‘Do you think that the courts offer the best means of solving disputes?’
Written by Jayna Shah (April 2007)
Introduction
Litigation is when all parties involved in a dispute go to court and a judge hears the case and decides on a resolution. Litigation is not the only method of dispute resolution, there are four other methods of dispute resolution, and these are: negotiation, mediation, conciliation and arbitration.
Negotiation is when the parties try to resolve the dispute between themselves. Mediation is when the parties try to resolve the dispute with the help of a neutral third party. Conciliation is very similar to mediation, but the only difference is that the neutral third party makes suggestions for possible resolutions. Arbitration is when the neutral third party makes a binding decision on behalf of all the parties involved.
Advantages of the courts
Even when a case is halfway through court proceedings the parties can continue any other method of dispute resolution. This is good because it increases the chances of the parties discovering a solution earlier, saving time which may have been spent in court trying to come up with a solution.
The court can ‘stay’ proceedings if it believes the parties will be successful when trying an alternative method of dispute resolution. This can allow the courts to use this time to hear cases which actually need the court to resolve a dispute. Also, the time spent in court can be reduced as the alternative method of dispute resolution can narrow the matter down making it easier to resolve therefore needing less time in court to find a solution.
The use of arbitration and litigation will end with a binding decision. A binding solution made through arbitration can be enforced by the courts. Appeals can be made against the decisions made through litigation and arbitration but these are limited to things such as a point of law.
The settlements/damages awarded by the court are likely to be higher than the amount awarded by an alternative method of dispute resolution, this is because the court will state a sum it believes to be suitable regardless of whether the party who has to pay it out can afford it of not. Unfortunately, this usually makes it more likely that the party will not see some, if not all, of the money awarded by the courts.
Legal aid is limited to certain types of cases and to certain types of people so not everyone will be entitled to it. However the only form of dispute resolution it is available to is litigation.
Disadvantages of the courts
The court process is very formal and can make some people feel uncomfortable, whereas, the alternative methods of dispute resolution are more informal.
A major problem with the courts is that they are very expensive. A case can cost anything from £100,000 to £1million for complicated cases. Compared to the courts, the other methods of dispute resolution are much cheaper, for example a professional mediator can cost about £1,000 to £1,500.
All four methods of alternative dispute resolution are private this means the public and press can’t be there when the parties are trying to resolve the dispute, unlike the court process which allows the public and the press to watch certain court proceedings. This stops businesses receiving a bad name/reputation due to the press and public. However, this could be an advantage of courts, because if the public don’t know about problems with businesses they may continue doing business with them and a similar dispute could arise, this is unlikely if the original dispute was made public, as the business is likely to change its ways in order to stop the dispute from arising in the future.
The time taken by courts to resolve a dispute can be years, also when stretched out by the parties involved the other methods of dispute resolution can take just as long. However, the alternative methods of dispute resolution are usually quicker to come to a solution.
The adversarial conflict of the court room, when one party is made the ‘winner’ and the other the ‘loser’, makes it harder for the parties, if businesses, to do business in the future.
Some parties use alternative methods of dispute resolution during court proceedings, which not only adds to their total costs, but can also mean that they come to a settlement before the court hearing, which has wasted court time, which could have been used for more suitable cases. Also, the parties involved will still have to pay for court proceedings even though they did not come to a solution through the court.
The court is very inflexible. This is because how the proceedings are to take place are decided by the court and for example, there are sometimes deadlines set for when evidence is to be submitted, when the court proceedings are to take place, and where the proceedings are to take place. This can be very inconvenient for the parties involved as they may have to take time off work, if self-employed arrange for someone to cover or close the business while proceedings are going if nothing can be arranged, maybe losing important business, and maybe even having to arrange childcare.
Sometimes experts will be needed to give evidence/advice for the judge to come to a solution. These experts will be paid for by the parties involved. The experts can also take up quite a long time of court proceedings as the majority of evidence will have to be explained.
Many commercial contracts contain a Scott v Avery clause. When a dispute arises over a contract which contains a Scott v Avery clause the courts can refuse to deal with the dispute.
Conclusion
I don’t think the courts offer the best means of solving disputes mainly because of the high costs involved but also because of the fact that court proceedings can be seen by the public and press which help give businesses/people a bad name/reputation. It also takes a very long time to come to a solution through litigation and is also very inconvenient.
I think the best means of solving disputes is through arbitration because it can be much cheaper and quicker than the courts as long as the parties do not complicate matters, they are also heard in private and is much more flexible than the courts, as it can be arranged somewhere which is ‘neutral and comfortable’ and out of working hours.
Bibliography
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