Jonathan Seitler QC and Miriam Seitler debate moot points in property law – this time, litigation v mediation.
Question: Is court the best way to resolve a dispute?
YES: Jonathan Seitler QC, barrister at Wilberforce Chambers, argues that while alternative dispute resolution (ADR) – things like mediation, arbitration, expert determination, early neutral evaluation – looks like an attractive shortcut, court trumps all avenues in the end. This is for five reasons:
1. When you go to court you get the judge that you’re given. There is no picking and choosing. There’s usually no point suspecting the other side may be favoured by the tribunal and there is no point worrying if he or she has the right qualifications, insight or experience. You get what you are given.
That doesn’t happen with mediation. Each side will consider vetoing their opponent’s choices to gain a perceived advantage. Nor does it happen with expert determination, when the expert’s suitability is often confused with his or her likely partiality to one side or the other. In other words, once you try to resolve cases other than in court, there is a whole extra level of selection, concern and, therefore, inevitably, cost.
You can’t beat the idea of a thorny dispute being resolved by a truly neutral person, imposed by a neutral system in a totally dispassionate way.
2. In the court system there is no doubt you will get a proper professional judge whose whole job is to make clear, correct decisions – who has made judging his or her calling. The great advantage is that you know that someone else – the Judicial Appointments Commission and the Ministry of Justice – has given the state’s imprimatur to that person’s ability to resolve disputes.
And, assuming you commence your case in the right division, you can be pretty sure (in most cases) that the person allocated to your case has the relevant specialist legal knowledge too. You never know, your case may end up coming before Lewison LJ or someone of his calibre. Nobody could be criticised for thinking that his level of legal knowledge is a level way above that to be found in the open market.
3. It is true that court has an “entry fee”: sometimes it can cost up to £10,000 to issue a claim.
But experts and mediators need paying too and what you get for your issue fee is all the power of the state to enforce justice against the non-compliant other side. This is absolutely essential for getting a resolution to a dispute when the other side is dragging its heels.
So if, for instance, the other side is meant to do something, say produce a document by a certain date, the court can make an order that, unless it is done by a short extended date, its claim will be struck out. An arbitrator or expert can try something similar, but it is unlikely to be as powerful. An expert, anyway, only has the powers which the parties have devolved on him or her, usually in a short agreement of two or three pages. The court has all the powers of the court under the Civil Procedure Rules, as set out in the 3,000-plus pages of the White Book.
4. If you have a dispute with someone, pretty much by definition, you cannot rely on them. Although arbitration is regulated by the Arbitration Act 1996 and legal rights do arise under it, when it comes to expert determination and mediation, there are ample opportunities for a recalcitrant opponent to drag its heels or stymie any progress in resolving such dispute.
In the case of expert determination, a party can raise, or even (being cynical) manufacture an issue which goes to the expert’s jurisdiction and the question of the scope of the expert’s jurisdiction is treated, ultimately, as a matter for the court, rather than the expert themselves. In practice, the “route into court” based on a challenge to the expert’s jurisdiction sometimes results in lawyers (especially) seeking to turn a determination that they do not like into an issue of jurisdiction: see Shafi v Rutherford [2014] EWCA Civ 1186 and Premier Telecom Communications v Webb [2014] EWCA Civ 994. This can cause delay and, probably, expense. It is the issue currently under consideration by the Court of Appeal in Great Dunmow Estates Ltd v Crest Nicholson Operations Ltd [2018] EWHC 1460 (Ch).
As regards mediation, a party can attend a mediation just to “go through the motions”. That is unlikely to be a good use of time or cost for anyone, least of all the party who, in contrast, has attended in good faith. You cannot just go through the motions in court (and expect to impress a judge).
Although it is true there is a deterrent in a party doing that in a mediation – in Earl of Malmesbury v Strutt & Parker [2008] EWHC 424 (QB); [2008] PLSCS 70 a costs penalty was imposed on the basis that one of the parties had taken an unreasonable stance at the mediation entirely out of line with the strength of its case – you do have to go to court in the end in order to obtain that costs penalty.
5. Having developed over centuries, court is a sophisticated and highly evolved process and there are countless ways which its manifold rules allow parties to put pressure on their opponents, perhaps to force an early settlement: summary judgment, security for costs, interim injunctions and Part 36 offers are just a sample of the ways in which this can occur.
ADR, inevitably perhaps given that it is a much more recent invention, does not allow this in the same way. Pre-hearing settlements of arbitrations and expert determinations are possible and settlements of a case before a mediation has even taken place may be possible in theory, but statistically they are dwarfed by the number of cases that settle before a trial as a result of one party getting the upper hand tactically through the shrewd use of pre-trial procedural remedies.
NO: Miriam Seitler, barrister at Landmark Chambers, says: “get with the times, Dad. I think you know the four points really”:
1. Court-based litigation is well known to be expensive, time-consuming and stressful to the individuals involved. ADR can offer the possibility of fast, early, cheaper dispute resolution. Mediation can provide a forum for more flexible, creative solutions to disputes, because instead of concentrating on the parties’ rights and liabilities, it focuses on their commercial interests and this means that a great many more issues than those directly in play in the dispute can be resolved.
Mediation, in particular, works. The Centre for Effective Dispute Resolution’s eighth mediation audit in July 2018 showed that 53% of all issued litigation settled by ADR and the percentage would be even higher were one to take into account cases settled in ADR before issue of proceedings. The success rate of ADR is the proof of the pudding.
2. All types of ADR give much more control to the parties than they would ever have in court-based litigation. ADR allows the parties: (i) to set the timetable; (ii) to control the costs; (iii) to leave room for the preservation of relationships; and (iv) to choose the appropriate neutral person to deal with their case. Because the nature and qualifications of the arbitrator or expert can be pre-defined, it ensures that the dispute is resolved by someone with the relevant expertise. To varying degrees, that is not something that can always be said about taking a dispute to court.
The parties can also choose the time, place, and date most convenient to them. This also does not happen in court-based litigation.
3. Big public trials are certainly lots of fun for advocates, but real commercial entities, especially those who are landlord and tenant and therefore need to rub along with each other even once any dispute is over, will not necessarily want their disputes in the public arena, let alone plastered all over the EG news pages.
Arbitrations and expert determinations are confidential by default and the essence of mediation is the facilitating of negotiation towards settlement in a confidential setting.
The confidentiality inherent in arbitration and expert determination and agreed in mediation is of great value. Those processes are usually entirely confidential – the parties, who cannot disclose what occurs in them and this confidentiality will be protected by court order: see Farm Assist Ltd v Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009] EWHC 1102 (TCC).
4. Clients often despair when, especially after a long and expensive slog, they have won a case but the other side obtains permission to appeal and the whole thing is opened up all over again. ADR prevents this (to a large extent). It is very difficult to appeal the award of an expert, save in the very rare cases of fraud or manifest bias, or where the decision is so left-field that it can be categorised as outside the jurisdiction of the expert to make. Awards in arbitration can only be reviewed in narrow circumstances and settlements reached in mediation are almost impossible to open up. ADR brings finality in a way that takes much longer in a multi-tiered and hierarchical court structure.
5. Although it is sometimes said that ADR is not suitable for all types of cases, those of which that can be said are few and far between. People sometimes say that mediation will not be appropriate where there is a need to have a precedent established on a point of law; or where an injunction is sought; or in relation to fraud cases where reputational issues intervene (though a contrary view was taken in Couwenbergh v Valkova [2004] EWCA 676) or where criminal sanctions are relevant, but these situations are rare indeed.
For the vast bulk of cases, as the law on refusing to mediate has recognised, ADR is extremely well suited to a cheaper, quicker and more satisfactory resolution than court can ever be.
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Jonathan was last month’s narrow winner, tying the scores at 4-4. Who will triumph this time?
