TAYLOR LAW - Dispute Resolution Processes

Dispute resolution can be by adjudicative or consensual processes.

An adjudicative process is one in which a third party is asked to impose his decision on the parties in dispute. Litigation, arbitration, expert determination and adjudication are examples of adjudicative dispute resolution.

Consensual dispute resolution involves the parties agreeing an outcome voluntarily.  Obvious examples are mediation and negotiation.

Litigation: Generally, there is a right to litigate a dispute by raising an action in court.  An action can be raised either in the sheriff court, or in the Court of Session.  Certain types of dispute can only be raised in the Court of Session.  There are also different procedures in each of these courts. 

In the sheriff court there is the Small Claims procedure for claims for payment, recovery of property or implement of an obligation, of a value up to £3,000.  Summary Cause procedure is used for claims which do not fall under the Small Claims procedure, up to a value of £5,000.  The most complex procedure is the Ordinary Cause procedure which must be followed for all claims of a value over £5,000.  There is also the Summary Applications procedure which is normally used for the enforcement or review of the decisions of public regulators.  Litigation may best be adopted where your opponent will not engage, where a right requires to be enforced, or where the dispute involves a question of law.  In addition, there are specific procedures for, Family actions, accident claims and, in some courts, for commercial disputes.

The Court of Session also has different procedures.  The default is the Ordinary procedure, but, again, there are specific procedures for example, for review of the decisions of public bodies (Judicial Review), for Family action, and for accident claims.  In addition there is a specific procedure for the resolution of commercial disputes.  This procedure is becoming increasingly popular amongst commercial clients, because of its speed and pragmatism.  The intention is that the same judge will preside over each stage of the process.  He will take a more active role in resolving the dispute.  It is best used where the issues between the parties are focused.

Arbitration: Arbitration is, essentially, litigation by agreement.  The parties agree, before or after the dispute arises, to arbitrate rather than litigate.  The parties may agree on the procedure to be followed, but otherwise the Arbitration (Scotland) Act 2010 will govern the arbitration.  If the parties do agree to arbitrate, litigation may not be possible.  The main advantages to arbitration over litigation are that the dispute may be resolved in private and someone who has specialist knowledge of the subject matter of the dispute may be appointed to resolve the dispute.  Arbitration has existed for centuries, but the 2010 Act has led to some excitement in Scotland about its future use and development.

Expert Determination:  This procedure is usually faster than litigation or arbitration.  Again the parties can decide the procedure to be followed and can agree that the process will remain private.  But there are some key differences between arbitration and expert determination.  For example, an expert can use his own knowledge and experience to reach his decision, but cannot determine a question of law.  Expert Determination is best used where there is a discrete argument of fact between the parties, such as the quality of works undertaken.  Expert Determination can be used in the context of a litigation.

Adjudication: Adjudication is also a fast track method of dispute resolution.  It usually takes between four and eight weeks.  It is akin to arbitration.  However, unlike other forms of dispute resolution, the decision reached by the adjudicator is temporary and may be overridden by a subsequent arbitration or adjudication.   The parties may agree to adjudication before or after a dispute has arisen.  In relation to certain construction projects there may be an entitlement to refer a dispute to adjudication under the Housing Grants, Construction and Regeneration Act 1996.  Because of its speed and because the adjudicator may be a specialist in construction, it is a popular method of resolving disputes in the construction sector.

Mediation: The danger with adjudicative processes of dispute resolution is that the parties become polarised.  Long term relations may therefore be damaged.  Mediation is not about a third party imposing a decision.  It is about facilitating the parties to come to their own agreement.  Mediation can therefore allow issues beyond the dispute itself to be taken into account.  Innovative solutions can be found to maintain relations going forward.  A mediation can be established quickly and normally takes a day of meetings to conclude.  The mediator will listen to the respective parties' positions, concerns, or motivations and can be given information in confidence.  He will move between the parties to bring them together in agreement.  Nothing is binding, or can be relied upon in subsequent proceedings, until an agreement is reached.  Depending on time pressures, mediation may be worth engaging in before following adjudicative dispute resolution procedures.  Indeed, in England, there may be consequences in the award of expenses by the court if mediation has not been attempted.  Mediation is useful as much in commercial disputes as it is in Family disputes.

Negotiation: Negotiation is mediation without the mediator.  It involves the parties, or their representatives seeking to resolve the dispute in a commercial, sensible manner, to avoid the risks and costs of other methods of dispute resolution.  Negotiation is an art which requires skill and experience.  The kind of skill and experience that Taylor Law can offer through the years involved in dispute resolution of its personnel.

Dispute Avoidance: Disputes are expensive. They cost money, time and emotional strain whether in business or private life. The likelihood of disputes arising, and the costs involved in resolving disputes that do arise can be reduced.  The most obvious method of doing so is to seek to ensure that the terms of any contract or agreement are clear, precise and unambiguous.  Provisions about dispute resolution procedure, which is tailored to fit with the scope and nature of the contract or agreement should also be included.  Taylor Law can assist you in avoiding or reducing the cost of dispute by reviewing your contracts, agreements, standard terms or by assisting you at the tender stage. 

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