Methods for Resolving Disputes
Dispute resolution is the process by which legal disputes are resolved either by pursuing a claim in court (Litigation) or by resolving a dispute without going to court (Alternative Dispute Resolution).
Legal disputes can arise in both our personal and professional lives. Disputes can arise in our personal life perhaps with a neighbour, between a landlord and tenant or even with a family member.
Similarly, in business, disputes can arise internally between the shareholders or partners of a business (for example disputes over the management of the business) or externally with another company (for example, for the non-payment of goods and services).
Whether personal or professional, dealing with a dispute can be stressful and time consuming. However, there are several options available to parties to resolve their dispute.
This is when one party seeks to resolve a dispute by making a claim in court. This process is adversarial and there are strict rules governing evidence and procedure. At the end of the case the court will decide the matter on the basis of the evidence and legal arguments presented by the parties.
Litigation can be a costly and stressful way to resolve a dispute and should normally be used as a last resort (although there are some circumstances where it is necessary, for example, if you need to obtain an injunction).
Alternative Dispute Resolution
There are several ways to resolve disputes without having to go to court. As mentioned above these are known collectively as Alternative Dispute Resolution and some of the most commonly used methods are described below:
This is the most common way of resolving a dispute. The parties attempt to reach an agreement to resolve the dispute in an informal way, for example, by letter or with telephone calls. Parties often instruct solicitors to assist with the negotiation process, particularly if the issues are complex or the negotiations involve a large sum of money.
Negotiation does not preclude the parties from entering into litigation. Statements made in an attempt to settle can be made ‘without prejudice.’ This means that these statements or offers cannot be used against the interest of the party that made them if the matter goes to trial.
In mediation parties seek to resolve their disputes in a confidential form with the assistance of a mediator who acts as a neutral third party. The mediator’s role is to identify the areas of disagreement between the parties and facilitate discussions between them. The mediator does not make a final and binding decision but instead assists the parties in reaching an agreement. The mediation process is without prejudice and courts actively encourage parties to enter into mediation before issuing legal proceedings.
In arbitration, a dispute is decided by one or more arbitrators who may be appointed by the parties. The arbitrators are usually experts chosen from a particular field or professional body and are able to focus on both factual and legal arguments. Arbitration is less formal than litigation and can be quicker. For this reason, many commercial agreements include a clause requiring the parties to refer their disputes to arbitration rather than litigation. Unlike negotiation and mediation, the arbitrators make a decision which is binding on the parties. Their decision is final and can only be appealed on very limited grounds.
This is a binding inquisitorial process in which the parties appoint an expert to determine the dispute. This process is commonly used when the issue in dispute is technical in nature or requires a valuation, for example, on a surveying or accounting matter. Often commercial agreements will state that disputes of a technical nature are to be determined by an expert. The expert’s decision is binding on the parties, however, this process is less formal than litigation and arbitration.
If you have a dispute and would like advice as to the best way in which to resolve it, then please contact our Dispute Resolution Team on 0161 832 3304.
By Charlotte Lowe
Charlotte Lowe is a solicitor in the Dispute Resolution Department at Davis Blank Furniss, the Manchester and Glossop based law firm.