Do you think that the courts offer the best means of solving disputes?
Written by James Coveney
In this essay I will discuss the system of going to court as well as the alternative methods of dispute resolution (ADR). The ADR that I will be discussing are negotiation, conciliation, mediation, arbitration and tribunals. However, firstly I will discuss the process of taking a claim to court in order to settle.
There are considerable advantages of going to court even thought there are many examples of ADR. Perhaps the main advantage of going to court is that there is a high level of expertise and experience within the courtroom. When taking a civil claim one is guaranteed a qualified judge (District Judge, Circuit Judge or High Court Judge), there is also the opportunity to employ a qualified barrister or solicitor to advocate for you. This adds to the formality of the entire process of litigation and in turn makes any decisions made more enforceable as both parties are likely to have used court as a final straw in resolving their dispute. The fact that a judge is a decision maker in civil courts is also an advantage because he/she is an expert in law as well as being experienced as a lawyer before becoming a judge. The most advantageous aspect of a judge is that the decision made is binding on the losing party. This means that the winning party is far more likely to receive full compensation than if methods such as negotiation and mediation are used. However, if there is a dispute over the decision from either party there is a much wider right of appeal than in any of the forms of ADR. There is a route of appeal from all courts and these routes are more formal than those in ADR, the appeal is always heard by a more senior judge than the one that heard the original case and the appeal can be heard in the Court of Appeal and in some rare circumstances where the case raises an important point of principle or practiceı.
As well as these advantages of litigation there are also many drawbacks to using the courts as a resolution to a civil dispute. Perhaps the most commonly criticised aspect of the courts is the length of time that it can take to get your case heard. Even in the smalls claims procedure there can be long delays, particularly in the not infrequent event of the opposing party asking for extra time. This means that if you want to resolve a matter quickly and hassle free then the courts are not a very good option. As well as the long delays there is also the matter of inconvenience. There is no flexibility available to the parties, cases are always during the day and even in the small claims procedure frequently last about 3 days. This means that the parties involved are going to need quite a lot of time off work, this can discourage people from using the courts, particularly those with small businesses and no fixed income. Another disadvantage is that the courtroom is not private, any member of the public can walk into a courtroom and there is likely to be press coverage in high profile cases. This is particularly bad for public figures or businesses, as they do not want their name connected with anything negative. Due to the public nature and the formality of the courtroom there is also the problem of trying to maintain a relationship with the other party, in negotiation or mediation, for example, the two parties often emerge on good terms, however due to the enforced decision of the court it is very unlikely for the parties to maintain a relationship. Another one of the major drawbacks of litigation is the costs that can arise from taking a case to court. If you wish to have legal representation then you must pay, as there is no public funding available in civil cases. There is also the matter of court fees, as well as this, the losing party will more often than not pay the fees of the winning party and so the losing party is often presented wit huge costs, particularly if the case was in the High Court.
The first example of ADR that I will discuss is that of negotiation. Negotiation is simply an attempt to resolve a dispute between the parties themselves. Negotiation settles the majority of disputes that arises in everyday life and is also the first port of call in all disputes. The major advantage of negotiation is that it can be done anywhere and at any time and it need not be public in any way. Also, there is no cost involved in negotiation, as all that it involves is a conversation either in person or in some other way (e.g. phone, e-mail etc.). Even if the two parties cannot reach agreement through negotiation it is often the case that their solicitors will negotiate a settlement on their behalf, if this is the case then the cost is still considerably less than any other form of dispute resolution. This is mainly due to the fact that negotiation is often a very quick process as most parties are eager to settle a dispute without going to court or wasting any of their free time; this is yet another advantage of negotiation as the length is dependant on the parties themselves, if they want to reach a quick settlement then that can usually be done. If a case does end up going to court then there is still no reason why negotiation should stop. In fact, negotiation is encouraged by the legal system as was shown in the Woolf Report, which recommended more use of ADR and stated that going to court should be a last resort. Also, after the Civil Procedure Rules 1999 civil judges are encouraged to try and help the parties come to a decision during the case if he feels it appropriate. Judges are also allowed to stayı proceedings and let the two parties try and settle the matter one last time themselves. This has been quite successful and as well as this there have been many cases where a dispute is literally settled at the door of the court. The final advantage of negotiation is that it allows a good relationship to be maintained between the claimant and defendant. The reason for this is that the two parties reach an agreement therefore the outcome is not disputed by either party, this is particularly useful for business associates and other work related disputes.
There are, however, disadvantages that arise from the process of negotiation. None more so than the simple fact that the parties must be cooperative. If the dispute leaves the parties on bad terms or especially if there is a counter claim made by the defendant it is often the case that the two parties simply cannot agree. This means that negotiation cannot occur or be effective in any way. One could argue that negotiation is only really applicable in matters where there is no real dispute or where there is clearly one party that would win in court. Another disadvantage that arises from the informality of negotiation is that there is no binding decision made. If the two parties appear to agree on a settlement there is no legislation stating that the agreement must be honoured. However, one must note that a party who fails to negotiate, even if he/she wins, is often not rewarded greatly by the courts as judges try to encourage the use of ADR. Perhaps the most worrying aspects is that a number of cases drag on for years, only to be settled at the door of the court, one could argue that if conciliation or mediation was used then the influence of a third party may have helped the parties agree much earlier. The fact that there is no voice of reasonı in negotiation means that the parties will often be stubborn in their arguments until the last minute when one agrees in fear of having bigger costs in court.
The next form of ADR that I will consider is that of mediation. This is when a neutral third party helps the parties to reach a compromise. The role of a mediator is not to suggest solutions, but to see how much common ground there is and to carry offers confidentially between the parties. The major advantage of mediation is that the parties make the decisions about formality, time, place etc. Mediation can either be a simple discussion involving the three parties or it can be in the form of a mini-trialı. This is when each case is presented to a decision-making executive from each side and a mediator. This can help a dispute to be resolved and even if it doesnıt do that it narrows down the issues. This is also better as it allows decisions to be based on commonsense and compromise rather than on the letter of the law. Another advantage is that when businesses use mediation it makes it easier to maintain a good relationship and also may include agreements about the conduct of future business between the parties. Another advantage that comes from the less formal approach taken by mediation is that it completely private, no members of the public are involved and the case gets no press coverage, this is particularly good for businesses as they would not want their name to be tarnished. Another advantage of the mediator himself is that often he will be experienced or expert in the field of the dispute, this means that he will know who is more likely to win the case and therefore can make suggestions to each party that will help resolve the dispute more quickly. This is better than negotiation as the parties are given an idea of who has the stronger case and can talk to someone who knows about the field in dispute.
Obviously, there are aspects of mediation that make it less appealing or effective in resolving disputes. Perhaps the worst of these is that any decisions reached in mediation arenıt legally binding, this means that even if the two parties appear to have reached a compromise there is no reason why one party shouldnıt change his/her mind and refuse to agree. This means that, as with negotiation, the two parties must be able to cooperate in order for the dispute to be resolved. Due to the fact that the mediator has no legal power and cannot enforce decisions the ultimate decision requires the cooperation of the two parties. Due to the fact that mediation involves a more formal process than negotiation it inevitably takes longer too. Although the time and place of the mediation is very flexible there is still the fact that the two parties must cooperate with the mediator, as well as this there is the fact that the two parties must come to agreement and this is often a long task. For many people, the biggest disadvantage of mediation would be that you have to pay the mediator for his/her services. This is not as expensive as litigation, conciliation or arbitration; however one could argue that it is still too expensive considering the amount that the resolution depends on the two parties agreeing between themselves. Another factor is that mediation can often last a long time; this means that even if the hourly rate is not that much for a mediator the cost can still be high by the time that the dispute is resolved. Also, there is no guarantee that the dispute will ever be resolved through mediation, this means that you may have to go to court after trying mediation, this is perhaps one of the main reasons that mediation is not used more often as there is the risk of paying for a mediator and then for a lawyer and court fees.
The next form of ADR is conciliation; this is very similar to mediation except for the fact that the third party plays an active role in trying to resolve the dispute. A conciliator will suggest grounds for compromise as well as the possible basis for settlement. The advantages of conciliation are very similar to those of mediation; however there are advantages that arise from the conciliators role as a more active third party. The conciliator will usually be experienced in the field in dispute and therefore can play a major role in helping to resolve it. This means that the conciliator will often be able to assess the case and tell the parties the strengths of their case and who is more likely to win. One could argue that once the two parties are aware who would win if the case went to court then the grounds for negotiation would be much stronger. As a result of this conciliation is often a quicker process than mediation as one party is likely to be in a stronger position than the other. Therefore, even though the fee of a conciliator is higher than that of a mediator, it may often be the case that there is very little between the eventual costs of using mediation or conciliation. One could argue that, combined with the quicker resolution of cases, conciliation is a more convenient and cost effective method of solving a dispute than mediation. As I have already stated conciliation holds many of the advantages that I discussed with mediation above. There is still a very flexible style, time and place available to the parties as well as the fact that it is completely free from public interference.
As with the advantages, the drawbacks to conciliation tie in closely with those of mediation. Firstly, there is still the fact that, due to the more formal process, conciliation can take longer than negotiation between two cooperative parties. Once again, conciliation requires cooperation between the two parties; even though the conciliator plays a more active role the fact that he cannot make the final decision means that resolution ultimately requires a certain degree of cooperation between the two parties. As I have already mentioned, the fee of a conciliator is higher than that of a mediator and this can be considered as a disadvantage as well as an advantage. Although, in general, conciliation is a quicker process than mediation there are still cases that last a long time. This is due to the fact that some parties simply will not cooperate, if this occurs the conciliation fees can be very expensive, this is then added to the fees from taking the case to court or to an arbitrator, which would be a lot of money for the eventual loser. Finally, there is the fact that the conciliator has no legal power to make a binding decision, therefore an agreement can be reached but there is still no obligation for the losing party to pay. This can also mean that there is a lot of inconvenience and expense that arises from the process.
Arbitration is when the two parties agree to let a neutral third party make a binding decision on their behalf. This is quite a widely used form of ADR and one should note that in many contracts a Scott vs. Avery Clause will exist. Many companies use this as it stipulates that any disputes must be resolved via arbitration. The reason that companies include this clause in contracts is that it stops any disputes from going to court and letting their name become exposed in public. This is the first advantage as the matter is dealt with in private and therefore there will be no press coverage of your case. Another advantage is that the arbitration process is very flexible. The two parties can arrange the time and place so that it does not conflict too heavily with their lifestyle. As well as this the two parties can agree on the arbitrator himself. The three choices are a technical expert, a lawyer or a professional arbitrator, this is better than litigation as you can choose someone particular to the field of dispute. Finally, the procedure itself is flexible, this can range from an adversarial hearing to a submission of evidence to the arbitrator, usually the latter is chosen so that there is little hassle for the two parties and the dispute can be resolved as quickly as possible. Also, if there is a question of quality within the case a technical expert can be used to decide the matter rather than the expense of calling witnesses or explaining it to a judge or lawyer. This saves time and money for the parties. As I have already stated the arbitration process is usually much quicker and cheaper than going to the courts, this is an advantage to the parties as they get the binding decision just as they would in court, however it does not come at as much expense. The final advantage is that the parties need not be cooperative, they can simply agree to arbitration, submit their evidence and let the arbitrator make the decision, this means that there is no question of agreement or negotiation involved.
Of course, there are disadvantages to the process of arbitration. The first of these is in the event of an unexpected legal point arising during the case. If this happens it is quite possible that a lawyer is required to deal with this point, adding cost and time to the whole process. A lawyer can be expensive to hire as an arbitrator, but it can be the case that a professional arbitratorıs fees are even more expensive. As well as this the cost of an adversarial hearing is also expensive. This means, that although the two parties have a choice of style they may have to opt for an informal hearing simply because of cost. Another downside to arbitration is the limited rights of appeal that exist. The Arbitration Act 1996 s.68 stipulates that a decision can only be challenged on the grounds of serious irregularity in the proceedings or on a point of lawı. This means that in the large majority of cases the arbitratorıs decision is final and the losing party must pay the award given by the arbitrator. Finally, the delays for commercial and international arbitration are sometimes nearly as long as those in the courts if a formal hearing is opted for. This means that the cost and time will not be that different than if litigation was used, however the expertise and rights of appeal are not as great as in the courts. As a result of this many companies have used alternative methods such as the Centre for Dispute Resolution.
The final method of ADR is a tribunal. This is different from the other examples as tribunals operate alongside the court system. This means that instead of having the option to go to court the parties have to go to a tribunal to solve a dispute. There are domestic and administrative tribunals. Domestic tribunals are in-houseı tribunals such as the Law Society or Bar Council; administrative tribunals enforce rights, which have been granted by social and welfare legislation. A tribunal is heard by a technical expert from each side and a legally qualified chairman. The tribunal system is more formal than arbitration but less formal than litigation. The parties are encouraged to find lay representation and therefore legal funding is once again unavailable. As the tribunal process is less formal it is also far more cost effective than using the courts, as legal representation is not often used and also an order for costs is very rarely issued to the losing party. This means that the losing party does not have to fear for the colossal costs that he/she would face after losing in court. However, there is a disadvantage that arises from this. If one party cannot afford legal representation but the other can then there is an imbalance between the two parties and often the party without representation has a much lower chance of winning. Tribunals are also, in general, dealt with more quickly than in the courts. This means that the parties will have to take less time off work and that their lives will not be disrupted as much as it would in a longer hearing. Finally, the tribunal procedure is far simpler than going to the courts. Most tribunals are heard in private with the exception of industrial tribunals. This means that character of individuals or companies is not tarnished by the press. The process is also far more flexible than litigation and tribunals arenıt bound by strict rules of evidence. This makes the process less intimidating and stressful for the parties involved, as the seriousness does not appear too great.
There are also flaws in the tribunal process; the first is that not all tribunals are dealt with quickly. In fact, due to increased work load and part time lay members tribunals have been known to last as long as a case going to court. This can be highlighted in the extreme case of Darnell vs. United Kingdom where the final decision was made 9 years after the proceedings for unfair dismissal began. There is also the fact that in cases where one side is not represented the chairman does not always fulfil his role. The chairman is meant to uptake an inquisitorial role but it has been found that in 1 out of every 6 cases the conduct was open to serious criticism; this means that the unrepresented party is not given the appropriate access to justice that he/she deserves. Finally, there is the problem that in many tribunals there is limited or no rights of appeal. As well as this not all tribunals give reasons for their decisions, which means that appealing is made even harder. One could argue that as tribunals are compulsory a person should be entitled to full rights of appeal just as someone convicted of a criminal offence is.
In conclusion I would say that the courts are the best way of solving disputes. This is because there are legally qualified judges, wide rights of appeal and the chance to gain public funding. However, this is only true if the two parties have available funds to go into a court case. Also, I believe that negotiation should be the first resort in all cases. If the two parties can come to an agreement via negotiation then it is ideal as there is no cost, hassle or delays. However, in the cases where there is no cooperation between the two parties then I believe that going to court is the best and most effective way to solve a civil dispute. That said, it would also be better if the parties lawyers were able to negotiate on their behalf or to advise their client to settle as their case is weak. Going to court, in my opinion, is the best option after the failure of negotiation.
February 2004.