-employee’s breach of such restrictions.

Should you require further information or assistance, please get in touch or contact us on 01604 258558 or complete the form below.

Robust Employment Support with Tollers HR

At Tollers, we understand the invaluable role your employees hold, along with the potential challenges they present. Hence, we have designed Tollers HR – a tool tailored to facilitate confident, cost-efficient HR management. Let us shoulder your HR responsibilities while you concentrate on what you do best – running your business. Our dedicated solicitors are here to provide you with personal, hands-on support, helping you navigate any employment law challenges that may arise. Utilising our legal teams for your outsourced HR solution ensures you can have peace of mind knowing that the advice and support you receive is legally protected and backed by regulated professionals who understand the intricacies of employment law.

Some of the key benefits of this service include:

Tribunal and Damages Claims: Specialist Indemnity Scheme Protecting Your Business

In partnership with a leading specialist insurance provider, the Tollers’ HR indemnity scheme covers tribunal costs and awards of up to £100,000 per case. We do not self-insure, which means we can cover all areas of potential claims, including discrimination. Our indemnity scheme is an essential safeguard against the unexpected costs of a Tribunal claim and can take away the temptation to settle a case on a commercial basis. Furthermore, it can protect against the cost of pursuing damages claims and injunctions, such as breaches of restrictive covenants. With Tollers’ HR indemnity, employers can have peace of mind, knowing they have a robust defence against legal uncertainties.

Robust Representation: Expert Guidance When You Need It

When faced with a Tribunal Claim or the need to pursue damages, Tollers is here to support you. Our professional and ethical advice can be critical to achieving successful outcomes, allowing you to focus on your business operations.

Navigating Employment Tribunals or Breach of Restrictive Covenant claims can be daunting and involve a specialist legal process that can prove complex, time-consuming, and costly. Tollers HR insurance indemnity can protect your business against the uncertainty of these costs, covering the expenses associated with Tribunal proceedings or legal actions against former employees.

What sets us apart is the expertise of our solicitors, who bring a wealth of experience in handling Tribunal and damages claims and a deep understanding of your unique case, thanks to your affiliation with Tollers HR. This insight allows us to meticulously prepare your case, and should you choose, we can even represent your business throughout the entire process, providing steadfast support from the initial stages to the final hearing.

Anytime Advice Line: Direct to Solicitor Support at Your Fingertips

Enjoy peace of mind with our ‘direct to solicitor’ service, exclusively available to Tollers HR members. Our experienced employment law solicitors are just a call away, providing reliable support and advice whenever you need it on everyday employment matters and general inquiries.

Find out more ….

These are just a few of the benefits available and the protection covered by the Tollers HR insurance indemnity. Tollers HR package ensures you and your business get hands-on support and legal advice for all Human Resource issues from our specialist employment law solicitors. Click the link to find out more about Tollers HR.

The Government has recently announced details, set out in the Renters Reform Bill 2022 (“the Bill”), to end a landlord’s ability to terminate a residential tenancy on a ‘no fault’ basis. To do this, the Government will move all tenants who would previously have had an Assured Shorthold Tenancy to a single system of periodic tenancies.

The proposed changes are the biggest shake-up of the law governing Landlord and Tenant relationships for over 30 years.

Currently, a landlord can serve a tenant with an ‘s21 notice’ to bring their tenancy to an end, without having to give a reason. An s21 notice can only be served if a landlord has complied with a number of procedural requirements beforehand and is commonly referred to as the ‘no fault notice’.

The Government believes that the outlawing of the ‘no fault’ route to possession will offer tenants greater protection from alleged rogue landlords who seek to terminate tenancies without giving any reason. Government statistics state that 22% of those who moved last year did not end their tenancy by choice.

Recognising that landlords’ circumstances change, the Bill will also introduce new grounds for eviction for landlords who want to sell their property and/or move into the rental property. This ground cannot be used for the first six months of the tenancy (similar to how the current s21 procedure works).

New mandatory grounds for repeated serious arrears will also be introduced. This aims to help landlords who have tenants that pay off a small amount of arrears, keeping them under the mandatory repossession level of two months’ arrears (and thereby defeating the ability for the tenant to ‘play the system’).

Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at the possession hearing.

Under the s8 procedure, the notice period for the existing rent arrears eviction grounds will increase to four weeks and the mandatory threshold at two months’ arrears at the time of serving notice and hearing will remain unchanged. The reason being is to ensure that tenants have a reasonable opportunity to pay off arrears without losing their home.

The Bill will also allegedly introduce, amongst other things, a property portal to help landlords understand their obligations, give tenants performance information to hold their landlord to account, and help Local Authorities reduce poor practice. It will also be unlawful to apply a blanket ban on pets.

If you require assistance or advice on obtaining possession or a property, Talk to Tollers on 01604 258558 where our experienced Dispute Resolution team is on hand to provide you with the most up-to-date information and guidance.

More about how we can assist with all types of property disputes.

 

It is important to understand the options available to residential landlords who are looking at obtaining possession of properties let under an assured shorthold tenancy.

The procedure for obtaining possession of a property occupied by a tenant under an assured shorthold tenancy agreement is that a landlord must first provide their tenant with formal notice before commencing possession proceedings. A landlord must not attempt to evict a tenant without an order for possession, as this would be a wrongful eviction which is a criminal offence.

Tenants must be given either:

During the pandemic, the Government introduced emergency legislation that extended the timescales for the service of s8 and a s21 notices.

As of 1 October 2021, the majority of the restrictions imposed under the Coronavirus Act 2020 were lifted, and the notice periods required for s8 and s21 notices reverted to that of the pre-pandemic period.

For s21 notices, where the tenant is entitled to the statutory 2 months’ notice, the notice can be relied upon to commence possession proceedings for a period of 6 months beginning with the day it is given to the tenant.

For s8 notices, a landlord must provide a tenant with at least 2 weeks’ notice (this varies depending on the ground relied upon) and commence possession proceedings within 12 months from the day upon which the notice was given to the tenant.

Following the expiry of the relevant notice, possession proceedings can be commenced, however, it can take a number of months to obtain an order for possession.

Once the court has granted an order for possession, a warrant for possession must be applied for if the tenant continues to refuse to vacate the property. When a warrant for possession is granted, an eviction date will be scheduled by a County Court Bailiff.

If you require assistance or advice on obtaining possession of a property and the different notices…Talk to Tollers on 01604 258558, our experienced Dispute Resolution team is on hand to provide you with the most up-to-date information and guidance.

Adverse Possession enables someone in possession of land belonging to someone else to obtain title to the land provided certain criteria are satisfied, this person is often referred to as the squatter.

What must the squatter prove?

In the case of unregistered and registered land, the squatter will need to evidence that they:

Factual possession

The squatter must prove that for the requisite period of time, (details below) they had the required degree of physical control over the land in question.  The squatter, therefore, needs to demonstrate that they have exclusively dealt with the land in a manner which an owner occupying the land may have done.

The period of ownership needs to be 10 or 12 years depending on whether the period in occupation ends before 13 October 2003 and whether the land is registered or not.

Intention to possess

The squatter must demonstrate that during the required period of occupation they had the required intention to possess the land in their own name and on their own behalf.

To the extent legally permitted and possible, the required intention to possess must be to exclusion of all others.

Application process

The facts and matters in dispute will be relevant to deciding whether to make an application to the Land Registry or the Court.

If the application to the Land Registry is contested, (and there is a process to be followed once an application by a squatter is received), the Land Registry will refer the matter to the Lands Tribunal to determine.

Getting your case in order with the required evidence is fundamental to any application by any squatter succeeding or being defended.  Tollers have a team of experts who can quickly assess the merits of any claim and advise on the application process whether it be on behalf of the squatter or landowner opposing the application.

Adverse possession is a complex issue, if you would like to speak to a member of our Dispute Resolution team…Talk to Tollers on 01604 258558 and our team will be happy to discuss your claim further.

The Government’s guide regarding Adverse Possession.

There has been a huge amount of commentary on the impact of Covid-19 on commercial contracts since the outset of lockdown including discussions in relation to the application and enforcement of force majeure clauses and the frustration of contracts.

As lockdown restrictions are eased and businesses open up again boards need to consider whether the performance of contracts which were previously suspended due to force majeure must be resumed. If this does not happen the other party is likely to consider what options it has in relation to enforcement of the contract or even possibly termination.

In May the Cabinet Office issued Guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the Covid-19 emergency.

This new guidance sets out guidance and recommendations for responsible and fair contractual behaviour in the current climate in an attempt to avoid potential disputes and business should have regard to this. The guidance stresses that good contractual behaviour is important both for jobs and for economic recovery.

So what is meant by fair and responsible contractual behaviour?

  1. Being reasonable and proportionate in responding to issues relating to contractual performance and enforcing contracts; and
  2. Acting in a spirit of cooperation with a view to achieving a practical, just and equitable outcome having regard to the impact on the other party, the availability of financial resources, the protection of public health and the national interest.

The government is strongly encouraging parties to seek to resolve disputes responsibly through the use of negotiation, mediation and other alternative dispute resolution strategies.

This guidance is not law but parties to a contract must consider the impact of the guidance when disputes arise and consideration should be given to how to move forwards. It is not clear at this stage if the courts will take into account whether or not parties have taken the guidance into account but the guidance should be seen as a commercial deterrent to unreasonable behaviour.

For further information about the guidance… talk to Tollers on 01604 258558 and speak to the contracts specialists in our commercial contracts or dispute resolution teams, who will be happy to assist.

https://www.tollers.co.uk/dispute-resolution/

https://www.tollers.co.uk/commercial-law/

Earlier this year Skansen Interior Limited (Skansen), a small interior design company, was found guilty under section 7 of the Bribery Act 2010 for failing to prevent bribery. This is the first UK contested case where the defendant had tried to rely on the “adequate procedures” defence against the charge of failing to prevent bribery. Until now, there has been limited guidance available to businesses as to what constitutes “adequate procedures”.

The background to the case is that during a tender process for refurbishment contracts worth in total £6 million, Skansen made two payments to a senior employee within the customer’s tender team. In exchange, Skansen received an advantage and won the tender. A third payment was discovered and stopped by Skansen’s management who reported the matter for investigation. Despite Skansen’s co-operation, it was prosecuted for failing to prevent bribery.

One of the arguments Skansen’s lawyers put forward in defence was that the size of Skansen’s business (being less than 30 employees) meant that sophisticated anti-bribery controls were not necessary. The jury disagreed and Skansen was convicted. The only penalty available in this case was an absolute discharge due to the fact that Skansen was a dormant company with no assets at the time of trial. Many will interpret the decision to prosecute Skansen on this basis as a clear message that even small businesses must still comply with the Bribery Act.

During due diligence and warranty negotiations in merger and acquisition deals, we often hear that the target company couldn’t possibly be involved in bribery and that bribery considerations are irrelevant. This case illustrates that bribery can occur in all sorts of companies, including SMEs and owner-managed businesses and must be considered seriously.

Buyers (and their lenders) are likely to be more cautious to this risk now and accordingly will carry out enhanced due diligence and demand stronger contractual protections. On the other hand, sellers should consider these issues carefully and review their anti-bribery procedures and documents.

Talk to Tollers!

Tollers are able to advise you on the risks associated with the Act and how best to tackle these risks in the context of an M&A deal. Talk to Tollers on 01604 258558.

The Consumer Rights Act 2015 (“the Act”) came into force on 1 October 2015 and applies to contracts between “Traders” and “Consumers”.

Section 2 of the Act defines a Trader as “a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf”.

Consumer is defined as “an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”.

This article focuses on the key points traders need to be aware of when contracting with consumers for the sale of goods after 1 October 2015 and where the goods are not of satisfactory quality or fit for purpose.

Right to reject faulty goods

Prior to the Act coming into force, there was a great deal of debate as to what was a reasonable time for the purposes of establishing whether a consumer still had the right to reject faulty goods and in particular whether that right had been lost due to the consumer having been deemed to have accepted the goods.

The Act seeks to clarify this issue by creating a new short term right to reject within 30 days (“the 30 Day Period”). Assuming that the consumer can prove that the goods are faulty, they can reject the goods and claim a full refund within the 30 Day Period. The 30 Day Period runs from when ownership of the goods passed or in the case of goods on hire purchase, when possession of the goods is transferred to the consumer.

The 30 Day Period is clearly not likely to be appropriate for purchases of goods which have a life expectancy of less than 30 days. In such circumstances the short term right to reject will be determined by when the goods in question would reasonably be expected to perish.

Consumers can elect or allow the trader to carry out repairs or replace faulty goods within the 30 Day Period. In such circumstances, the clock, for the purposes of calculating the 30 Day Period stops until the goods have been replaced or returned.

There is however no requirement for the consumer to allow the trader an opportunity to carry out a replacement or repair to faulty goods within the 30 Day Period before exercising the right to reject.

Traders cannot exclude the 30 Day Period and the period only lapses due to the expiration of time.

Repair/replacement of faulty goods and final right to reject or secure a reduction in price    

If a fault is identified within 6 months of delivery, it is assumed that the fault existed at the time of delivery. It is for the trader to rebut this assumption.

Within 6 months of delivery a consumer can, if it is possible, choose to have the faulty goods repaired or replaced. If the fault is not resolved the consumer can claim final rejection or a reduction to the purchase price. Save for sales of motor vehicles, traders will now be unable to make a deduction for the use of the goods that the consumer has had within the first 6 months following delivery.

Traders will now only have one opportunity under the Act to replace or repair faulty goods. A consumer, can still if he wishes, allow the trader further opportunities to replace or rectify defective goods but is not required to do so. Further opportunities do not prevent the consumer from exercising their right should it become necessary to reject the goods or require a price reduction.

Tollers Dispute Resolution team have handled numerous consumer disputes. If you require any assistance in this area please do not hesitate to contact Tristan Benson on 01536 276498

Introduction

Litigation is an inherently uncertain and risky process. It is easy to start but more difficult to bring to an end without going to trial. By following the steps set out below, disputes should be easier to avoid and to manage.            

1. Read and understand your commercial contracts before signing

Parties tend to focus on the commercial terms such as price, quantity and delivery dates. However, careful note should be taken of the termination provisions, whether there is a process for resolving disputes and (if contracting with an overseas party), the governing law of the contract and which courts will have jurisdiction. In my experience, these provisions only come to light after a dispute has arisen, by which time the parties are bound by whatever is written in the contract.

2. Have a full set of Terms and Conditions and do all you can to ensure that they apply to your contracts

There is no point having a comprehensive set of Terms and Conditions if they do not form part of the contract. Take care to understand how the “Battle of Forms” works so that you can organise your paperwork to ensure that, as far as possible, your Terms and Conditions apply.

3. Understand the legal status of the other party

Your customers and suppliers may be private individuals working as sole traders, limited companies, limited liability partnerships or traditional partnerships. The options for pursuing a claim will, to some extent, be dependent on the legal status of your opponent and its asset position.

4. Take personal guarantees if possible

It can often come as an unpleasant shock when dealing with a limited company to find that the company is a shell with no material assets. Whilst commercial realities obviously apply, if you are concerned that the other party may not be able to meet its liabilities, you should at least consider asking for personal guarantees from the company’s directors or another third party. If the directors have a personal interest in the transaction, they are less likely simply to put the company into liquidation and walk away.

5. Manage communications with the other party

Once a dispute arises, it is sensible to challenge communications through a nominated individual within your organisation. This avoids the risk of adverse disclosure to the other side from, say another employee who does not have the full picture. It also ensures that you approach the dispute in a consistent and coherent manner.

6. Preserve all types of evidence

The facts and matters to which the dispute relates may have arisen many years before the claim is pursued. The longer the time period, the greater the risk that evidence will be lost. This can easily occur by the accidental deletion of backup data and the disposal of obsolete equipment such as laptops and servers. Employees may also leave the organisation and take with them electronic equipment containing evidence such as text and emails.

7. Check insurance and funding

Long running litigation is inevitably expensive. Your costs may, however, be covered by insurance policies which you hold either of a household or commercial nature. If so, it is important to make a claim on the policy as soon as possible after the dispute has arisen. Where funds are not available to finance a claim, funding from a third party may be an option, albeit the funder will take a share of the damages in return for their financial contribution. The risk of having to pay the other side’s legal costs can also be dealt with via what is known as After The Event (ATE) insurance.

8. Be clear as to your commercial objective

Pursuing a claim as a matter of principle is an expensive luxury. Before embarking on litigation, you should be clear not only as to the overall cost and risk involved but what you are aiming to achieve in terms of an acceptable financial settlement or other remedy. With the assistance of your legal team, you should cost out the worst and best case scenarios and always be as objective and realistic as possible.

9. Always keep in mind a commercial settlement

Claims settle at various stages. Efforts should always be made to settle a claim before legal proceedings are even issued. However, sometimes it is necessary to serve a Claim Form to demonstrate that you are serious about the claim. Courts now routinely stay legal proceedings at an early stage to give the parties an opportunity to negotiate. A review of the position should also be taken after disclosure of documents and exchange of witness statements to ascertain whether a window of opportunity for settlement is available. In considering what is an acceptable settlement, you should factor in not only the merits and value of the claim but also the fact that you will only recover about 70% of your legal costs even if you win and you will not recover the value of the management time which will need to be devoted to dealing with the case.

10. Understand and embrace the benefits of mediation

Mediation is an entirely without prejudice process where the parties share the cost of a meeting with a neutral mediator. This is now a widely accepted dispute resolution method and actively encouraged by the Courts. There is a significant benefit to having a neutral mediator present who can say things to each party which do not sit well when coming directly from the other side. The process also allows for a more flexible settlement as opposed to the all or nothing outcome of a trial. Around 75% of mediations result in a settlement on the day of mediation or shortly thereafter.

Many of the above points are simple, common sense but it is surprising how often they can be overlooked in the heat of a dispute. If you would like any further information on our approach to dispute resolution please contact Tristan Benson.

In practice, many people are not aware of the key differences between these three forms of resolving disputes, even though they may have contractually agreed to follow a specified method in the event of a dispute arising.

Mediation

Mediation is becoming the most common method of alternative dispute resolution. This involves appointing a neutral, independent trained mediator.

Mediation is entirely voluntary and conducted on a “without prejudice” basis.  This simply means that the parties cannot refer to matters discussed during the mediation in any future Court litigation. 

Often the mediator will gather the parties together at the start of the day so as to allow each party to set out its position.  The parties then split into separate rooms with the mediator going between the rooms to try and narrow the issues in dispute with the ultimate view of achieving a settlement.  The intervention of an independent mediator can sometimes help the parties to take a step back from the litigation and consider matters from a more objective prospective.  This can help in facilitating a settlement of even the most contested disputes.

Parties tend to engage in mediation after the formal Statements of Case in Court proceedings have been served.  This means that the expense of preparing a case for trial such as dealing with disclosure, witness evidence and the trial itself can be avoided if the case settles at mediation.

The Court encourages parties to engage in mediation and a failure to engage in settlement discussions without a justifiable reason can lead to costs consequences even if the offending party is ultimately successful at trial

Arbitration

Arbitration is in private as opposed to being in public.  An impartial professional is instructed to make a decision on the dispute.  This in turn means that it can be quicker for cases to be resolved. However the arbitrator’s time is paid for by the parties unlike a Judge.

There are also limited grounds to appeal the arbitrator’s decision and the arbitrator has the power to order costs. 

The parties have to agree to arbitration. It is therefore often found in international overseas contracts as it allows the parties to agree a neutral venue and mechanism for dispute resolution at the outset. 

Adjudication

Adjudication is widely recognised as being a “pay now argue later” mechanism for resolving disputes.  Adjudication is most often used for resolving construction disputes as the parties to a construction contract cannot contract out of it.

Whilst it can be extended, the adjudication is generally a 28 day procedure which is started by a party serving a Notice.  There are strict limits to comply with when dealing with an adjudication.

Generally an adjudicator has no power to award costs unless the parties have otherwise agreed. 

Adjudication awards are enforced by the Courts. The idea behind adjudication proceedings is that it is designed to protect cash flow for businesses by preventing one party from withholding payments for significant periods of time.  Adjudication however, does not finally dispose of the matter.

The adjudicator’s decision often last until practical completion, at which point it can be arbitrated or litigated if not accepted.  Generally, adjudication is appropriate for dealing with claims relating to:-

The above is merely a brief summary of the main differences between adjudication, arbitration and mediation. Should you require further advice on choosing which of the above methods is most appropriate to your dispute then please do not hesitate to get in contact with the Tollers Team and in particular Tristan Benson on 01536 278498.

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