ADR

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ADR

Alternative Dispute Resolution 

The civil justice system is complex and slow.

Most disputes settled out of court by using one of the alternatives to court action.

These alternatives are usually referred to as ADR and are becoming popular as a means of avoding the expense and pain of litigation. 

ADR takes a number of different forms:

  • Arbitration (most formal, legally enforceable)
  • Conciliation
  • The Mini Trial
  • Negotiation
  • Mediation 
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Introduction of ADR

ADR is encouraged by Part 1 Civil Procedure Rules 1998, where part of judge's role om active case managament to encourage ADR where approporiate. 

Only used in civil cases as too much at risk to justify an alternative in criminal cases.

Now seen as compulsory step rather than alternative. 

There have been examples where parties have been punished with an adverse costs order for refusing to co-operate in a method of ADR.

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Arbitration

The parties agree to let an independent arbitrator make a binding decision. 

Many contracts include a Scott v Avery clause (named after a case in 1855)  to agree pre-cobtractually to arbitrate in event of dispute. 

Most formal type of ADR.

Used in:

  • commercial and industrial relations matters- many organizations automatically included arbitration clauses in their contracts.
  • holiday brochurers a dispute between tour operators and consumers, the ABTA will resolve dispute by arbitration. 
  • Industrial relations between unions and company. If union takes strike actiom nefore going to arbitration it's in breach of contract. 

When people agree to use arbitration the courts normally refuse to allow them to take proceedings in court instead of arbitration.

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Arbitration legal authority

  • s1 Arbitration Act 1996.
  • s5 Arbitration Act 1996
  • Institute of Arbitrators. 
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The arbitrator

  • Chosen by parties.
  • Should have expertise in dispute
  • Shouldn't be connected with either party.
  • Often laywers, particularly in disputes involving interpreting a contract clause and knowledge of law required.
  • Can be non-lawyer who's technical expert in area concerned e.g. president of professional association. 
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Duties of arbitrator

Procedure governed by Arbitration Act 1996.

Provided both parties agree, normal rules of evidence can be dispensed with.

Has wide powers to examine witnesses and inspect documents- can compel witnesses to attend hearing and evidence given on oath and law of prejury. 

Not bound by strict rules/precedent, he's bound by principles of Natural Justice- guarentees basic safeguards in arbitration procedure.

Decision known as 'Award' and can be enforced like court order e.g. contempt of court. 

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Arbitrators appeal

Right to appeal to HC but limited corcumstances e.g. breach of natural justice/parties give leave to appeal/court itself give leave to appeal.

Difficult to appeal because arbitrator doesn't necessarily arrive at conclusion in same way a legally trained person so legal criticism of decision are easy. 

Therefore, losing parties wouldn't consider arbitrators award as final.

Basic idea of arbitration is to conduct commercial disputes with speed and efficiency then constant appeals would undermine whole point of arbitration. 

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Conciliation

Similar to artbitration, difference: third party only offers non-legally binding opinion that may lead to settlement. 

Third party plays more active role in proceedings in order to push them in direction of settlement. 

Used in: Industrial disputes.

Under Employment Protection (Consolidation) Act 1978 the Advisory, Conciliation and Arbitration service (ACAS) is given task to try resolve dispute before industrial action taken/before matters reach industrial tribunal. 

ACAS conciliation officers act as intermediaries for parties, advising each party on strength/weakness of their cas and try to effect a settlement. 

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Conciliation

Similar to artbitration, difference: third party only offers non-legally binding opinion that may lead to settlement. 

Third party plays more active role in proceedings in order to push them in direction of settlement. 

Used in: Industrial disputes.

Under Employment Protection (Consolidation) Act 1978 the Advisory, Conciliation and Arbitration service (ACAS) is given task to try resolve dispute before industrial action taken/before matters reach industrial tribunal. 

ACAS conciliation officers act as intermediaries for parties, advising each party on strength/weakness of their cas and try to effect a settlement. 

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Conciliation legal authority

ACAS

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Mediation

The parties are encouraged to come to their own settlement with help of third party neutral mediatior who acts as a 'go between'.

Informal form of ADR.

Normally third party discuss issues with both sides in seperate rooms and discuss and negotiate areas of conflict and hopefully identify and settle certain issues. 

Used in:

family disputes (as using court system is unsuitable for divorce).

property and custody disuputes, making who process very traumatic and remarkable expensive.

In any case, Solicitors Family Law Association has pointed out womens earnings ability may be hampered by demands of child care, women may need services of solicitor to get fair financial deal- SFLA said reforms may be 'a rogues charter for unscrupulouse husbands'. 

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Mediation legal authority

  • Dunnett v Railtrack
  • Halsey v Milton Keynes NHS Trust
  • s13 Family Law Act 1996
  • new government proposals. 
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Mini trial

Used in commercial disputes between companies.

Panel of 3- one independent and neutral, others executive from each of companies involved.

Panel hear short presentation from each side's case and two executives will ten, with neutral advisors help, try find solution that satisfies both.

Solution reached more likely to be based on commericial realism than law.

In 1991 the Centre for Dispute Resolutions set up in London.

It has backing of CBI and deals with commercial disputes including claims involving patents and shipping.

ICI, Reed International, Sony, Ciba-Geigy and almost all major London law firms are members of Centre.

Centre offers variety of ays of resolving disoute, most common method is mini trial. 

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Negotiation

Resolving dispute between parties themselves; can involve solicitors. 

Basic: Involves reutrning faulty goods to shop

Complex at most: involves solicitors and settlement offers being exchanged. 

Simplest form of ADR whereby parties reach agreement themselves, often each party prepared to give up part of claim. 

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Negotiation

Resolving dispute between parties themselves; can involve solicitors. 

Basic: Involves reutrning faulty goods to shop

Complex at most: involves solicitors and settlement offers being exchanged. 

Simplest form of ADR whereby parties reach agreement themselves, often each party prepared to give up part of claim. 

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Conclusion

In review of civil justice system, Lord Woolf made many references to ADR.

Suggests making legal aid available ro organisations that provide mediation services.

Courts should be encouraged to direct parties to ADR bodies if there's a satisfactory alternative to court system- at preliminart court hearing parties would be asked whether they've considered ADR bodies and party could be penalized for unreasonablu refusing ADR.

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Important cases

Dunnet v Railtrack 2002

  • Claimant, Ms Dunnett, who owned field next to railway line where she kept horses and Railtrack replaced existing gate which automatically shut by itself leading from field to line, with a gate that didn't shut automatically. Gate left open and 3 horses strayed on line and killed. 
  • Dispute about liability was taken to COA and Railtrack won on technical legal grounds and appeal dismissed.
  • However, hearing at which permission to appeal granted, court stated parties should attempt mediation and Railtrack refused because they believed they would win case at appeal so they were denied cost.
  • Denied cost because Railtrack refused ADR, contrary to the requirements of Civil Procedure Rules. CPR 1.4 states court should encourage parties to use ADR and CPR 1.3 states parties required to help court in furhtering objective. 
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Important cases

Halsey Case 2004

Following claim by Mrs Halsey against Trust after husband died in hospital, Trust defended actions and refused to mediate but Trust won case so her solicitor made claim for recovery cost as Trust refused ADR and COA refused recovery costs.

Decision was established 2 principles:

Compel person to avoid trial by going to ADR is denial of right to fair trial established A6-HRA98.

Costs should be recovered from unwilling party but only if party acts unreasonably. (party felt justified in taking to court to suceed isn't sme as refusing to mediate).

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Important cases

Mitchell v News Group Newspapers 2014 CA

Andrew Mitchell sued Sun over reportd that he had called the police officer a 'f* pleb'.

Sun filed costs budget int ocourt in good time, amounting to approx £5000,000 but claimants solicitors failed to meet deadline for filing costs, contrary to civil procedure rules. Failing to do this claimant's solicitors jeopardized case in that they could only claim for courts cost and appeal ruling was confirmed.

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