14th Jun 2022

Alternative Dispute Resolution vs Litigation

It seems these days that the word “mediation” gets a little more airtime. There are legal articles being written about whether not there should be compulsory mediation in the civil courts. The process of compulsory mediation exists in other jurisdictions such as the USA, Australia, and China.

Our senior partner, Paul Berwin, has recently qualified as a commercial mediator. I qualified as a commercial mediator in 2011. My aim at that time was to try and help parties avoid litigation or at least bring litigation to an end as quickly as possible. I was motivated, having been involved representing a party in a couple of mediations. I instantly saw the value of the process. My aims remain the same today.

The phrase “alternative dispute resolution” covers not just mediation but also arbitration and adjudication. But what are these the “alternative” to?

Litigation

ADR (in all its forms) is the alternative to an adversarial system which is designed to give parties access to the courts and seek judicial determination of their disputes. That is a fundamental right and should not be undermined.

However, the reason that alternatives exist is that litigation is a far from perfect process. It requires a determination by the court in relation to whatever dispute is put before it. By its very nature, litigation is adversarial, destructive and costly. There are currently significant delays in our courts, with parties waiting months for simple administrative hearings in some parts of the country.

I am proud, however, to be part of the judiciary on the north-eastern circuit which can boast the lowest waiting times in the country. That said, litigation is still a lengthy process, however you approach it.

Litigation is destructive insofar as it causes people to become entrenched. There is the desire in litigants to put right the perceived wrong. There is a need for a vindication and, certainly at the outset, these feelings are strong. The parties can become more entrenched, and lose sight of the real issues, as litigation progresses.

Litigation destroys business relationships, finances and even marriages. It can become an all-consuming process (in every sense of the phrase). Even when you win, to which there is no guarantee, there will be a cost to doing so because successful party will not recover all costs from the loser.

The costs are not just financial either. You are distracted from running your business, you are stressed and, once you are in the litigation process, you will need to see it through, unless you can find a solution with your opponent.

So, what is the alternative?

Step forward “alternative dispute resolution”. There are many moves in legal circles to remove “alternative” from the description of the processes of adjudication, arbitration, and mediation.

Adjudication and arbitration, whilst being simpler, cheaper, and quicker than litigation, still require a third-party to make a decision on behalf of the litigants.

As Paul Berwin wrote in his recent blog, “mediation is entirely different”.

Mediation is a voluntary and collaborative process. It is about risk assessment – taking an honest look, with the benefit of a skilled mediator, at the strengths and weaknesses of your case, and that of your opponent. It is the way of working through problems in a focused manner, to achieve an outcome which brings a dispute to an end.

Mediation means that you keep one hand on the solution, rather than just handing that over to a stranger, who with the best will in the world, will not know your case as well as you and your legal team. A Mediator will engage with you and help you to find a solution. A judge will impose a solution.

The courts seem to be moving towards compulsory mediation. There are already orders being made requiring parties to consider mediation in appropriate cases. Any party refusing to partake in the process then has to file a witness statement explaining why. There can be cost consequences for the refusing party, if the judge thinks it was unreasonable to refuse.

When you undertake mediation, you can maintain business relationships, save thousands of pounds, be creative in the settlement that you achieve and preserve your sanity from the stressful process that is litigation.

It is right that some disputes need judicial determination and mediation is not a bar to that. It is instead a practical way of resolving a dispute and moving on with your business, rather than having the costly distraction away from it.

When a mediation is successful, even partly so by narrowing the issues, the sense of relief the parties have described to me in the past is overwhelming.

It is never too late to mediate but, as I say to each and every client at the outset of the case, you must consider what a good outcome looks like. If that can be achieved without litigation then the process will be quicker, smoother, and less costly. It might require compromise but adopting a pragmatic approach at the outset has very many benefits.

At Berwins, with the experience that Paul and I bring, we have the right tools to advise you about what is the best option for you at the outset of a dispute.

Andrew Mawdsley is an Associate Director within our Dispute Resolution team, and a Deputy District Judge. If you have a dispute looming or require any advice or support on the above, call our DR team on 01423 542 779.

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