Stewarts recently responded to a consultation by the Ministry of Justice (MoJ) in relation to dispute resolution outside of the court system.
In this article, Karen Jacobs, Carla Ditz and Miriam Spencer outline Stewarts’ key responses to the consultation and consider the recent speech on the same theme made by the Master of the Rolls, Sir Geoffrey Vos, at the European Association of Judges for Mediation in Dublin.
The responses to the consultation (invited from the legal profession, the judiciary, mediators, academics and other interested parties) will improve the MoJ’s evidence base with a view to informing government policy for dispute resolution. The aim is to create more proportionate and constructive routes for resolving disputes, avoiding the need for significant resources and time to be spent at an already difficult time.
Our response focused primarily on commercial and family disputes. Following the MoJ’s lead, references to the term “dispute resolution” below encompass all methods of resolving disputes, apart from litigation. This represents a cultural shift, as the legal system looks to move away from the so-called ’alternative’ approaches to court proceedings being seen as an add-on or diversion for those seeking to resolve a dispute.
Commercial disputes
As a firm, we are keen proponents of using dispute resolution processes to resolve our clients’ commercial disputes. However, given the nature of our cases, which are complex, high-value, multi-jurisdictional and involve multiple parties, we believe there is not a one-size-fits-all approach.
Preserving parties’ ability to choose to resolve a case through the courts is most important given the competition from commercial courts in other jurisdictions and challenges post-Brexit. This will ensure that parties continue to look to our Business and Property Courts as the forum for resolving their disputes.
While a degree of compulsion to encourage parties to engage in dispute resolution outside of the courts is important, there needs to be flexibility for complex cases, excluding them from any compulsory schemes.
Timing is crucial, and being forced into early resolution processes where there is an imbalance of information may put a party at a serious disadvantage. A party should not be penalised if it does not have sufficient information to make an informed decision as to whether to proceed with a dispute resolution process. The Disclosure Pilot Scheme encourages the parties to collaborate, and more could be made of such schemes to overcome this barrier.
For many of our cases, it is better to run the dispute resolution processes in tandem with the court process rather than staying proceedings so that the case does not lose momentum. To encourage greater use of dispute resolution processes, we suggested more proactive case management by reference to the lists of issues of the case. Our Business and Property Courts should give additional time to consider which issues could be resolved by dispute resolution processes and those more appropriate for the court.
Divorce and Family
In divorce and family matters, several sophisticated and effective non-court dispute resolution processes are now available from a range of highly skilled and experienced individuals. These include mediation, arbitration, private judging, early neutral evaluation and collaborative law. These options are all quite different, but at the heart of them is the drive to manage cases and resolve family disputes out of court where appropriate.
The growth of these various dispute resolution processes has, in part, gone hand in hand with existing problems within the court system. This means the need and appetite for dispute resolution options is changing for the better. Promoting the full range of these processes is vital to resolve disputes in the best possible way and achieve the best outcomes for families on relationship breakdown.
In a significant number of cases, dispute resolution processes can achieve better overall outcomes than what is achieved in court for several reasons. Cost savings can make a material difference if an earlier outcome is realised, not to mention the impact of early resolution and less adversarial approaches on relationships going forwards, particularly co-parenting relationships. What’s more, with the advent of no-fault divorce following the enactment of the Divorce, Dissolution and Separation Act 2020, there should be an immediate shift at the outset of many cases to a less adversarial approach to divorce. It is hoped that this will filter through to the resolution of the financial settlement and children matters (and indeed set a more conciliatory tone in this respect). The existing choice of dispute resolution options will assist greatly to further this objective.
As with commercial disputes, employing a dispute resolution process such as mediation in tandem with the court process can often provide the mechanism and momentum necessary to reach a resolution. Crucially, however, any non-court based dispute resolution process is voluntary, so both parties need to invest in it, enter into it in good faith and engage fully for it to succeed.
Finally, the diversity of cases in family law means that while some matters are best dealt with away from the court (particularly disputes concerning children), others require the structure, timetable, urgency and compulsion of the court process. Establishing which is the right process for each case is therefore paramount.
Master of the Rolls’ speech: ‘Mediated interventions within the court dispute resolution process’
Indicating the current focus on dispute resolution, the Master of the Rolls, Sir Geoffrey Vos, recently addressed the European Association of Judges for Mediation in Dublin on his vision for a digital dispute resolution system. Significantly, he noted that his suggestions would need adaption for the complex cases dealt with by our Business and Property Courts. The lecture covered three key themes:
1. How can dispute resolution be dealt with differently?
With a courteous nod to the 60 million cases dealt with each year on eBay, Sir Geoffrey Vos set out the first “layer” of his proposed dispute resolution system: a regulated website and associated app providing a signpost to all accredited dispute resolution platforms.
The second “layer” would be pre-action portals. Many of these are already in existence, such as the Financial Ombudsman Service portal, the pre-action portal for personal injury cases and the pre-claim Mediation Information and Assessment Meeting (MIAMs), which are mandatory in family cases. This would help disputes enter the system only when they need to do so.
The online court process is Sir Geoffrey Vos’s proposed third “layer”. While online systems are already in place for many different types of proceedings, the online court processes in his proposed system would be “cohesive, more streamlined, less costly” and allow cases to be resolved far more quickly.
2. How can mediated interventions be integrated into that process?
As Sir Geoffrey Vos outlined, most cases are amenable to consensual resolution in one way or another, provided the intervention is applied at the right time and in the right way. He proposed a four-stage mediated intervention system that starts with an AI-driven bot suggesting resolution and culminates in face-to-face mediation if no agreement can be reached at an earlier stage.
3. Can or should alternative dispute resolution be mandatory?
Sir Geoffrey Vos concluded his lecture by endorsing mandatory mediation in small claims. He also announced a forthcoming report from the Civil Justice Council, which is expected to recommend that claims worth less than £500 should be subject to mediation. If not resolved consensually, they should be resolved by a judge on the papers without oral evidence or submissions.
Stewarts Litigate
Stewarts has launched a ground-breaking after the event (ATE) insurance facility with Arthur J. Gallagher Insurance Brokers Limited. ‘Stewarts Litigate‘ is designed to work alongside our alternative funding agreements. The facility provides our commercial disputes clients with rapid access to comprehensive ATE insurance at pre-agreed market leading rates. The facility can provide coverage of up to £4 million in three business days and up to £18 million within ten business days.
Find out more about Stewarts Litigate here.
This communication has been authorised by Arthur J Gallagher Insurance Brokers Limited for the purpose of s21 of the Financial Services and Markets Act 2000
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