1. Litigation: Ways to avoid issues
What other methods are there for avoiding
disputes?
Lisa Barge, Partner
4 October 2012

2. What options are available?
Options Advantages Disadvantages
Litigation • Certainty • Time
• Judicial process • Cost
• Can appeal
Mediation • Non-binding unless • May not work
settlement reached • Consensual process
• Can reach
commercial solution
Arbitration • Certainty • Can still be costly
• May be quicker than • Hard to appeal
litigation
Expert • Process can be • Virtually impossible
Determination “designed” to overturn
• Can be quick and
cheap

3. Arbitration and expert determination
If not written into the contract, can only
be used with agreement of both parties.
Factors to consider:
• what type of dispute is it
appropriate for?
• who will determine the dispute?
• how will it work?

4. Mediation – what is it?
“Mediation is a flexible process conducted
confidentially in which a neutral person
actively assists parties in working towards a
negotiated agreement of a dispute or
difference with the parties in ultimate control
of the decision to settle and the terms of
resolution.”

5. What do the Court rules say about
mediation?
The Civil Procedure Rules 1999
Part 26 – Rule 26.4(2)
“Where
• all parties request a stay... or
• the Court, of its own initiative, considers that
such a stay would be appropriate...the Court will
direct that the proceedings be stayed for one
month [to allow ADR to take place]”

6. What do the Court rules say about
mediation?
The sting in the tail: costs
When deciding the amount of costs:
“The Court must have regard to –
• the conduct of all parties, including in particular
 the efforts made, if any, before and during the
proceedings to try and resolve the dispute.”
Part 44 Rule 44.5 (3)(a)(ii)

7. What does the case law say?
Dunnett v Railtrack [2002]
• Railtrack won initial case and the appeal
• Railtrack refused to mediate before the appeal, despite being
discussed by LJ Schiemann
• Court declined to make any order on Railtrack’s application for
the costs of the appeal, applying:
• CPR Part 44; and overriding objective in CPR Part 1
• first time court of higher jurisdiction has imposed costs sanction
against a successful party who unreasonably refused to mediate

8. What does the case law say?
Halsey v Milton Keynes NHS Trust [2004]
• CA on dismissing appeal
• distinguishes between voluntary offers and court recommended/ordered
mediation
• ignoring court recommendation is a high risk strategy
• duty on legal profession to advise on ADR
“All members of the legal profession who conduct litigation should now routinely
consider with their clients whether their disputes are suitable for ADR”
• Court reaffirms confidentiality of the process
“if the integrity and confidentiality of the process is to be respected, the Court
should not know, and therefore not investigate, why the process did not result in
agreement”

9. What does the case law say?
Halsey v Milton Keynes NHS Trust [2004]
Factors to take into account when judging whether a
refusal to mediate is reasonable (not exclusive):
1. nature of dispute
2. merits of cases
3. other attempts to settle
4. whether the cost of ADR would have been
disproportionately high
5. prejudicial delay of trial if ADR attempted
6. whether ADR has reasonable prospect of success

10. What does the case law say?
Burchell v Bullard [2005]
• this important case makes several things clear:
• inter-party offers to mediate must be taken seriously
• a party showing willingness to engage flexibly in mediation problem-
solving may discharge the burden of proving that mediation had a
reasonable prospect of success
• those who ignore an ADR proposal at the pre-issue meeting “can expect
little sympathy if they blithely battle on regardless of the alternatives”
• the fact that a professional adviser advises their client to decline
mediation will not protect that client from a sanction if mediation ought
reasonably to have been attempted

11. And finally...
41st amendment (April 2006)
• ADR to be considered before issuing of proceedings
“litigation to be a last resort.”
• cost determination
“...if the protocol is not followed...Court must have regard when
determining costs.”
“...may be required by the Court to provide evidence that
alternative means of resolving their dispute were considered.”
Part 44 Rule 44.5 (3)(a)(ii)

12. Organising a mediation
Referral Stage Set-up Stage Mediation and
follow-up
Mediator selection Mediation agreement Preparation
signed
• Professional background Confirmation and Final confirmation
timetable
• Sector expertise
• Personal style
Date and venue agreed Document exchange Mediation day

13. How can it all end?
• settlement agreement usually drawn up by lawyers
• settlement agreement should be complete in itself
• may need Tomlin Order/Court Order
• binding once documented and signed
• if no settlement, free to continue to negotiate, arbitrate or
litigate

14. Any Questions?