Arbitration & Alternative Dispute Resolution – Why, in light of COVID-19, should they be considered?

COVID-19 is having a large impact on the litigation process and the Court system.

However, whether you are already in the throes of litigation or at the beginning of a dispute, you should not be discouraged as there are alternative methods to consider to progress your case despite these unprecedented times.

  • Arbitration – For those considering commencing a claim

Arbitration is the determination of a dispute by an independent third party (either an arbitrator or an arbitral tribunal) and is an alternative method to resolving a dispute by way of the traditional Court system.

Often commercial contracts will include provisions as to how a dispute should be resolved and will set out the terms of evoking Arbitration in the event of a dispute. In the alternative, and in absence of a contractual provision, parties may elect to use Arbitration to resolve their dispute and enter into an Arbitration Agreement.

By agreeing to enter into an Arbitration Agreement the parties agree to refer their dispute to a tribunal or Arbitrator to determine the dispute. A finding made by the Arbitration tribunal or Arbitrator is binding upon the parties like any Court order and can only be subject to an appeal in certain circumstances.

Why use Arbitration now?

COVID-19 has caused a large disruption to the Court system. Courts and Tribunals have been consolidated, the Supreme Court is closed, new practice directions have been put in place, hearings are being dealt with by telephone and/or video conferencing (if at all, as only urgent matters are being dealt with), certain proceedings have been stayed, the High Court and Court of Appeal are only considering urgent matters and the Royal Courts of Justice are operating on minimal staff.

The overall result is that the Court system has for the majority of cases, ground to a halt and there is not likely to be any progression until the Government lifts the current restrictions.

In contrast, COVID-19 has had minimal impact on the Arbitration process, it is for the most part operating as normal.

Flexibility is a defining characteristic of Arbitration, a tool that is invaluable in these unprecedented times. The parties are permitted to design a process that is proportionate and appropriate for their case; they choose the arbitrator, the timetable, venue, level of disclosure and procedure of the hearing. To reflect the current climate, parties could include the use of technological resources to ensure progression of case, including telephone conferencing.

Therefore, and in light of the above, if you are considering commencing a claim to resolve a dispute, Arbitration could be a fitting alternative to the Court procedure. Further, if you have a commercial contract, we can review and advise you in relation to the Arbitration clause and/or consider including such a clause in future drafting.

  • Mediation – For those engaged in issued proceedings

During the course of proceedings parties have an obligation and are required to consider the Overriding Objective (as defined in Part 1 of the Civil Procedure Rules) of dealing with cases justly and proportionately. A way to further the Overriding Objective is to engage and consider settling the dispute without recourse to the Court through Alternative Dispute Resolution (‘ADR’). Mediation is a method of ADR.

Unlike Arbitration, which is a binding Alternative Dispute Process, Mediation is a non-binding Alternative Dispute Process.

Mediation involves the parties, with their respective advisors, engaging in a without prejudice meeting which is conducted by an independent mediator. The mediator’s role is vital, they facilitate the communication between the parties, encourage the narrowing of issues and promote negotiations. The aim of the mediation is to reach a resolution, which if achieved on the parties own volition, will be set down in a Consent or Tomlin Order, to be filed with the Court to confirm the agreement reached and dispense of the proceedings.

As set out above, the Court system has been hugely impacted by COVID-19 which has resulted in many ongoing disputes facing an unexpected “pause” to their proceedings. Mediation could be a crucial tool for those that are feeling the impact of the Government restrictions that are impeding the Court system and wish to progress their case during this time.

Parties need not be discouraged by the inability to host the mediation in person – Mediation can be carried out virtually and there are plenty of platforms that can cater to multiple parties, including break out rooms, as it would have been carried out in person.

Online Mediation could also be valuable in dealing with progressing cross-border disputes where the parties are unable to travel due to travel restrictions in place due to COVID-19.

Why consider Mediation now?

Many may find the lack of Court progression disheartening; however, parties could seize this opportunity and utilise this time to take stock of their current position and engage in (or re-ignite) ADR discussions.

Despite the Courts current status parties are not prohibited in progressing their cases on their own volition. The current restrictions and the unexpected pause in proceedings could be considered as an opportunity for parties to consider reaching a sensible resolution or narrowing issues. Further, this time is an opportunity that should not be lost to assist the Court in holding the other side to account where the overriding objective is not being advanced.

If you would like assistance with Arbitration or Alternative Dispute Resolution, contact our Litigation department today on 0207 703 5034.