By Sir Paul Girvan
It is a sad reality of life that people get involved in disputes. The resolution of such disputes has traditionally involved litigation and use of the courts. However, while the courts should be capable of resolving disputes expeditiously and cost effectively, the reality is that their process is time consuming and often inefficient. Furthermore, for the parties involved, it is a stressful, often frustrating experience, made all the more difficult by being conducted in the public eye. In recent times the benefits of alternatives to court based litigation have been recognized. These alternatives include mediation, arbitration, adjudication and early neutral evaluation.
Much has been said about the values of mediation (stressing, for example, its confidentiality, the creation of a non-antagonistic context for discussion of disputes and the reduction of confrontational attitudes). For a mediation to work, several elements must be present:
- The parties must be willing to accept the benefits of compromise.
- The legal representatives must recognize that the process is not about
declaring a winner and a loser but rather about finding a resolution that is
fair to all.
- The mediator must have a command of the facts and issues in the dispute
and an understanding of the applicable law so as to help steer the parties
away from the rocks of irreconcilable dispute and towards safe waters
where resolution is possible.
Some disputes cannot be resolved by mediation. Typically, these occur where factual issues are irreconcilable or legal issues are too important to compromise. In such cases, arbitration offers clear and obvious advantages to litigation.
It is commonly believed that arbitration is limited to those cases where it has been required by a pre-existing contract. That is not so. Any dispute may be arbitrated by agreement among the parties. Practitioners should give serious consideration to it as an alternative to litigation because of the advantages it offers. Consider the following:
First, the proceedings are private and confidential.
Second, the parties can choose their arbitrator and thereby secure someone with the legal skill and expertise suited to their dispute. In this way, the parties can avoid the lottery of a court system that may not provide them with a judge with the right experience.
Third, the case will be efficiently progressed because the arbitrator will manage the dispute by securing, among other things, an early agreement as to the law, rules and procedures to be used, the timetable to be followed and the date of the hearing.
Fourth, if there are any pre-hearing disputes to be resolved, the arbitrator will resolve them through an expeditious but informal process.
Fifth, the arbitrator’s time is exclusive to the parties so that hearing dates and scheduling are certain. There will be no adjournments with wasted witness expenses because, unlike the courts, there will be no competing cases or other business to delay the hearing.
Finally, while it is right to acknowledge that arbitration involves the expense of the arbitrator’s services and the facilities to be used, significant savings can be realized through the efficiency and rapidity of the arbitration process, the savings in filing and legal fees and the finality of a timely arbitration award.
Early Neutral Evaluation
Another alternative dispute mechanism, currently not commonly used but to be encouraged, is early neutral evaluation (“ENE”) whereby an experienced lawyer or retired judge is asked to give a neutral, non-binding evaluation of the likely outcome of a dispute which the parties can then take into account in their assessment of their case.
ENE may prove helpful where parties are beginning to form entrenched views on the strength of their case. Practitioners in commercial cases should turn their minds to recommending the use of this method, particularly where the clients may be forming unrealistic expectations.
ENE may also be helpful where resolution of a legal issue may be critical to the outcome of a dispute. Thus, for example, the interpretation of a contract or the application of a statute or regulation to certain facts may be exactly the issue where a neutral but experienced legal mind may cast fresh light on the merits of one argument or another and thereby help the parties move towards a sensible early resolution with significant all around savings in costs.