Other forms of ADR

Senior representatives

Sometimes commercial contracts include a provision that imposes on the parties, in the event of a dispute, a duty at least to attempt to resolve the matter between themselves. Often the provision will specify that it should be a senior representative of each party who attempts such a settlement; it is vital that whoever represents the parties has the authority to agree a settlement or can easily obtain any consent that is needed so to do.

Senior Representatives:

"Any dispute arising out of or in connection with this Agreement shall be referred first, by notice in writing, to a Senior Representative of each Party who shall meet and endeavour to resolve the dispute between them within [20] days of such notice. The joint written decision of those Senior Representatives shall be binding upon the Parties."

Settlements are usually driven by commercial concerns including the risks of litigation/arbitration and can take into account future business opportunities between the parties. In most cases, the process will be confidential and without prejudice to any subsequent litigation/arbitration.

Negotiation will not work if the parties embark upon it merely for the purpose of proclaiming their positions or rights. There must be a genuine willingness on both sides to spend time looking for possible solutions and a readiness to give and take in the interests of an early settlement.

Other methods

In an early neutral evaluation (“ENE”) the parties send submissions to an independent third party, often a senior lawyer or expert, who will then provide an opinion on the likely outcome of the dispute. Although the process is non-binding, it can help parties decide whether to continue to pursue or defend a claim. ENE is available in the Commercial Court, where a procedure exists for matters suitable for ENE to be referred to a nominated judge (not the judge appointed to hear the trial) for consideration. However, there has been little use made of the process in practice.

Other forms of ADR include med-arb, where a mediator becomes the arbitrator of a dispute if the mediation does not lead to a negotiated solution. The arbitrator’s award will then be binding on the parties.

Another form of ADR is mini-trial, where management within the respective companies sets up a formal hearing of the parties, sometimes with the assistance of a neutral chairman.