Advantages of Alternative Dispute Resolutions: Analytical Essay

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On behalf of Horace Rumpole & Co Solicitors, I am writing to you to explain the situation you are currently in with Mr Bolton of UHL Dispatch & Delivery Ltd. I will be explaining all your possible options which include going to court and the pre-action procedure we must go through with or taking the alternative dispute resolutions method.

Explanation of the contract

Firstly, I will go through the contract you entered with Mr Bolton and any possible breaches that have happened. A contract is a legally binding promise (written or oral) by one party to fulfil an obligation to another party in return for consideration.[footnoteRef:1] For a contract to become binding, it must have four parts to it and they are, offer, acceptance, consideration and intention to create legal relations. [1: Practical Law, ‘Thomas Reuters Practical Law’ (Glossary, 2019) accessed 10 December 2018]

An offer is a statement of a person’s intention to be bound by the terms made and the intention to contract with the offeror.[footnoteRef:2] Mr Bolton first placed it in the local newspaper. However, at that point, it was not an offer at the point, but an invitation to treat.[footnoteRef:3] It did not become an offer until you wrote back to the advert. [2: Chris Turner, Unlocking Contract Law (4th edition, Routledge 2014) 14] [3: Ibid 16]

After writing back to the advert, Mr Bolton had accepted your request and had given you the job. Bu signing the contract, you had agreed to the terms of it meaning an agreement was in place. That means that you had accepted that within 4 weeks, you would upgrade his 30 vans and in return you would get £550 plus VAT per van. So, should you have completed this task on time, Mr Bolton would pay you £19800. That would be considered as the considerations. It is considered as considerations as the case of Currie v Misa (1875) defined it as “some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.”[footnoteRef:4] In this case, Mr Bolton’s benefit is his 30 vans being upgraded but he is suffering the loss of £19800. [4: Currie v Misa [1875] 2 WLUK 24]

Finally, for a contract to become binding there must be a clear intention to create legal intentions. For this to happen, it must mean that if one party fails to uphold their part of the deal, they are liable for a breach of contract. Also, this deal was of a business arrangement and not of a social one, meaning that this was not two friends doing a deal as that would not make it legally binding but two companies doing business. With all of the requirements of a contract met, the contract is a legitimate contract and its obligations must be met.

However, there has been a breach of contract on your part as you failed to meet the deadline as you are four weeks overdue and only completed half of the vans. That would mean that you are liable to be sued by Mr Bolton for the breach of contract and he would be claiming damages or to even terminate the contract. Mr Bolton seems more likely to do the latter as he is in a rush to get the vans fixed otherwise his contract with Global Network and Delivery Ltd will be terminated so he will need another company to quickly fix his van within the month he has left.

If Mr Bolton were to sue you, we would have to get ready to go through the whole court procedure, which also included a pre-action procedure we would have to go through. Furthermore, going to court would have to be a last option for us because with all the evidence against us, we would most likely lose and you would have to pay any damages Mr Bolton is awarded.

Court Process

As this is a case between two individuals and not against the state, it will be a civil case and we would be going through the civil courts. The court that will hear our case would be the County Court. This is because the County Court retain almost an unlimited jurisdiction on contract cases which we are involved in.[footnoteRef:5] After, the County Court will send out a questionnaire called an allocation questionnaire. This will help the judges to decide what kind of track this case will go through. Seeing as Mr Bolton was going to pay you £19800 for all 30 vans to be repaired on time, the case will be a fast track case as it is between £10000 and £25000. This questionnaire must be filled accurately and on time otherwise the judge will impose a penalty.[footnoteRef:6] In a fast track case, you are allowed legal help and under our company’s policy, we have a ‘no win, no fee’ policy if the amount is under £25000. However, that does not exempt you from paying any legal help Mr Bolton may get if we are to lose the case. On the other hand, if you were to win, you could get Mr Bolton to cover your court costs. [5: Gary Slapper, David Kelly, The English Legal System (18th edition, Routledge 2017) 261] [6: HM Courts and Tribunals Service, ‘The Fast track the Multi-Track in the civil courts’ (HM Courts and Tribunals Service, 2014) accessed on 11 December 2018]

Even though we would not want to go to court because we would almost certainly lose the case, it does have some positives. One positive is that if this was to go to trial, the court would give us a trial date week in advance. That would allow us to gather couple pieces of evidence, such as the contract you had signed. Along with the contract, we could potentially use the fact that you only had four weeks to complete this difficult task even though Mr Bolton’s contract with Global Network and Delivery Ltd is not due for another month meaning he did not give enough time for your company to fix all 30 vans. Another advantage that we have is that the 15 van that you had managed to fix, Mr Bolton and you were both satisfied with the jobs done suggesting that you can get the other half completed if you just had a bit more time.

Even though there are positives, there are still negatives of going to court. One would be that the evidence against us is quite severe as the contract had explicitly stated that you had to fix all 30 vans within 4 weeks otherwise there would be a penalty which is why you are not even being paid for the 15 you have completed.

A second negative would be that court cases are public and everyone can access them. That would show that your company can not deliver on time which would mean that businesses would not come to you to repair their cars as they would not get it when they need it. That would then take an impact on your company which is already in financial trouble.

Thirdly, if the judge were to side with Mr Bolton, they could order you to pay for damages due to the breach of contract which would be one remedy as it would compensate for the loss Mr Bolton has endured.

Luckily for us, we would not be going to court straight away as nowadays, the courts would prefer us to go through different ways of resolving issues like this. This is because there is a pre-action procedure under the Civil Procedure Rules. This means that we would probably have to go through Alternative Dispute Resolutions.

Alternative Dispute Resolutions

Alternative dispute resolutions are a way of resolving disputes without going to court. It is a non-court procedure that involves a third party with a binding outcome on both parties.[footnoteRef:7] There are several forms of alternative dispute resolutions, such as mediation, arbitration, tribunals etc. Also, alternative dispute resolutions tend to be private and so it will not affect your company’s reputation. [7: Nigel Broadbent, ‘Alternative Dispute Resolution’ (2009) Legal Information Management 196]

Alternative dispute resolutions are used because the courts are recommending it. They believe that the parties involved should make the decision in cases like these as it should not eat up the courts time. This is because the courts have limited resources and are scarce and they would not get the time to hear all civil cases that are resolvable by the two parties talking to each other.[footnoteRef:8] So the courts have decided it be best for alternative dispute resolutions be used as they can get to the root of the problem and find a solution that works best for everyone involved. [8: Shirley Shipman, ‘Court approaches to ADR in the civil justice system’ (2006) Civil Justice Quarterly 181]

One alternative dispute resolution method is mediation. It is the most common and basic form of ADR. It involves a mediator, who is a neutral third party with no decision powers. All the mediator’s job is to do is talk with both parties and try and get them to find a common ground to settle on. It has a high success rate, with settlement rates tend to be 80% meaning that mediation works extremely well.[footnoteRef:9] [9: Nigel Broadbent, ‘Alternative Dispute Resolution’ (2009) Legal Information Management 196]

Also, with mediation, you most likely will not need any legal help as mediation tries to bring the two together and move on, not bring evidence against each other to prove who is in the right. This would be helpful for you as you could explain to Mr Bolton, in your own words, how you really feel about this job and how you need more time and how without this job, your company will probably go bankrupt.

With Mr Bolton being a close friend of yours for years, he would probably understand and be willing to meet you halfway by allowing you more time as he has seen the quality of work you produce so he already has trust in your skills. Also, what mediation, and alternative dispute resolutions, does is allow to maintain a friendship to exist afterwards and going to court will probably sever all your ties with Mr Bolton and years of friendship is gone after a misunderstanding like this.

A major negative of mediation is that as it is not a formal procedure, there can be a lack of cooperation from one or both parties. That would just lead to the mediator not being unable to find a common ground leading to a failed mediation. With this is mind, when the judge finds out that one or both parties have refused to cooperate unreasonably may potentially heavy sanctions at the end of litigations.[footnoteRef:10] So it would be in your best interest to attend all the mediation sessions and do what is required of you so the judge is not upset with you without even hearing the case if it does go to court. [10: Nigel Broadbent, ‘Alternative Dispute Resolution’ (2009) Legal Information Management 196]

A third form of alternative dispute resolution would be conciliation. It is quite similar to mediation where the two parties put their dispute in front of a conciliator. It is just as flexible and confidential as mediation. However, the main difference between the two is that at some point in the session, the parties will ask the conciliator to come up with a non-binding settlement proposal.[footnoteRef:11] This is something a mediator would not do as the mediator is not supposed to be involved in the decision making but just to bring the two parties to a common ground. [11: Dispute Resolution, ‘What is Conciliation’ (Dispute Resolution Hmaburg.com, 2017) accessed 10 December 2018]

Another form of alternative dispute resolution is arbitration. Arbitration is seen as very similar to litigation. The two parties will decide on a neutral arbitrator who will hear all the facts of the case. Once the arbitrator hears the facts, they will decide on an outcome called the ‘award’ that will be enforceable and binding to both parties. This is because the arbitration is governed by statute.[footnoteRef:12] Unlike mediation, the procedure for arbitration is very formal as it is closer to a court hearing. That would also mean that you can use solicitors to help argue your point of view and bring evidence for the arbitrator to look at. [12: Arbitration Act 1996]

One thing that distinguishes arbitration from litigation is that the outcome will be private and not public so no one will know about this but just like going through court, the friendship you and Mr Bolton have will no longer exist as this will lead to you both pointing blame at one another. Another distinguishing difference between arbitration and litigation is that the arbitrator is someone both parties feel comfortable with deciding and will not have any bias towards any one party whilst also having both parties’ interest in mind where as a judge just looks at the facts and comes to a decision without considering how each party would feel. Arbitration may not be our ideal choice for alternative dispute resolutions but its better than court as it will be private and your reputation is not tainted.

Lastly, one final form of alternative dispute resolution would be negotiations, where you and Mr Bolton talk it through and come to an agreement. This is extremely similar to mediation but negotiations would not require a mediator or a third party to intervene, it is strictly between the two parties and their representatives. What a negotiation can do is to possibly make a new contract that will give you enough time to repair the vans and get enough men to teach how to fix the vans in a manner that is acceptable. Also, you could have us read through it to see if there are any potential penalties should you not complete the task again which you may not have found or read like last time when you did not read the contract properly.

Advantages of Alternative Dispute Resolutions

Overall, alternative dispute resolutions have several advantages over going to court. One would be that it is extremely flexible. It is flexible by finding solutions that are good for all and they are happy with what they left with. This can not happen in a court as there will always be a loser. That would be a problem with this case as if the court ordered you to pay for damages and you can not afford them, then you and Mr Bolton both went to court for noting and Mr Bolton would also be a loser in the long run as he would lose his contract with Global Network and Delivery Ltd meaning that it was all for nothing.

Another way it is advantageous is that it saves a lot of time compared to going to court. This is because if we were going to court, we would have to wait for a court date and then once trial begins, it might not be settled until years later as the courts are currently overloaded and already have limited resources so it will take a long time for this civil case to be dealt, especially as this is not a famous one with lots of media attention. The one things Mr Bolton has not got is time as he needs his vans repaired within the month otherwise, he has lost a job. What alternative dispute resolutions can do is find a solution that would take couple days, maybe a couple weeks for both parties to agree on. This is very helpful for the parties as civil action cases are stressful and dealing with the issue swiftly can get rid of the unwanted stress.

Thirdly, a lot of money is saved due to not paying for court costs or even fees for lawyers.[footnoteRef:13] As alternative dispute resolutions are there to be informal and to get the two parties talking, no one is being paid for services as it is all about the two parties. That would mean that lawyer assistance is not really necessary as it is just a discussion between you and Mr Bolton, however we are here if you do need our services. [13: Local Court, ‘Benefits of alternative dispute resolution’ (Local Court, 20 February 2015) accessed 13 December 2018]

Also, the fact that alternative dispute resolutions are private is quite important for it to work.[footnoteRef:14] That would mean that for sensitive topics, alternative dispute resolutions can be used so that the public cannot be involved and be judgemental. It is supposed to be a place where common ground is meant to be found and public interference would only jeopardise that. [14: Ibid]

What alternative dispute resolutions do is that it maintains relationships. Instead of allowing people to argue and battle each other, they try to make them cooperate and work with each other. This is because alternative dispute resolutions are there so that both parties can leave with being happy with the decision that was made. This is to show that alternative dispute resolutions are there to not make enemies by making someone a winner and another a loser but maintain friendships and not burn bridges.

Another advantage is that with alternative dispute resolutions, people tend to settle.[footnoteRef:15] This will show that alternative dispute resolutions work very effectively and that there should be no reason as to why the parties should not want to cooperate as it will help them both. When it comes to alternative dispute resolutions, settling will allow for a good compromise that you would not get if you were to go to court. [15: Ibid]

Furthermore, alternative dispute resolutions tend to be more about what is fair and what is legally correct. Even though they try to uphold the law, alternative dispute resolutions try to get the two parties to communicate and compromise on a deal that seems both fair and right.

Lastly, an advantage that alternative dispute resolutions has is the use of the neutral third party. The third party who acts as the arbitrator, mediator or conciliator would probably be a lawyer.[footnoteRef:16] This would mean they have some sort of legal expertise within the law the dispute covers. That would beneficial to the whole process as it would give them better information on the facts and how to handle, meaning that the solution they have made would be one that is legally sound and fair to both parties. [16: Patrick O’Connor, ‘Alternative dispute resolution: panacea or placebo?’ (1992) Arbitration 58(2)]

Disadvantages of Alternative Dispute Resolutions

Even though alternative dispute resolutions have extraordinary positives, it does also have its problems. A negative being that alternative dispute resolution does not always bring a guaranteed resolution.[footnoteRef:17] This is because even though there is an 85% settlement rate, there is still a 15% of the process failing and it will still go to litigation. That would mean that both parties had invested time and money into a failed process and now they have to spend even more money and potential legal aid for court. [17: Michael J Coyle, ‘ADR Disadvantages’ (Lawdit Solicitors, 16 February 2013) accessed 13 December 2018]

Also, a disadvantage of alternative dispute resolutions would be that decisions are final. As they are not heard in court, the decisions are binding and non-appealable meaning that whatever decision is decided, it can not be argued and so even if the parties do not feel the award was a good one, there is nothing that they can do or complain to as no appeals can be made.

Whilst the major distinction between arbitration and alternative dispute resolutions is the arbitrator, they should be neutral and try to hear the facts whilst giving a fair award. However, recently parties have been given awards that neither is happy of so there will be a feeling of disenchantment with the use of alternative dispute resolutions as they will be thinking that it would have been better to go to court instead.[footnoteRef:18] [18: Patrick O’Connor, ‘Alternative dispute resolution: panacea or placebo?’ (1992) Arbitration 58(2)]

Another disadvantage with alternative dispute resolution is that you have no idea if the other party is going to cooperate. That would mean that if one party is adamant on going to court, they would see the alternative dispute resolution process a waste of time and just avoid it. That would make the neutral third party’s job complicated as it would only mean only one person is being helpful so it wastes of everyone time. This is done by one party using delay tactics to try and frustrate the other party and wanting to quickly end it by giving what they want and going to court.

When it comes to alternative dispute resolutions, especially the arbitration awards, it can only be resolve with money. This is a disadvantage as one party may not want to be compensated with money but with what they have lost and the arbitrator has no way of compelling one party to do that.[footnoteRef:19] [19: Mark Albright, ‘The Advantages |And Disadvantages Of ADR’ (Albright, Stoddard, Warnick and Albright, 21 September 2012) accessed 13 December 2018]

Unlike litigation, alternative dispute resolutions do not follow a system of precedent. This would mean that each case is unique and previous dispute resolutions will not influence the current dispute. This makes it so that there are no guidelines for future cases even if they are similar so there will be uncertainties and inconsistencies. This happens due to the fact that alternative dispute resolutions are private meaning that there is no way for people to know the resolutions of past cases or even know the facts meaning that there will never be a way for precedent to be set unless alternative dispute resolutions become public.

The neutral third party could be a problem of alternative dispute resolutions. As they are most likely lawyers and experts in the field, they could be more involved than originally intended. That could mean that they are not acting in the responsibility they have been given. A neutral third party must act to bring the parties together to reach a decision and reach their own decisions on facts and merits of the case.[footnoteRef:20] [20: Patrick O’Connor, ‘Alternative dispute resolution: panacea or placebo?’ [1992] Arbitration 58(2)]

Conclusion

Overall, our best chance to resolve this issue between you and Mr Bolton would be to take the alternative dispute resolutions method, specifically mediation. It would be a good chance for you and Mr Bolton to talk about the problems you both have and how you can help each other out. This would be able to succeed as you have been friends for a long time now and both of you would not want it end.

With everything outlined, mediation would probably allow you to get the deal you want, which is more time, however you must accept that Mr Bolton might want to take knock down the original payment owed as you have failed to deliver on time and has led to this dispute. Also, as a sign that you are willing to accept your mistake, an apology might be one thing to say to Mr Bolton as he did give you the job and you are grateful for him giving it to you. So, I hope you and Mr Bolton both find common ground and resolve this issue whilst maintaining a healthy friendship.

Bibliography

Table of Cases

Currie v Misa [1875] 2 WLUK 24

Table of Legislation

Arbitration Act 1996

Table of Books

Turner, Chris, Unlocking Contract Law (4th edition, Routledge 2014)
Slapper, Gary, and Kelly, David, The English Legal System (18th edition, Routledge 2017)

Table of Articles

Broadbent, Nigel, ‘Alternative Dispute Resolution’ (2009) Legal Information Management 196
Shipman, Shirley, ‘Court approaches to ADR in the civil justice system’ (2006) Civil Justice Quarterly 181
O’Connor, Patrick, ‘Alternative dispute resolution: panacea or placebo?’ (1992) Arbitration 58(2)

Table of Websites

Practical Law, ‘Thomas Reuters Practical Law’ (Glossary, 2019) accessed 10 December 2018
HM Courts and Tribunals Service, ‘The Fast track the Multi-Track in the civil courts’ (HM Courts and Tribunals Service, 2014) accessed on 11 December 2018
Dispute Resolution, ‘What is Conciliation’ (Dispute Resolution Hmaburg.com, 2017) accessed 10 December 2018
Local Court, ‘Benefits of alternative dispute resolution’ (Local Court, 20 February 2015) accessed 13 December 2018
Michael J Coyle, ‘ADR Disadvantages’ (Lawdit Solicitors, 16 February 2013) accessed 13 December 2018
Mark Albright, ‘The Advantages |And Disadvantages Of ADR’ (Albright, Stoddard, Warnick and Albright, 21 September 2012) accessed 13 December 2018

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