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To Mediate or Arbitrate? Alternatives to Court

Jun 01, 2015

You may have heard recently that mediation has become an increasingly popular way to settle disputes. However, it is not uncommon for a client to come to us without being fully aware of what their best option is for a dispute. Despite the economy being firmly on the rise; cost, time and a lack of enthusiasm for the court process have people looking for alternatives.

We outline a brief description of what they are and where it may be suitable for you if you are considering a dispute as well as deciphering some of the terminology we may use from time to time.

A Round Table Meeting

This phrase is exactly what it says. All parties sit round a table and attempt to negotiate their way to a settlement. Usually parties bring their own legal representatives who are able to guide the discussions to the main points, allowing each side to have advice on their position as the meeting goes along. This is a more informal process than some of the others mentioned below.

Mediation

This is a much more formal process where both parties decide to appoint someone to help them move the discussions along.

Usually, both parties agree together who the most appropriate mediator is, and the costs are shared between the two parties (although not always). There are no set rules on how this process is handled and both parties can bring their solicitors or legal representatives along. Usually, one party sits in one room and the other sits in another room. Legal representatives jointly brief the mediator agreed of the day’s meeting so the mediator has a good idea of the issues.

The mediator’s job will then be to go between the parties rooms on the day of mediation and try to make parties seek the positives and negatives in their side of the dispute, as they do this they try to inch the parties into a settlement. Sometimes this is successful, but the outcome largely depends on the attitudes of the parties. There is no point in agreeing to mediate unless each party is willing to accept some give and take on the overall settlement.

Ultimately, the courts are keen for parties to mediate as it saves time and often money. If the parties cannot agree, they are free to walk away and the mediator does not make any decision based on what he or she has heard on the day of mediation. Some cases where emotions are running high, or the parties do not engage at all, may mean that court is the only route to take.

Arbitration

This is a structured process, which, depending on the subject matter of the dispute may have set rules for different areas. This is a much more formal process that has a similar feel to court. The duty of an arbitrator is to hear all the evidence and then make a binding decision based on the evidence before them. The difference between this and court is that the parties can choose who does the arbitration and still keep it private; rather than relying on the court of allocate a judge in a public hearing. This may suit cases where the topic in question is relatively specialist and the parties wish to have an expert arbitrator appointed. Overall, this can be just as expensive, but may be favoured as an alternative to the court process.

No two cases are the same, and much of the decision process of choosing which alternative to court is appropriate will very much depend on the facts of each case. It is worth noting that we, as solicitors, have seen a significant shift over the past few years in the court encouraging mediation. There is not a free mediation service for claims started in the Small Claims Court.

In addition, the court now has the power to make financial sanctions and penalties against a party who refuses to mediate in the event the matter goes all the way to trial, unless there is a valid reason not to.

In summary, alternative dispute resolution can ease stress, cut the length that a dispute goes on for, and cost less. If you need advice on the services we provide, and how we can help you navigate your dispute to a successful ending, get in touch today. 


Nicola Lucas

About the author

Nicola Lucas

Nicola is a member of our Business Law Team handling all the commercial requirements of her clients such as shareholder agreements and negotiating on commercial ...

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