Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is the umbrella title given to all forms of dispute resolution procedure outside the formal court system. The most commonly seen forms of ADR are arbitration, adjudication and mediation.

What is Arbitration?

For centuries arbitration has been used in Scotland as a means of settling privately all manner of disputes. In more recent times, the arbitral process has been used extensively to resolve building and engineering, and landlord and tenant (commercial and agricultural) disputes. In the last ten years, the introduction of statutory adjudication in the construction industry has considerably reduced the number of building and engineering arbitrations. What also led arbitration to fall out of fashion was that it was seen as a cumbersome and expensive procedure which largely mirrored litigation. Arbiters were not generally pro-active and were content to follow the traditional path of extensive and elaborate pleadings followed by legal debate and proof if parties had the stamina to stay the course.

However, recent dissatisfaction with the somewhat rough and ready nature of the adjudication process may signal a revival of the arbitration process in the construction industry. In addition, the Scottish Executive has intimated an intention to introduce an Arbitration Bill by 2009. Hopefully, this Bill will not simply copy the English Arbitration Act of 1996. It may, for example, include some degree of mandatory arbitration in certain areas.

The opportunity accordingly exists to develop a more streamlined, efficient and cost effective arbitral process, for those who wish to resolve their disputes in private, embodying the following principles:- (1) speedy resolution of the dispute, (2) succinct pleadings; (3) flexible but fair procedures to ensure the real issues in controversy are identified at an early stage and (4) the resolution of these issues in an efficient, competent thorough manner with emphasis on case management by an experienced arbiter, early disclosure of documents and expert reports, and informal meetings with experts.

How Axiom can assist with arbitration?

At Axiom Advocates, a number of members have very considerable experience of a wide range of commercial arbitrations both as arbiters and as participating counsel. Our members can advise and represent clients during all of the various stages of arbitration, from pre-arbitration negotiations, drafting arbitration pleadings, appearing at hearings and seeking enforcement of decrees arbitral.

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What is mediation?

Mediation is a process which brings together the parties to a dispute with a mediator, and aims to enable the parties to reach agreement. There are two types of mediation; evaluative (where the mediator evaluates each side's case and tries to work out an agreeable settlement with the parties based the mediator's assessment of their rights) or facilitative (where the mediation is interest based; the mediator does not become involved with assessing the merits of the parties' cases, but assists parties in exploring areas of potential agreement).

Mediation has many advantages. It can enable parties to reach settlement terms that could not be achieved in court. For example, a dispute could be resolved on the basis of new future commercial arrangements. Or there may be an apology, an explanation, or an agreement by a party to do something without any legal obligation to do so. Mediation can cut out many of the costs of the court process. It can also enable parties to resolve disputes more quickly than through the courts.

Mediation is gradually becoming a process being encouraged by the courts. In England the courts have been willing to encourage mediation by penalising successful litigants in costs where they have unreasonably refused to mediate. There are reports of Scottish cases where this approach is starting to be followed.

How can Axiom members assist with mediation?

  1. Axiom can provide the mediator. In Axiom we have a number of accredited mediators. Our mediators have gone through different accreditations, with the CEDR and Core training being of longer duration than the Mediation Forum Ireland training. Alistair Clark is a trained mediator with CEDR. Sarah Wolffe and James McNeill QC have trained with Core. Jonathan Lake, James Mure, Anna Poole and Kenneth McBrearty are accredited with Mediation Forum Ireland.
  2. Axiom can provide counsel to advise and represent clients before, during and after mediation. A number of Axiom members have an interest in mediation, and experience of appearing as counsel in mediation. Counsel who are trained mediators have a good knowledge of the process and are also well positioned to act as counsel in mediation. Counsel can either be instructed directly by the client if falling within direct access rules, or by a solicitor. Counsel can assist clients in mediation in the following ways:-
  1. Before the mediation
  • Counsel can advise on the advantages and disadvantages, including in relation to expenses, of going to mediation, or the circumstances in which a refusal to mediate is likely to be found justified. Counsel can also advise on appropriate timing for mediation.

  • Where parties have agreed to mediate, in advance of a mediation the mediator will ordinarily request each party to prepare and submit a summary of the case and provide supporting documents. Counsel can review the documents and draft a persuasive case for submission to the mediator. Counsel can advise on the documents that should be lodged to support the summary.
  • Counsel can also advise on the mediation process itself, familiarising clients with the process and advising on tactics. In advance of mediation, it is advisable to consider the objectives of mediation in the context of the best and worst alternatives to a settlement negotiated through mediation. Strengths and weaknesses of the case, and possible lines of persuasion, can be worked out with clients at consultation or through other advisory work.
  • At the beginning of a mediation, the client may be asked by the mediator to make an opening statement, and counsel can assist with the content of that statement.
  • Counsel can also advise on the mediation agreement which is signed at the outset of the mediation which sets out the parameters of the mediation.
  1. Attendance at mediation
  • Counsel are in a good position to provide objective advice about matters arising at mediation. As part of the mediation process it is likely that positions will change and offers may be made, and counsel's advice on these matters can assist the resolution process.
  • Counsel can also assist in putting together arguments to persuade the other side to agree
  • Counsel can suggest areas of agreement that can be reached; even if the whole case can't be agreed, partial settlement may be achieved, or agreement of procedural matters for a subsequent court case.
  • Once parties have reached agreement, Counsel can assist in drawing up either Heads of Agreement or a binding Settlement Agreement to be signed by both parties.
  • After the mediation
  • If Heads of Agreement rather than a full Settlement Agreement have been reached, Counsel can assist with finalising the terms of the Agreement.
  • If settlement has not been reached, counsel are in a good position to proceed to represent clients in litigation.

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What is adjudication?

Adjudication is a fast track form of dispute resolution which allows parties to have their dispute determined, out of court, by an adjudicator. Since the coming into force in April 1998 of the Housing Grants, Construction and Regeneration Act 1996 ("the Act"), a right to refer a dispute to adjudication has been mandatory in most construction and engineering disputes in the UK. This means that in almost all construction and engineering disputes arising today, either party may refer the dispute for determination by an independently appointed adjudicator who will judge the merits of the case and issue a decision within 28 days.

A decision issued by an adjudicator is not final. However, it does have interim binding effect. Whilst it can be reversed by a court or arbiter, it must be complied with in the interim whilst the issues are re-litigated before the courts or an arbiter, or until the parties reach a settlement. The interim binding effect of an adjudicator's decision makes it an extremely powerful weapon in any litigant's armoury. Having a decision reversed once it has been made can take a considerable amount of time and expense. During any subsequent litigation to have the decision reversed the party that succeeded in the adjudication will have the benefit of whatever award might have been made in his/her favour. If that party becomes insolvent after receiving a monetary award at adjudication, it can be impossible for the paying party to recover that payment, even if it transpires that the adjudicator got it wrong.

How can Axiom assist with adjudication?

At Axiom, our members have considerable experience of representing and advising clients throughout all of the stages of the adjudication process. They can provide clear and concise advice to clients to ensure that their rights are properly protected and enforced during the process.

Before the adjudication - Before an adjudication commences there will have been ongoing discussion between the parties to determine what is actually in issue between them. It is an essential requirement before a party can commence the procedure that a dispute or difference has "crystallised". If a claimant launches an adjudication before the dispute has crystallised, the adjudicator ought to decline to continue with it and the claimant will need to start again. By that time, he will have wasted time and money on the abortive procedure. He may also have lost a tactical advantage. Whether or not a dispute can be said, in law, to have properly "crystallised" depends on a mix of factual and legal considerations and this issue has been the subject of considerable previous caselaw. Our members can provide experience based advice on all aspects of the pre-adjudication process, both to prospective claimants and those who anticipate that an adjudication may be launched against them.

During the adjudication - The adjudicator has the power to regulate the procedure used during the adjudication. Most adjudications involve the making by both sides of detailed written submissions and counter-submissions setting out their legal and factual cases. Many adjudications will also include some form of hearing before the adjudicator, possibly involving the leading of evidence from witnesses as well as the making of further oral submissions. Adjudication is, in essence, a fast tracked legal process where the rights and obligations of the parties will be assessed and orders made for their enforcement. The same issues that arise in a court action can also arise in adjudications. Any errors made in the submissions can prove fatal, not just within the adjudication itself, but also in the longer term. Any evidence led during the adjudication can be used in subsequent litigation/arbitration proceedings. Accordingly, considerable skill and care requires to be taken in framing the adjudication documents (the notice of adjudication, the referral notice, the response and any other written submissions), making oral submissions and leading witnesses. Our members can draft the necessary adjudication documents and appear at any hearings called for by the adjudicator. They will provide the highest quality of representation and advice during the process to ensure that their client's interests are fully protected.

After the adjudication - At the end of the adjudication, the adjudicator will issue a decision. The issue of enforcement of that decision may then arise. If the decision entails the making of a financial award in favour of one of the parties, but the other party refuses to comply, the successful party will require to seek enforcement through the courts in order to get his money. The unsuccessful party will wish to consider whether or not there is any way to resist enforcement, possibly on the grounds that the adjudicator had no jurisdiction or exceeded his remit. Even if the decision does not involve an award of money, there may be many reasons why one or other of the parties may seek to have it reduced (set aside) by the court. The issues involved in enforcement are often extremely complex, involving consideration of court decisions from the Scots courts, but also the courts of other foreign jurisdictions. Our members have been involved in many of the most important Scottish cases in this area.

Axiom members have represented clients in all forms of ADR. We also have several qualified mediators who can act as mediators in any dispute.

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Axiom advocates with relevant experience:

Areas of Specialism

Lesley Flynn - Practice Manager
0131 260 5651 or lesley.flynn@axiomadvocates.com

Catriona Weir - Deputy Clerk: 0131 260 5653
Scott Gray– Deputy Clerk: 0131 260 5692
Veronica Lynn– Deputy Clerk 0131 260 5652