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In recent years, the courts in England and Wales have placed a greater emphasis on encouraging parties to explore Alternative Dispute Resolution (ADR) to assist in reducing the congestion of cases going before the Courts and to encourage litigants to focus on resolving their disputes. This emphasis on ADR has been heightened by the introduction of the Jackson Cost Reforms which came into force on 1 April 2013, which the courts intend to enforce robustly. The effect of incentivising parties to keep costs down, requiring parties to file detailed costs budgets and to consider all alternative options prior to going to court appears set to result in a boom in the use of ADR.
Recent case law has also helped encourage those who do not want their disputes aired in a public forum into ADR. The recent authority of Global Torch Limited v Apex Global Management Ltd & Others  EWHC 223 (Ch) reconfirmed that, with limited exceptions, potential damage to reputation will not stop cases being held in public and an order to hold hearings in private will be extremely difficult to attain. The use of without prejudice discussions can also drive parties into making concessions behind closed doors, and anything raised in negotiations during the course of ADR can and should be made without prejudice so that it will not impact on the parties’ formal positions. This gives the parties’ added flexibility to negotiate the resolution of a dispute.
ADR is an extremely flexible and varied forum for resolving disputes. When ADR is used successfully, huge savings can be made in time, money and stress levels. Parties can also utilise forms of ADR for anything from boundary disputes to large scale fraud cases. Indeed the HMRC has recently held a pilot study to look into the possibility of using ADR in large and complex tax cases.
Broadly, ADR can be broken down into 3 areas:
Non-Binding ADR Processes without Third-Party Intervention
Non-Binding ADR Processes with Third-Party Intervention
Binding ADR Process
The variety of ADR options available provides those in dispute with a range of options for a cheaper and faster conclusion. With the courts encouraging and in fact actively requiring the parties to consider ADR options, there is a real incentive to litigating parties and the lawyers advising them to explore ADR. If the dispute can be resolved then this may result in a significant saving in time and costs, and conversely if the other party refuses to participate in ADR then this will be a factor the court will take into account in assessing the issues of costs at the end of the court process. It can also be a useful tool in assessing the strength and weaknesses of your case at a relatively early stage. ADR is on the increase, it is being pushed more than ever and is here to stay.
Co-written by Angus Wakeman and Iain Hartnup.
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