The third module of the Virtual Programme focusses on your knowledge of the standard commercial dispute resolution options. The two main dispute resolution options are the Alternative Dispute Resolution (ADR) process, and the court led process (litigation).
Your task is to leave a voicemail to one of your Project Jewel colleagues advising her on which dispute resolution option is most suitable for client based on their shareholder’s agreement criteria. Before leaving your voicemail, I suggest that you first accomplish the following objectives:
- Identify the differences between Alternative Dispute Resolution (ADR) and the court led process (litigation). This includes being aware of the pros and cons of both options.
- Use your reasoning skills to decide which form of dispute resolution would be most suitable for your client.
Alternative Dispute Resolution (ADR):
ADR is a collaborative procedure used to resolve disputes between parties in conflict. The three main branches of ADR are negotiation, mediation and arbitration (these shall be explained later). However, ADR can also offer some more niche resolutions depending on the dispute in hand.
- Cost/Time efficiency: In the majority of cases, ADR is a cheaper and faster option than the court based process;
- Maintaining the equilibrium: ADR has the ability to settle disputes without ruining market reputation and commercial relationships. This is due to the fact that ADR is usually a private process and thus matters are not publicly displayed in court;
- Flexibility: ADR is an umbrella term for several different types of dispute resolution. Therefore, ADR provides a large variety of settlement options that are extremely useful in complex disputes that may require the problem to be approach from several angles. Another point worth highlighting is that ADR often allows the parties to have a significant amount of control over dispute resolution proceedings. For example, the arbitration process gives the parties the freedom to chose who will be the arbitrator and how the procedure goes ahead. The litigation process is nowhere near as relaxed.
- Lack of legitimacy: Most ADR solutions are non-binding (except those concluded via the arbitration process). This is because ADR is largely exercised between private individuals rather than the courts and most private individuals do not have the power to make binding judgments. In turn, this often makes it more difficult to enforce damages or awards as no official judgement has been made forcing the parties to comply.
- Lack of disclosure: The court based process requires all evidence to be disclosed, ADR does not. As a result, ADR runs the risk of the wrong decision being made or the scales of justice not being balanced fairly. However, as the arbiter must be a neutral third party, it is unlikely that they will only allow evidence to be disclosed that favours a particular party.
- Not always suitable: Although ADR may be suitable for an extremely wide range of civil disputes, it is not a suitable solution for every conflict. For example, if X was to wish for a prohibitory injunction against Y, then ADR would have to take a backseat and let its courtroom counterpart deal with the matter. This is becausean injunction can only be granted by the court. Similarly, if a case arose concerning no valid dispute (eg; a debt collection matter), then ADR would not be an effective solution either.
Below, I have created a table setting out the key features, pros and cons of ADR, and how they compare to the court led process (litigation).
It is also worth noting that Civil Procedure Rule 1.4(2)(e) encourages parties to first exhaust any ADR options available to them before proceeding to the courtroom. This is due to several reasons:
- to ease the courts’ workload;
- to save money, time and other personal expenses;
- the judge may not have the specialist knowledge required to fairly settle a particular dispute; and
- the majority of disputes could be easily solved outside of the courtroom.
So, what if a party refuses, ignores or frustrates the mediation process?
Under CPR rule 44.2, the court has the discretion as to which party/parties shall pay the costs, when and how much. When deciding this, one of the main factors that the court must consider is the parties’ conduct during the mediation process.
If you would like to read more about this topic, then take a look at this article.
Keeping in mind that you are meant to be wearing the shoes of a Magic Circle lawyer, staying professional is of the utmost importance. The module equips you with useful guidance about how to leave a voicemail (which I strongly suggest you to take a look at). In the meantime, here are some of my own tips for leaving a voicemail:
- Be concise. While it may be tempting to explain the A-Z of your voicemail subject, being direct and succinct will allow the recipient of your voicemail to understand the main message of what you have to say without allowing you to go off on a tangent. Remember the golden rule of leaving voicemails: if the subject matter is one that is too long or not suitable to be discussed via voicemail, then just politely ask the recipient to call you back.
- Prepare what you are going to say – having a few notes written in front of you won’t hurt! In my experience, I have found that the more prepared you are, the smoother your message will sound and the less likely you’ll be to make mistakes or leave a confusing message.
- Be confident. Lawyers are often trusted with matters that are very private and important to both their client and firm. A confident tone will not only reassure your recipient, but also make them feel like you are dealing with the matter correctly and professionally. This can make a huge difference to some clients.
This has been my favourite task so far! As I aspire to work in dispute resolution when I am older, I found this module to be the perfect opportunity for me to develop my knowledge of ADR and litigation… call me biased, if you may!
It is important to remember that whilst much of a lawyer’s day is taken up by writing emails or drafting documents, it is also crucial for a legal professional to be know how to communicate with their clients and colleagues. Face-to-face interactions are pretty much guaranteed in any lawyer’s working day!
As a final note, this task has been different from the rest as it has allowed me to develop personal communication skills that many people may take for granted. I have learnt that there is always room for improvement… even in the everyday act of leaving a voicemail!