What are the methods of dispute?

What are the most common methods of settling contract-based disputes?

Nội dung chính Show

• What does the contract say?
• Alternative Dispute Resolution Methods
• Non-binding alternative dispute resolution methods:
• Binding alternative dispute resolution methods:
• Pre-Action Protocols and Litigation
• How can we help?
• Get in touch
• What are the 4 types of disputes?
• What are the two methods of dispute resolution?
• What are the three types of dispute?
• What is the most common method used to resolve disputes?

Generally, the most common methods of settling contract-based disputes are Mediation, Litigtion and Arbitration (listed in arbitrary order), as futher outlined in the following:

• Mediation

Mediation involves a usually voluntary arrangement whereby a third party (a mediator) chosen by the parties or by a method approved by the parties listens to the argument of each side, discusses the case with them separately or together, and tries to help them reach a settlement.  Typically the mediator has no authority but assists them in recognizing the strengths and weaknesses of their arguments and looks for a solution on which they can agree, usually an agreement on common ground.  Mark McNeil is an experienced mediator.  

• Litigation

Litigation is the process of taking a case through the courts for an enforceable settlement, although a potential problem is how enforceable the order from a court of one country will be in a different country.  The enforceability depends on a number of factors that will be considered in a later note.

• Arbitration

Arbitration involves placing the dispute before one or more arbitrators, who are much like private judges.  Several well-known international organizations are available for dispute settlement of this sort, following their respective methods of qualifying and selecting arbitrators and following their own procedural rules or other rules that the parties choose.  Typical costs include fees for the organization as well as hourly fees for the arbitrators, in addition of course to the fees of the attorneys that represent the parties in the arbitration.  The most reliable are those that have published their fees and rules and that have high ratings of fairness, transparency, and consistency from parties whose cases they have heard.

dispute-resolution /  

Dispute Resolution Methods: Resolving contract disputes

9th May 2022

Linkilaw Solicitors

Book a call

One of our dedicated team will be happy to discuss your needs.

Breach of contract disputes are the most common lawsuits in today’s courts and can prove particularly harmful to SMEs. Knowing and understanding dispute resolution methods can make all the difference if you need to resolve disagreements within your business or with third parties.

Dispute resolution is the process of resolving a dispute or conflict between different parties. It usually involves methods to solve a disagreement without going to court.

What does the contract say?

When a contract dispute occurs, the first step is to carefully review the agreement in question. It usually provides information on how to act in case of breach of contract, and it can inform how serious the dispute is.

It is important to look for the governing law and jurisdiction clauses to understand which country’s law governs the contract and whether there is an Alternative Dispute Resolution (ADR) clause.

This comprehends the ramifications, the parties’ entitlements and the potential ways in which an alternative resolution may be found.

Alternative Dispute Resolution Methods

Although the default method of resolving contract disputes is legal proceedings, there are other methods of resolving disputes. These are called Alternative Dispute Resolution or ADR.

Non-binding alternative dispute resolution methods:

ADR focuses on parties reaching a without prejudice consensual resolution. Meaning that the parties can discuss the dispute openly and honestly without compromising their position if these methods do not reach a settlement.

A non-binding Alternative Dispute Resolution clause will provide information on how to resolve the dispute before employing a binding method.

The most common methods of non-binding options to litigation are:

• Negotiation: this is a voluntary and confidential method of resolving disputes. Both sides seek to find common ground to work towards a conflict settlement in a neutral setting. Negotiation is usually employed before resorting to any other method of dispute resolution. It is common for long-term contracts to include an escalation clause, which will require the parties to conduct a series of tiered negotiations to attempt to resolve any dispute before the parties can refer it to mediation and/or issue legal proceedings.
• Mediation: the process of using a neutral third party (mediator) to assist in resolving the dispute.
• Early neutral evaluation (ENE): a neutral third party considers each party’s submissions and provides an opinion on the likely outcome trial. That view is without prejudice and has no binding effect unless the parties have agreed that it should be binding.

Binding alternative dispute resolution methods:

When non-binding options are unable to reach a settlement on the contractual dispute, the next step is to employ the binding option existent in the contract.

The most common binding methods alternative to litigation are:

• Arbitration: the parties appoint an individual or panel to make a binding decision after providing all evidence. Arbitration is not technically considered ADR as decisions are generally able to be enforced in a similar way to court judgments. Save for exceptional circumstances, legal action in court is not possible after receiving a final and binding decision via arbitration.
• Expert Determination (ED): the parties get to choose a neutral expert with skills relevant to the dispute, usually on a technical matter, who will make a binding decision.
• Adjudication: this is a quick method of resolving disputes where a third party is appointed to produce a temporarily binding decision. It is binding until the dispute is determined by court proceedings, arbitration or settlement properties. It is used mainly in the construction industry.

Pre-Action Protocols and Litigation

If the parties cannot resolve their dispute through the more informal dispute resolution methods, litigation is usually the only option remaining.

Litigation is the process of taking a dispute to a court of law. If parties cannot agree on the fair and proper outcome of a dispute, they will present their respective cases to a court for judgment.

The courts of England and Wales encourage parties to resolve disputes early through communication, only considering litigation as a last resort.

Litigation can be costly and slower than ADR, but litigation may be the best option in the case of expensive and complex matters where it is difficult to find common ground to reach an agreement.

Prior to commencing court proceedings, it is crucial to comply with the Practice Direction on Pre-action Conduct and Protocols (the “Practice Direction”) contained in the Civil Procedure Rules (“CPR”). Failure to comply with these rules can result in penalties at a later stage.

How can we help?

We believe that the starting point to resolving disputes is developing a tactical strategy that minimises risk and maximises opportunities for reaching win-win solutions. Our dispute resolution strategies encompass both the grievances and the incentives of each party, getting to the heart of the matter and expediting a solution.

For matters that reach litigation or arbitration, we pride ourselves on creating clear and concise action plans that help our clients achieve their desired results.

Schedule a call with our dispute resolution experts here.

What are the 4 types of disputes?

What are the two methods of dispute resolution?

What are the three types of dispute?

What is the most common method used to resolve disputes?