Many small to medium sized businesses will, thankfully, rarely be involved in litigation. As a result, they will have little experience of what is to follow once they commence a dispute resolution process regardless of the nature of that process. In many cases, disputes will be addressed via litigation[1]. In many instances the perceived wrong done by the other side will drive the dispute forward. It is only perhaps when some of the initial expectation of a quick positive trial outcome fades, whilst the pre-trial process winds on, that parties will wonder ‘should this have gone on for so long’ and/or ‘was there a quicker way to do this?’ Nevertheless, once litigation is commenced it takes on an energy of its own and many parties are able to see the case through to an initial judgment. Matters may thereafter get more complex as (further) fatigue potentially sets in.
When a dispute finally comes to trial and judgment is given, the issue of whether to appeal is a classical zero-sum game. Whilst only a minority of civil and commercial cases are appealed[2]the total number of appeals is sizeable because of the overall volume of cases. Sometimes depending on the degree to which there is ‘equality of arms’ a larger party to a case will want to appeal a judgment as they would rather delay giving the other side money even if their exposure to legal costs is increased as a result. Moreover, certain plaintiffs/defendants may well welcome the chance to show to the wider industry that they are involved and that they are not to ‘be messed with.’ Over time there may be a perceived advantage to being known as a company that will always appeal court decisions- some who contemplate bringing marginal cases against such a party may in the end decide not to issue proceedings.
It can be the case that one or both parties have got so caught up in the process that has been entered into that they do not contemplate departing from the path they have used to date. It is suggested that an apt moment for a review of whether the correct strategy has been followed is at the stage where an appeal will inevitably follow an initial judgment.
In certain circumstances rather than following through and going through all the necessary steps in the appeal court it may be in the best interests of both parties to mediate and/or arbitrate the dispute. Whilst entering into an agreement pre a court appeal to use an escalating dispute resolution clause may sound overly complicated there is a clear logic to such an approach. Mediation is ‘only’ successful between 60-85% of the time when two bona fide parties’ avail of it[3]. Depending on the facts of the specific dispute it may well be that there are advantages in both time and cost to follow an expedited arbitral process rather than to fall back into the normal timetable for a court appeal.
Each dispute will turn on its own facts. Alternative Dispute Resolution (‘ADR’) will in certain instances not be the best resolution method for a dispute. There are very limited grounds of appeal from the decision of an Arbitrator under the 1996 Arbitration Act. A quick final decision conducted in private, where the parties ‘picked their own judge’ will be very attractive in many but not all cases. Mediation can be a valuable antidote to the antagonistic nature of litigation and arbitration. As has been noted:
‘Litigation is by its nature an aggressive process and it is submitted that it is rare that parties continue a commercial relationship following this process. As a number of commentators, such as Appel have discussed the ‘whiff of grapeshot’ is a reality when parties end up in a court room, where mediation may see a dispute ‘settled on a friendly basis.’[4]
The above remarks can apply to arbitration as well.
However, a mediator will not adjudicate on ‘black letter law’ issues where one or more of the parties may need an interpretation given on a point of law that has arisen in the dispute. In such circumstances the parties will need to avail themselves of litigation or arbitration. Where one of the parties wishes to rely on the precedential value of such a decision and to have the decision publicised it follows that traditional litigation will normally be more advantageous for their position than arbitration. But in many instances a careful risk analysis of each sides position may allow by agreement the use of arbitration and/or mediation to obviate the delay in an appeal coming up for listing due to the Covid-19 situation (or for other reasons).
DR TARIQ MAHMOOD AND ARRAN DOWLING-HUSSEY © 2020
BARRISTER
33 BEDFORD ROW
Arran Dowling-Hussey is a Barrister, Arbitrator and Mediator working from 33 Bedford Row, London; he can be contacted at adhussey@33b3edfordrow.co.uk
Dr. Tariq Mahmood is a Barrister, Arbitrator and Mediator practising from 33 Bedford Row where he is Head of Arbitration & Alternative Dispute Resolution. He can be contacted at t.mahmood@33bedfordrow.co.uk
Members of Arbitrators@33BedfordRow have experience, both as party representative and arbitrator/mediator, of a wide range of disputes in a variety of jurisdictions. Each member of Arbitrators@33BedfordRow can advise on the utility of any one dispute resolution method or indeed using a combination of processes in an escalating dispute clause often known as ‘med-arb’ or ‘arb-med.’ For enquiries, please contact m.byrne@33bedfordrow.co.uk
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.
[1] The authors are unaware of any statistics to support this contention but in their professional experience this is in practice the position. They invite comments and corrections in relation to this post to the email addresses already provided.
[2] Research Briefings (accessed on April 10, 2020)
[3] On mediation success rates see amongst other things, The Eighth Mediation Audit 2018 (accessed on April 10, 2020)
[4] Dowling-Hussey, “The Effect of the Proposed Directive on Certain Aspects of Mediation in Civil and Commercial Matters on Mediation in the United Kingdom and the Republic of Ireland.” (2006) European Current Law Monthly Digest xi.