Chapter 1 - Different Options for Dispute Resolutions
19 September 2025 11:30
1.1 Alternative dispute resolution
Voluntary nature of ADR
- Mediation is voluntary unless ordered by the courts
- If one party wishes to withdraw, both parties must withdraw
- Confidential and without prejudice - court isn't made aware till after liability and damages are sorted
- Arbitration also voluntary - Arbitration agreement can be enforced against party who files court
proceedings, an application to court made to stay the proceedings while arbitration efforts are
ongoing.
Independent Third Party
- Common in ADR, cannot impose solutions (except arbitration) which helps parties be more open
- Advantage is that third party has appropriate industry knowledge and remains neutral
Failure to Engage with ADR
- When dispute arises, solicitors should inform client about ADR, litigation should be a last resort
- Failure to engage a reasonable ADR proposal/attempt may result in cost sanctions
- Solicitors need to confirm they have explained the need to try settle, the options to settle and potential
cost sanctions for refusing an attempt to settle
- Court orders often include directions for ADR to reinforce this
ADR Basics
- Refusal to engage must be served in a witness statement within 21 days of proposal
- Courts regard the following when deciding cost sanctions:
(a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which other settlement methods have been attempted;
(d) whether the costs of the ADR would be disproportionately high;
(e) whether setting up and attending ADR would have caused a prejudicial delay in a trial
proceeding; and
(f) whether the ADR had a reasonable prospect of success
- Court has power to make parties engage so long as It doesn’t infringe their right to proceed with
litigation
1.3 Mediation
Procedure
- Parties agree to instruction of mediator
- Statements from both parties sent to mediator
- All persons engage in frank discussions, allowing mediator to identify disagreements and guide parties
to solution
- Can be in person, over correspondence or online
- If solution is made, binding contract enforced, breach of which can result in party suing
Advantages of Mediation Disadvantages of Mediation
Cost and Speed Inappropriateness in Certain Cases
Dispute Resolution Page 1
, Cost and Speed Inappropriateness in Certain Cases
- Usually cheaper than arbitration or litigation. - - Not suitable when a legal ruling is required (e.g.,
Quicker process; can be arranged at short notice. - on a point of law). - Unsuitable if injunctions are
Skilled mediators often resolve disputes swiftly. - needed. - Not appropriate for cases involving
Reduces lawyer preparation/presentation time if fraud or serious misconduct.
successful.
Flexibility Disclosure Issues
- Parties design their own procedure. - No need to - No formal disclosure process. - Risk of resolving
comply with statutes, court rules, or case law. dispute without full facts. - May result in unfair or
unjust settlements.
Privacy Privacy (as a Drawback)
- Conducted in private; proceedings/outcomes not - If public vindication is needed, mediation
public. - Protects reputation and avoids publicity. - provides no forum for clearing reputation. - Lack
Prevents triggering future claims from others. of publicity may harm parties seeking to prove
non-fault unless a public apology is agreed.
Preserving Business Relationships Ability to Withdraw (as a Drawback)
- Non-confrontational process encourages - Parties can withdraw at any stage before
cooperation. - Easier for parties to maintain ongoing settlement. - Can waste time and money if the
business relationships. - Settlement is mutually agreed, other party walks away. - Often leads back to
not imposed. litigation if mediation fails.
Commercial Reality
- Neutral third party helps parties reach workable,
realistic solutions. - Can agree outcomes beyond court
powers (e.g., discounts on future orders). - Avoids risks
and uncertainties of litigation.
Ability to Withdraw (as an Advantage)
- Parties can leave if unhappy with the process. -
Provides control and flexibility to participants.
1.4 Arbitration
- Once agreed to, parties cannot take advantage of court process
- May arise in two ways
1. The parties may be contractually bound to use arbitration and many business
contracts contain an arbitration clause requiring the parties to submit to
arbitration in the event of a dispute. It is common in certain industries such as
construction and shipping
2. In the absence of such a clause, the parties may agree to arbitration once a
dispute has
arisen and may choose their own arbitrator with the relevant expertise
Procedure
- Written request to arbitrate sent to opponent, includes details of issues and remedy sought
- Parties may choose their own arbitrator
- Once arbitration decision made it is binding on both parties
- successful party to an arbitration can apply to the High Court under s 66 of the Arbitration Act 1996 (as
amended by the 2025 Act) for permission to enforce the arbitration award as if it were a court
judgment
Dispute Resolution Page 2
, Advantages of Arbitration Disadvantages of Arbitration
Cost and Speed Cost Considerations
- Generally quicker than litigation. - May be cheaper - Not significantly cheaper than litigation. -
than court proceedings. - Saves time through less Arbitrators (often experts) must be paid. - Parties
formal procedures. often hire lawyers, especially in high-value
disputes, adding to costs.
Less Formal Procedures Limited Depth of Investigation
- More flexible than court processes. - Fewer - May lack the detailed investigation courts
formalities compared to litigation. provide. - Thoroughness depends on procedures
chosen by parties/arbitrator.
Expert, Impartial Decision-Maker Limited Remedies
- Arbitrator is usually a qualified expert in the relevant - Certain remedies unavailable (e.g., injunctions). -
field. - Ensures decisions are informed by specialist Limits scope of relief compared to courts.
knowledge.
Privacy and Confidentiality Binding Nature of Decisions (as a Drawback)
- Hearings and outcomes remain private. - Protects - Arbitration awards are binding with very limited
reputations, customer confidence, and trade secrets. - rights of appeal. - Can only appeal on narrow
Preserves business relationships. grounds (e.g., error of law). - If arbitrator makes a
mistake, correcting it is very difficult.
Practical Solutions
- Arbitrators can craft commercially realistic
outcomes. - More flexible remedies than some court
judgments.
Binding Decision (as an Advantage)
- Final and enforceable. - Provides certainty and
closure.
1.5 Litigation
Once entered into, cannot withdraw without paying opponents costs
Civil Procedure Rules
- User friendly system of resolving disputes
- Important for litigants in person
- Backed up with a sanction system for non-compliance of court instruction and timetables
The Overriding Objective
- aim is to enable the court to deal with cases justly and at proportionate cost.
- Includes:
(a)ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways that are proportionate to:
(i) the amount of money involved;
(ii) the importance of the case;
(iii) the complexity of the issues; and
(iv) the financial position of each party;
(d) ensuring that the case is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, whilst taking into account the
need to allot resources to other cases; and
Dispute Resolution Page 3
, need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders
CPR, r 1.2 – the court must give effect to the overriding objective when making procedural
decisions; and
CPR, r 1.3 – the parties are required to help the court to further the overriding objective.
Civil courts, parties, court personnel
Civil Courts (England & Wales)
• Most disputes handled by County Court or High Court.
Court Personnel
• Judges
○ District judges: handle interim applications + trials up to £25,000.
○ Circuit judges: hear higher-value County Court cases.
○ High Court judges: hear High Court cases.
• Court managers
○ Senior civil servant running the court office.
○ Receives formal documents (claim forms, defences, etc.).
• Ushers
○ Present in court during sittings.
○ Ensure smooth running of hearings and case lists.
• Enforcement officers (bailiffs & High Court Enforcement Officers)
○ Serve court documents.
○ Enforce orders/judgments to ensure claimants get their money.
1.6 An overview of a civil claim
Stage 1: Pre-commencement of proceedings
• Identify client’s objectives (legal + commercial).
• Gather evidence to assess viability and success prospects.
• Consider costs and ADR.
• Follow pre-action protocols:
○ Identify issues in dispute.
○ Exchange information.
○ Attempt settlement.
• Non-compliance → cost sanctions.
• Send letter of claim → defendant responds with letter of reply.
• Litigation only if no resolution.
Stage 2: Commencement of claim
• Begin with claim form + particulars of claim (served on defendant).
• Defendant must file a defence (served on claimant + court).
• Court issues directions questionnaire → allocates case to appropriate track.
Stage 3: Case management
• Court actively manages case under overriding objective.
• Multi-track: court manages projected future costs.
• Court issues directions (strict timetable):
○ Disclosure of relevant documents.
○ Exchange of witness statements + expert reports.
• Applications possible for specific court orders (e.g., to compel compliance).
Dispute Resolution Page 4
19 September 2025 11:30
1.1 Alternative dispute resolution
Voluntary nature of ADR
- Mediation is voluntary unless ordered by the courts
- If one party wishes to withdraw, both parties must withdraw
- Confidential and without prejudice - court isn't made aware till after liability and damages are sorted
- Arbitration also voluntary - Arbitration agreement can be enforced against party who files court
proceedings, an application to court made to stay the proceedings while arbitration efforts are
ongoing.
Independent Third Party
- Common in ADR, cannot impose solutions (except arbitration) which helps parties be more open
- Advantage is that third party has appropriate industry knowledge and remains neutral
Failure to Engage with ADR
- When dispute arises, solicitors should inform client about ADR, litigation should be a last resort
- Failure to engage a reasonable ADR proposal/attempt may result in cost sanctions
- Solicitors need to confirm they have explained the need to try settle, the options to settle and potential
cost sanctions for refusing an attempt to settle
- Court orders often include directions for ADR to reinforce this
ADR Basics
- Refusal to engage must be served in a witness statement within 21 days of proposal
- Courts regard the following when deciding cost sanctions:
(a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which other settlement methods have been attempted;
(d) whether the costs of the ADR would be disproportionately high;
(e) whether setting up and attending ADR would have caused a prejudicial delay in a trial
proceeding; and
(f) whether the ADR had a reasonable prospect of success
- Court has power to make parties engage so long as It doesn’t infringe their right to proceed with
litigation
1.3 Mediation
Procedure
- Parties agree to instruction of mediator
- Statements from both parties sent to mediator
- All persons engage in frank discussions, allowing mediator to identify disagreements and guide parties
to solution
- Can be in person, over correspondence or online
- If solution is made, binding contract enforced, breach of which can result in party suing
Advantages of Mediation Disadvantages of Mediation
Cost and Speed Inappropriateness in Certain Cases
Dispute Resolution Page 1
, Cost and Speed Inappropriateness in Certain Cases
- Usually cheaper than arbitration or litigation. - - Not suitable when a legal ruling is required (e.g.,
Quicker process; can be arranged at short notice. - on a point of law). - Unsuitable if injunctions are
Skilled mediators often resolve disputes swiftly. - needed. - Not appropriate for cases involving
Reduces lawyer preparation/presentation time if fraud or serious misconduct.
successful.
Flexibility Disclosure Issues
- Parties design their own procedure. - No need to - No formal disclosure process. - Risk of resolving
comply with statutes, court rules, or case law. dispute without full facts. - May result in unfair or
unjust settlements.
Privacy Privacy (as a Drawback)
- Conducted in private; proceedings/outcomes not - If public vindication is needed, mediation
public. - Protects reputation and avoids publicity. - provides no forum for clearing reputation. - Lack
Prevents triggering future claims from others. of publicity may harm parties seeking to prove
non-fault unless a public apology is agreed.
Preserving Business Relationships Ability to Withdraw (as a Drawback)
- Non-confrontational process encourages - Parties can withdraw at any stage before
cooperation. - Easier for parties to maintain ongoing settlement. - Can waste time and money if the
business relationships. - Settlement is mutually agreed, other party walks away. - Often leads back to
not imposed. litigation if mediation fails.
Commercial Reality
- Neutral third party helps parties reach workable,
realistic solutions. - Can agree outcomes beyond court
powers (e.g., discounts on future orders). - Avoids risks
and uncertainties of litigation.
Ability to Withdraw (as an Advantage)
- Parties can leave if unhappy with the process. -
Provides control and flexibility to participants.
1.4 Arbitration
- Once agreed to, parties cannot take advantage of court process
- May arise in two ways
1. The parties may be contractually bound to use arbitration and many business
contracts contain an arbitration clause requiring the parties to submit to
arbitration in the event of a dispute. It is common in certain industries such as
construction and shipping
2. In the absence of such a clause, the parties may agree to arbitration once a
dispute has
arisen and may choose their own arbitrator with the relevant expertise
Procedure
- Written request to arbitrate sent to opponent, includes details of issues and remedy sought
- Parties may choose their own arbitrator
- Once arbitration decision made it is binding on both parties
- successful party to an arbitration can apply to the High Court under s 66 of the Arbitration Act 1996 (as
amended by the 2025 Act) for permission to enforce the arbitration award as if it were a court
judgment
Dispute Resolution Page 2
, Advantages of Arbitration Disadvantages of Arbitration
Cost and Speed Cost Considerations
- Generally quicker than litigation. - May be cheaper - Not significantly cheaper than litigation. -
than court proceedings. - Saves time through less Arbitrators (often experts) must be paid. - Parties
formal procedures. often hire lawyers, especially in high-value
disputes, adding to costs.
Less Formal Procedures Limited Depth of Investigation
- More flexible than court processes. - Fewer - May lack the detailed investigation courts
formalities compared to litigation. provide. - Thoroughness depends on procedures
chosen by parties/arbitrator.
Expert, Impartial Decision-Maker Limited Remedies
- Arbitrator is usually a qualified expert in the relevant - Certain remedies unavailable (e.g., injunctions). -
field. - Ensures decisions are informed by specialist Limits scope of relief compared to courts.
knowledge.
Privacy and Confidentiality Binding Nature of Decisions (as a Drawback)
- Hearings and outcomes remain private. - Protects - Arbitration awards are binding with very limited
reputations, customer confidence, and trade secrets. - rights of appeal. - Can only appeal on narrow
Preserves business relationships. grounds (e.g., error of law). - If arbitrator makes a
mistake, correcting it is very difficult.
Practical Solutions
- Arbitrators can craft commercially realistic
outcomes. - More flexible remedies than some court
judgments.
Binding Decision (as an Advantage)
- Final and enforceable. - Provides certainty and
closure.
1.5 Litigation
Once entered into, cannot withdraw without paying opponents costs
Civil Procedure Rules
- User friendly system of resolving disputes
- Important for litigants in person
- Backed up with a sanction system for non-compliance of court instruction and timetables
The Overriding Objective
- aim is to enable the court to deal with cases justly and at proportionate cost.
- Includes:
(a)ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways that are proportionate to:
(i) the amount of money involved;
(ii) the importance of the case;
(iii) the complexity of the issues; and
(iv) the financial position of each party;
(d) ensuring that the case is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, whilst taking into account the
need to allot resources to other cases; and
Dispute Resolution Page 3
, need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders
CPR, r 1.2 – the court must give effect to the overriding objective when making procedural
decisions; and
CPR, r 1.3 – the parties are required to help the court to further the overriding objective.
Civil courts, parties, court personnel
Civil Courts (England & Wales)
• Most disputes handled by County Court or High Court.
Court Personnel
• Judges
○ District judges: handle interim applications + trials up to £25,000.
○ Circuit judges: hear higher-value County Court cases.
○ High Court judges: hear High Court cases.
• Court managers
○ Senior civil servant running the court office.
○ Receives formal documents (claim forms, defences, etc.).
• Ushers
○ Present in court during sittings.
○ Ensure smooth running of hearings and case lists.
• Enforcement officers (bailiffs & High Court Enforcement Officers)
○ Serve court documents.
○ Enforce orders/judgments to ensure claimants get their money.
1.6 An overview of a civil claim
Stage 1: Pre-commencement of proceedings
• Identify client’s objectives (legal + commercial).
• Gather evidence to assess viability and success prospects.
• Consider costs and ADR.
• Follow pre-action protocols:
○ Identify issues in dispute.
○ Exchange information.
○ Attempt settlement.
• Non-compliance → cost sanctions.
• Send letter of claim → defendant responds with letter of reply.
• Litigation only if no resolution.
Stage 2: Commencement of claim
• Begin with claim form + particulars of claim (served on defendant).
• Defendant must file a defence (served on claimant + court).
• Court issues directions questionnaire → allocates case to appropriate track.
Stage 3: Case management
• Court actively manages case under overriding objective.
• Multi-track: court manages projected future costs.
• Court issues directions (strict timetable):
○ Disclosure of relevant documents.
○ Exchange of witness statements + expert reports.
• Applications possible for specific court orders (e.g., to compel compliance).
Dispute Resolution Page 4
