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Defining ADR, dispute resolution and litigation

by Matthew Rushton on 30 Sep 2013

defining ADR, dispute resolution and litigation

Recent discussions with the editor of a well-known legal title alerted me to some apparent confusion about terms which many of take for granted. In this instance, I took issue with a broad definition of “dispute resolution” as an umbrella term for the process of pursuing or defending a legal claim. Resolving a claim, I would submit, is entirely different from the vindication of legal rights sought in court.

The confusion, however, is understandable. The Woolf Reforms of 1999 not only emphasised proportionality of legal costs to the sum in dispute, but consistent with that premise, tilted the procedural landscape towards settlement. The Civil Procedure Rules henceforth aimed to promote settlement by various means, including alternative dispute resolution. Soon afterwards commercial litigation departments at law firms became – externally at least – known as dispute resolution departments. This was more than simply a re-labelling exercise: the Reforms prompted a new approach to litigation. Whereas previously winning was everything, and cases were fought with that singular purpose in mind, post-Woolf, law firms began to craft litigation strategy with the objective of putting clients in the strongest possible position to settle.

Nevertheless, I would argue that clear distinctions can be drawn between litigating then settling on a commercial basis, and the aims and objectives of dispute resolution. Those distinctions now appear blurred – at least to those operating outside the litigation/dispute resolution field.

Simply put, litigation - and all forms of arbitration - are primarily concerned with rights and remedies; dispute resolution, by contrast, is focused on the needs and wants of the parties. In practice, mediators will likely need to deal with both, and often feel that shifting the parties away from entrenched legal positions is among their greatest challenges.

While mediation may from time to time stray into the realm of litigation, I believe that referring to litigation as dispute resolution is misleading for the following reasons:

1) Litigation is a formal process governed by rules of evidence, procedure, and directions from the court

2) Litigation is adversarial and the court’s role is to decide on the basis of arguments and evidence presented

3) Adversarialism dictates that the court must make no attempt to reconcile or accommodate interests, but merely decide between the parties

4) Litigation is binary: there are clear winners and clear losers

5) Litigation is “coercive” in the sense that there are penalties for non-participation, and non-compliance with orders from the courts to produce documents etc

6) Litigation is binding (although subject to appeal) and the state can enforce judgments by seizing funds and assets as appropriate

7) Litigation is “norms based” in that cases are decided on established legal principles and not in terms of needs, wants or interests

Resolving a dispute rather than having it determined by a court is the opposite: it is informal and non-adversarial; and decisions are made by parties, rather than the courts.

While there is clear water between the aims of litigation and dispute resolution, one should also acknowledge the judiciary’s shift in attitude in favour of alternative dispute resolution. And at the same time acknowledge that the rigidity and formality of the courts can be overstated: the vast majority of cases settle by a combination of negotiation, active case management, disclosure of information and compromise. Does this amount to resolution? In my view, no. It amounts to settlement, and while settlement is almost always preferable to judgment, dispute resolution offers the opportunity to settle on mutually advantageous terms seldom available through litigation alone.

Outsiders – even editors of legal publications - are to be forgiven if they find these distinctions somewhat trifling. However for companies that grasp these distinctions both when drafting contracts, and when managing litigation, the savings on legal bills, lost management time and lost business opportunities can be anything but trifling.

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Topics: ADR

Matthew Rushton

Written by Matthew Rushton