When a dispute arises, it is easy to get consumed with the contentious elements and to forget that the “resolution” in Dispute Resolution should always be the goal.
Achieving a “resolution” for a dispute is so much more than going through formal proceedings which can be costly and of course, time consuming; time which could be much better spent on the business.
Hamlins Dispute Resolution team usually view formal proceedings as the last resort. In our view, where possible, the parties should take advantage of the pre-action phase to narrow down the issues in dispute and ultimately try to settle outside of formal proceedings.
Here are a few of the ways in which disputes can be resolved without recourse to formal proceedings:
- Negotiation via informal correspondence or without prejudice meetings
Often overlooked, informal or off the record negotiation is the simplest and cheapest way to resolve a dispute as it often only requires the parties involved. Before a dispute gets escalated to corresponding through lawyers, experts etc., it is often sensible for the two disputing parties to try to have a full and frank commercial discussion about the issues and to reach a compromise as to the way forward. Indeed commercial contracts between parties often suggest this as the first step of a dispute resolution procedure. Agreements reached through negotiation can be formalised in contracts or by an exchange of emails that record the agreement reached. If disputes lawyers are involved early enough, we can advise behind the scenes on points of law and strategy that can strengthen a position or indeed highlight weaknesses in a position. This insight can then go on to facilitate genuine negotiations before incurring the costs of more formal steps.
Mediation can be seen as an extension of negotiation. It is essentially a meeting at which the parties discuss their disputes with the assistance of an impartial third person who assists them in reaching a settlement. Depending on how the parties want to prepare for and conduct the mediation, mediation can be cheap or it can be quite expensive because the parties will share the cost of the mediator’s involvement and it is preferable to have legal representation present. Mediation often takes all day (or sometimes longer depending on the parties) but if a settlement can be reached and at an early stage, it is frequently cheaper than formal proceedings and worthwhile pursuing. The mediation and resulting settlement agreement is private and confidential.
- Expert Determination
This process is similar to mediation in that the parties appoint an independent third party, usually an expert in the relevant industry of the dispute, to assist in resolving the dispute. However, the expert goes further than a mediator and will actually assess the dispute and make a decision as to what they think the outcome should be. The parties will then, depending on whether or not they have agreed to be bound by the outcome of the determination: i) take the expert’s findings into account going forwards in resolving the dispute another way; or ii) be bound by the findings of the expert. Expert determinations are useful in disputes where specialist knowledge is required. They can be quick and the parties know the dispute is being decided by someone who knows their industry well.
The good news is that the above methods are not just reserved for the pre-action phase of a dispute and can be deployed at various times throughout the life of a dispute, even when formal proceedings have been issued. In those scenarios, disputes lawyers – such as the team at Hamlins – will be key in determining the methods to deploy to achieve the best results – but – the “resolution” is always down to the parties.