I have been involved with commercial litigation since Palmers was formed, nearly twenty-five years ago. There has, during that period, been a dramatic change in the dispute environment.
Litigation has always been considered by businesses to be a potentially expensive way to achieve a remedy. This remains the case today.
The introduction of new Civil Procedure Rules in 1998 eased the burden on the court system, reduced trial waiting lists and improved procedure but it has resulted in the deliberate ‘front-loading’ of costs, by requiring parties to a court case to ascertain and disclose facts and evidence before proceedings are commenced.
Although this creates increased costs early on, it does mean that parties are more aware (and therefore better able) to make informed decisions about settlement.
The courts are now involved in active case management - it may therefore be expected that a judge will actively encourage parties to attempt mediation before an action proceeds. Indeed, there are pre-action protocols which require parties to consider how a dispute may be resolved before they litigate.
Mediation is a misunderstood form of dispute resolution, but one which has a high success rate. It is not a panacea for all disputes - sometimes a court ruling is still required. It is however a solution which may lead to compromise, where both parties will be better off than if they litigate a dispute to a bitter (and often uncertain) end.
There may be contractual obligation to follow a dispute resolution procedure, entailing direct discussion and escalating to mediation and arbitration, before or in place of litigation. Failure to observe contractual or judicial procedures may be costly and frustrating – particularly for the party which would otherwise be successful.
The message is that businesses need to be more prepared than ever to negotiate settlement, even if litigation is chosen to recover a loss or to pursue a dispute.
Because of the development and interaction of mediation, resolution of commercial disputes is more complex than before, both strategically and tactically. It is sensible, therefore, to take stock of the position generally before any negotiation is undertaken.
Clive Tant is the Partner responsible for Palmers’ Dispute Resolution Team. He is a trained Mediator and is accredited with The Chartered Institute of Arbitrators.
Contact CTant@palmerslaw.co.uk
