Settling in the city
24 October 2005
English Commercial Court enforces obligation to resolve disputes by friendly discussion prior to arbitration
8 July 2014
4 November 2013
9 September 2013
2 December 2013
15 July 2014
'How you have changed in the last three years.' That would be the phrase to sum up what has been happening at the commercial and chancery bar in the field of alternative dispute resolution (ADR). A form of quiet revolution has come about following the Woolf reforms of the Civil Procedure Rules (CPR) in 1999, as today not only are barristers knowledgeable on ADR, but they are also considering it routinely when talking to clients. The days of the more old-fashioned silks professing to know nothing about mediation are gone; these days everyone should understand its benefits, not only in the commercial and chancery bar, but across other specialist bars too.
The spark that lit the mediation revolution for barristers was not the CPR, which through its pre-action protocols provided the context for the change, but the Dunnett v Railtrack ruling of 2002, which urged the profession to try mediation or risk cost penalties. Dunnett gave all members of the bar the impetus to try mediation for the first time - and when they tried it, they liked it. And most importantly, their clients liked it. A recent survey found that 75 per cent of commercial clients were first-time users and 87 per cent said the process had exceeded their expectations, although they had not been sure what to expect.
Mediation has proved popular with members of the commercial and chancery bar because it meets some primary business needs, those frequently demanded by companies today - chiefly, successful resolutions. Additionally, mediations are quick. Most are arranged within a few weeks and last just one or two days, and they are cost-effective compared with the litigation process. Importantly, the process provides a real opportunity to focus on the dispute and understand the different interpretations of the legal, commercial and factual issues that have put the parties into conflict.
This level of concentration and structure provides the right environment for finding workable negotiated settlements. An example of this was a dispute which was one week from trial, where the leading QCs had provided conflicting views of the success of an action concerning rights of way on a large country estate. The mediation provided the first opportunity to bring the real decision-makers out to the location of the dispute and a settlement was reached that evening. The real issues of the case were about the balance of power, security of property, feelings of pride and hurt and being good neighbours. The clients were delighted and highly surprised that they had avoided an expensive trial and had achieved a better outcome than they had expected.
London has become known as the arbitration centre of the world due to the number of arbitrations in the city concerned with disputes from other jurisdictions. Thanks in part to the commercial and chancery bar's recent conversion to mediation, where barristers are suggesting it as a constructive route to a settlement, a similar trend is taking place with international commercial disputes. London is increasingly hosting mediations from other jurisdictions, where one or both parties have no direct link with the civil justice system here, creating the platform for London to become a leading centre for resolving disputes by this method.
Much credit for the depth of the bar's change of opinion must go to the ADR committee of the Bar Council and specialist bar organisations, including the Chancery Bar Association. They have run workshops and seminars on ADR which have been attended by barristers from all areas of specialisation. Beverly-Ann Rogers of Serle Court Chambers, an active Cedr (Centre for Effective Dispute Resolution) Solve mediator and member of the ADR committee, says the programme of events has been highly successful. "The bar's moved from educating its members on what ADR and mediation is, to how to employ mediation most constructively, which is an indication of how well-embedded meditation has now become," she says. Rogers sees in her colleagues a willingness not only to try mediation, but also a desire by several to become skilled in it themselves.
Serle Court deals with a wide spectrum of business law cases, from property and trusts through to cases about large international financial transactions, and in recent times some of the largest cases to come through chambers have been settled through mediation. Barristers are advising parties in diverse cases that mediation can provide what litigation cannot - a consensual process where parties can choose whether or not to settle the dispute. A mediation can run in parallel with litigation, or if preferred the litigation process can be put 'on hold' while mediating. These days barristers are also increasingly recommending pre-action mediation. The discipline can maintain continuing business relationships far more effectively than litigation through the wide variety of settlement options possible over and above monetary settlements.
Perhaps the analogy of a revolution does not do justice to the smoothness with which the commercial and chancery bar has embraced mediation. It is now an accepted part of the legal landscape for the bar because it provides clients with timely and cost-effective settlements not as readily available from litigation.
Eileen Carroll is deputy chief executive of Cedr