To litigate or mediate?
- AuthorSarah Canning
That is the question the Courts have firmly answered over recent years, resulting in solicitors having to advise their clients about the risks of failing to utilise alternative means of dispute resolution. Read on to find out more…
When a commercial dispute goes to Court, the Judge will proactively enquire whether the parties have tried to resolve a dispute or narrow the issues between them.
Businesses regularly make commercial decisions leading to some form of compromise. Mediation isn’t therefore, introducing a new concept and is an opportunity to reach a pragmatic solution to a problem that can move those entrenched in a position to an acceptable solution.
Many of the solutions from mediations wouldn’t have been possible within the restrictions of the court room, due to the narrow focus on the issues. Having the ability to flex the terms of settlement enables a skilled mediator to be more creative in achieving a resolution.
Litigation distracts from the day-to-day running of any business, so many directors and executives, discard it at their financial peril. But, of course, very occasionally a dispute becomes a point of principle and the Court rules then are difficult to disregard.
The Courts, supported by a settlement framework set out in the Civil Procedures Rules, actively encourage both sides in a case to consider routes towards Alternative Dispute Resolution (ADR). There are further measures to ensure the mediation message is understood. If a business refuses to mediate, they not only have to explain their reasoning very carefully, but could also face financial consequences, even if they go on to succeed in their case.
The risk is great as they won’t know the outcome of their decision to refuse to mediate until the end of the case, and after both sides have incurred court fees and disbursements.
The Courts will take into account:
- the nature of the dispute
- the merits of the case
- what settlement options were available
- the cost of mediation
- any delays
- the prospects of success
The standard is high, and the emphasis is that mediation is not a sign of weakness but one of strength - knowing what outcome you want to achieve and pursuing that objective through a negotiated settlement. While not every dispute can be resolved, a cost-effective solution is rarely found for either party, win or lose, in the courtroom.
Our Commercial Litigation and Dispute Resolution Team can help your businesses steer a course between taking an aggressive and forthright approach to litigation, and employ pragmatism to reach a resolution in the quickest and most cost-effective manner. Please do contact me on 01604 828282 or by email on email@example.com - I'd be happy to talk to you.