Why should I settle my dispute out of Court?

Posted by Nicola Webster

Solicitor

A recent case in the Court of Appeal last month, should remind any person or business who finds themselves unfortunate enough to be party to a dispute, of the importance of considering alternative ways to solve disputes, without recourse to the Courts.

The case highlighted the Court’s increasing willingness to actively manage cases in such a way to ensure that cases are dealt with proportionality and in a way to save expense.  Whilst it remains the case that the Court’s will not force parties to a business dispute to mediate, the recent Court of Appeal case is a clear indicator that the Court will likely take a very dim view on any party refusing to engage in, or seriously consider, alternative means to settling their dispute and the Courts can (and do) impose hefty and severe costs sanctions against a refusing party.

What are the alternatives to settling my dispute out of Court?

There are a number of ways a party to a dispute may consider settling, without recourse to the Courts.  Some of the more common alternatives to settling disputes out of Court include:

Negotiation

Negotiation involves the parties to a dispute trying to reach an agreement to settle matters without having to go to Court.  Parties may try to do so directly between themselves or their legal representatives can negotiate on their behalf and assist in writing up the terms of any agreement reached. These discussions can be confidential and “without prejudice” meaning that they cannot be referred to in later Court proceedings (except in relation to the issue of costs) if the negotiations turn out to be ultimately unsuccessful.

Mediation

Mediation involves the parties agreeing to appoint an independent third party, a Mediator, who will assist the parties in identifying the issues that are disputed and see whether they can help the parties to reach an agreement for settlement themselves.

Adjudication

Adjudication is a common method of dispute resolution in the construction sector; however, contracts in other sectors may require that disputes are referred to adjudication. Adjudications are generally used for settling disputes arising throughout the course of an ongoing contract (for example, interim payments in construction contracts) as a “pay now, argue later” mechanism.

Arbitration

Is an alternative means of resolving a dispute to a Court hearing however, in arbitration, a neutral third party makes a decision similar to a judgment in Court proceedings.  The decision of an Arbitrator is binding on the parties so both parties must agree to arbitrate their dispute.

 

What are the advantages to settling my dispute out of Court?

Cost If it is possible to resolve a dispute by alternative means, if is very often significantly cheaper than going through the Courts. There may also be costs sanctions imposed by the Courts for any party that does not consider, or refuses to engage in, Alternative Dispute Resolution.

Time

Court proceedings are lengthy and it can sometimes take years for disputes to be dealt with by the Courts.  Alternative Dispute Resolution procedures can often be arranged in much shorter periods.

Confidentiality

Many forms of Alternative Dispute Resolution are confidential which is often a key advantage allowing the parties to have frank and open discussions with the other party to a dispute.

Flexibility

Unlike the rigid Court process, alternative forms of dispute resolution can offer the parties flexibility.  The Alternative Dispute Resolution process can allow parties to reach practical solutions without worrying about legal technicalities.

Contact us for advice

Our Dispute Resolution Team offers practical advice to businesses and organisations which may include exploring the alternative options, other than Court proceedings,for the resolution of disputes.

If you would like more information or, you would like to discuss a specific dispute, please contact Nicola Webster on 01227 763939.


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