There are very few matters that are not capable of resolution without the Court’s involvement. Given the subsequent cost and risk of utilising the Court process in England and Wales [because we have an adversarial system and so, the successful party is entitled to recover their reasonable legal fees from their Opponent] and the increased Court fee2, there is a big preference for Parties to engage in Alternative Dispute Resolution (ADR).
There are few commercial disputes that are not capable of being resolved without the involvement of the Court. In reality, the involvement of the Court should be the absolute last resort. Business disputes are, primarily, about money. Consequently, it is therefore rare to find two business people who are prepared to simply pursue a lengthy and costly trial without exploring other options to the Court process.
The simple fact is that if the Parties adopt a conciliatory approach rather than an adversarial approach an agreement (that is likely to be better than the one that the Court could order) is more likely to be reached. At Southall Hathaway & Co. we would say that 8 out of every 10 disputes can be satisfactorily resolved by adopting this approach. Weighed up against the cost and risk of pursuing the Court process (outside of the Small Claims track of the Court), the cost of ADR is negligible.
Where the Court hears claims that are above £10,000.00, then the Claimant (in that dispute) has to pay a Court fee commensurate to 5% of the overall sum being claimed. Added to that because the claim is worth £10,000.00 or above, the principle of “Costs After the Event ” applies. This means that the successful Party is entitled to have an Order made entitling them to recover their costs. It does not mean that you do recover those costs. Depending on the financial status of your Opponent, it may well be that even if you win (from whichever position you advanced) you are simply left with a damages and/or a professional costs liability that you cannot recover. Add this to the increased Court fee1 and a lengthy litigation, there is a significant benefit to Parties to consider engaging in Alternative Dispute Resolution (ADR).
In the main, all ADR is undertaken on a without prejudice basis. This means that it is “peripheral”2 to the position that you may have adopted as part of your dispute and enables the Parties to talk more freely than when they are engaged in formal arenas. such as the Court.
ADR takes many formats but the most well-known would be where a Mediator3 is appointed to try and help the Parties reach an amicable and commercial resolution to their dispute. In circumstances where a resolution is not achieved, the very least that the Mediator should do is assist the Parties in narrowing down the points of dispute (which in turn should allow the Parties to reassess their position post Mediation thereby reducing the costs being incurred in respect of the dispute).
Why choose mediation? It is a voluntary process that the Parties are free to engage in at any point that is either practical for them to do so or at the same time as formal proceedings may be active. Whilst it is a voluntary process, where the matter continues and proceeds to a final hearing, the Court does take a dim view on Parties who unreasonably refuse to mediate and often ‘punishes’ the party (who refused to mediate) by way of making a costs order against it.
Weighed against the cost of pursuing matters through the Court, ADR (and particularly mediation) is conceivably cheaper. In addition to cost, mediation offers parties greater flexibility to reach resolutions that they can live with and it can encourage the repair of ‘broken relationships’. Many matters are (or become) personal and so, mediation can often bring the ‘human side’ back to the dispute notwithstanding the commerciality of the dispute.
Southall Hathaway & Co. has a mediator within its team and it is happy to be instructed as the Mediator by Parties to try and bring about a resolution. Southall Hathaway & Co has access to offices that are specially designed for mediations4 and our mediator works on an agreed fixed fee5.
Please feel free to contact the Office for more information on either 0330 024 9643 or [email protected]
- 1 Claims where damages being sought are in excess of £10,000.00 attract an initial filing fee commensurate to 5% of the overall value of the claim. Claimants’ should be aware that there are 2 further non-refundable fees to be paid once the claim is live.
- 2 Without Prejudice means that it is separate / non-detrimental to your open position.
- 3 A mediator is an independent 3rd party who will usually have a good understanding of the subject matter of the dispute. The Mediator’s appointment is done by agreement and the Parties are jointly and severally liable for the costs of the Mediator.
- 4 ehl Commercial Law’s office is specifically designed for Mediations. Each party will have their own room to enable them to discuss matters and take advice as well as a “joint” room for the opening statements. WiFi and complementary food and drinks will be provided.
- 5 The fee which is agreed beforehand and borne joint and severally between the Parties. The fee agreed relates to mediation running between 10:00 – 17:00 after which time an agreed hourly rate will apply.