Search

COMMERCIAL LAW A - Z: A - ALTERNATIVE DISPUTE RESOLUTION

There are three main ways a commercial contract dispute may be resolved. These are:

· litigation,

· arbitration, and

· alternative dispute resolution (ADR).

Not everyone agrees with this. Some lawyers claim that arbitration is really just a form of alternative dispute resolution.

The leading academic textbook in the field of commercial law in England, ‘Goode on Commercial Law’ defines arbitration and alternative dispute resolution like this:

‘Arbitration is the voluntary submission of disputes…to a person or tribunal chosen by the parties or designated by a third party…’ [1].

Goode then goes on to define alternate dispute resolution as:

‘a process by which a third party…is brought in with a view to the dispute being resolved amicably and without a legally binding award.’ [2]

One type of ADR which has become increasingly popular in England in recent years is something called ‘early neutral evaluation’ (ENE). This is a process where the parties appoint an independent and impartial ‘evaluator’ to look at a dispute and give an evaluation of the merits of each party’s case. This evaluation can then be used to form the basis for settlement negotiations.

So far, ENE has been largely encouraged by the English courts. For example, in Seals & Anor v Williams [2015] [3], the judge, Norris J, highlighted the advantages of the process, stating,

‘The advantage of such a process……..is that a judge will evaluate the respective parties' cases in a direct way and may well provide an authoritative (albeit provisional) view of the legal issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy in addressing those legal issues. The process is particularly useful where the parties have very differing views of the prospect of success and perhaps an inadequate understanding of the risks of litigation itself.’ [4]

Early neutral evaluation is also expressly provided for in the English Civil Procedure Rules (the ‘CPR’) [5]

In more recent times, the English courts have had to consider the issue of whether the courts have the power to order an ENE, even if one or more of the parties does not consent to it. In the case of Lomax v Lomax [2019] [6], the Civil Division of the Court of Appeal held [7] that it did. More recently, the High Court, in the case of Telecom Centre (UK) Limited v Thomas Sanderson Limited [2020] [8] has given more guidance in this area, including further explanation of the purpose of ENE, how the ENE process might be structured, and when the procedure could be useful.

Text Notes:

[1] Goode on Commercial Law 5th Edition p1193

[2] Ibid p1194

[3] [2015] EWHC 1829 (Ch)

[4] Ibid para 3

[5] CPR 3.1(2)(m): “Except where these Rules provide otherwise, the court may – (m) take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.”

[6] [2019] EWCA (Civ) 1467

[7] ‘held’ here means ‘ruled’ or ‘decided’.

[8] [2020] EWHC 368 (QB)

EXERCISE

Match the words in (1) – (5) with the correct definitions in (a) – (e). The Answer Key is underneath the exercise.

1. amicably

2. deploy

3. voluntary

4. provisional

5. resolved

(a) Something which is arranged now, but not fixed, because it may be changed later.

(b) Something which is done by someone freely and willingly, and without any pressure or force.

(c) Something which is settled, usually because a solution has been found to a problem.

(d) Done in a friendly way.

(e) To move something (such as an argument or military troops) into position for effective action.

ANSWER KEY

EXERCISE 1

1(d)

2(e)

3(b)

4(a)

5(c)

5 views0 comments