What’s the alternative?
Date: 03 September 2010
Authors: Gavin Foggo & Molly Ahmed
Issue: Vol 160, Issue 7431
Categories: Features, ADR, Profession
In the 11 years since the Woolf Reforms were introduced, litigation departments across the City have been fast disappearing. A brief perusal of the top 20 law firms’ websites shows that the majority now promote their litigation practices as “dispute resolution”. The motivation behind such a re-branding is understandable when acting in commercial disputes: clients normally prefer to settle cases as soon as possible rather than become mired in time-consuming and expensive court proceedings.
Lord Justice Jackson begins his examination of the function of alternative dispute resolution (ADR) in controlling costs in his Review of Civil Litigation Costs by saying that: “ADR (particularly mediation) has a vital role to play in reducing the costs of civil disputes, by fomenting the early settlement of cases. ADR is, however, under-used. Its potential benefits are not as widely known as they should be.” Yet, although he acknowledges the importance of ADR and considers it under-used, he concludes the section on ADR in his final report by saying that he does “not recommend any rule changes in order to promote ADR...”. His recommendations are that:
- there should be a serious campaign (a) to ensure that all litigation lawyers and judges are properly informed about the benefits which ADR can bring and (b) to alert the public and small businesses to the benefits of ADR; and
- an authoritative handbook should be prepared, explaining clearly and concisely what ADR is and giving details of all reputable providers of mediation. This should be the standard handbook for use at all JSB seminars and CPD training sessions concerning mediation.
However, for most commercial litigators, his impression that ADR (and particularly mediation) is under-used does not ring true. Having canvassed the opinion of many practitioners, it appears that virtually every dispute issued in the High Court which reaches the stage of disclosure and witness statements involves the parties actively considering whether mediation is likely to assist in reaching a settlement. Parties who unreasonably refuse to mediate may be penalised in costs and the majority of cases a mediation hearing is held.
Up for debate
To that end, it is debatable what benefits would derive from a serious campaign to ensure all lawyers and judges are aware of ADR. Highlighting the benefits of ADR to the public and to small businesses may assist where they act as litigants in person, but in most commercial cases it will have no impact because the parties are legally represented and will be guided by their lawyers with regard to mediation. As far as the judiciary is concerned, the fact that the allocation questionnaire expressly asks whether the parties require a stay for settlement, and such stays are very rarely refused, indicates that the judiciary are alive to the potential advantages of ADR.
The focus of the ADR sections of Jackson LJ’s preliminary and final reports is on mediation as the primary form of ADR. The preliminary report, however, refers to other forms of ADR, such as expert determination, adjudication and Med-Arb. In practice, these other forms are not widely used in commercial disputes. As to whether Jackson LJ’s ADR recommendations will be implemented is difficult to say. The government will not view his report as a political priority.
Culture change
What then is the future for ADR? Lord Justice Jackson suggests that a culture change rather than a rule change is needed. The lack of any proposed alteration to the Civil Procedure Rules will be welcomed by many practitioners. However, for the majority of commercial litigators the change of culture has already happened. It is over 10 years since the Woolf Reforms made mediation a central part of business disputes. While a few practitioners remain resistant to mediation, nearly all recognise it has an important role to play in settling a substantial number of cases. Indeed, those practitioners with less than 10 years’ experience have grown up with ADR being a standard part of the litigation process.
Although the majority of mediations in the early days of the CPR settled on the day of the mediation itself, in recent years there has been an increasing tendency for mediations not to settle on the day, but to act as a catalyst for serious negotiations between the parties which, in many instances, result in settlement in the few weeks or months after the mediation. Overall, mediation has proved successful in a sufficiently high number of cases that, whether or not Jackson LJ’s ADR recommendations are implemented, it is here to stay.
Gavin Foggo is honorary secretary of the London Solicitors Litigation Association & partner at Fox Williams LLP.
Molly Ahmed is an associate at Fox Williams LLP. Both specialise in commercial litigation and dispute resolution
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