The principles, procedures and processes involved in dispute resolution

The principles, procedures and processes involved in dispute resolution

Legend

CPR = Civil Procedure Rules C = Claimant D = Defendant TP = Third party

Different options for dispute resolution

• The characteristics of arbitration, mediation and litigation which make them an appropriate mechanism to resolve a dispute.
• NB: following case of Churchill v Merthyr Tydfil CBC [2023]: court can order parties to engage in alternative dispute resolution

Characteristics, Advantages, Disadvantages

Arbitration

• Arbitrator is an expert who conducts proceedings of case (in some ways similar to litigation), however, confidential and more flexible
• Parties can choose arbitrator
• Cost (can be similar to litigation or even more expensive)
• Arbitrators are experts in their field, which particularly in complex cases can be helpful
• Confidential
• Rules out option to go to court [except for in limited circumstances]
• Arbitrator produces binding decision
• Can be provided for in contracts
• Flexibility in terms of choosing rules, jurisdiction
• remedies are more limited under arbitration than under litigation
• Slow
• Possible to enforce remedy under s 66 Arbitration Act 1996
• Adversarial (can damage working relationship)
• Third parties cannot be added after proceedings have begun

Mediation

• Neutral person is appointed to act as neutral negotiator
• Less contentious and more collaborative form of dispute resolution which can help in maintaining relationship
• Risk that no settlement is reached
• Confidential meetings and undertaken without prejudice (i.e., nothing said will affect later litigation)
• Terms of agreement can contain items that a court could not order
• Flexible and confidential
• Quick
• Low cost
• No disclosure
• Privacy
• Ability to withdraw at any point
• Outcome not enforceable
• May not be appropriate where complex issues debated that require expertise
• Binding upon both parties signing an agreement

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• Can be quicker than court process

Litigation

• One party sues the other in the court system
• Court proceedings are carried out in accordance with law and civil procedure rules
• Decision is binding on parties
• Third parties can be added later on in proceedings
• Possible to appeal in certain circumstances
• Cost
• Length - can take a while to conclude
• Not confidential
• Not flexible
• No choice of judge

Resolving a dispute through a civil claim: preliminary considerations

Limitation

Limitation periods apply - claim for must be issued within the following times:

Pre-action protocols

Practice Direction - Pre-Action Conduct and Proposals ("PDPAC")

Basics

• Para. 2: PDPAC applies to all claims where there is no other specific pre-action protocol
• Para. 3: before commencing proceedings, court will expect parties to have exchanged sufficient information to
• (a) understand each other's position
• (b) make decisions about how to process
• (c) try to settle issues without proceedings
• (d) consider form of ADR
• (e) support efficient management
• (f) reduce costs
• Para. 6: where there is a relevant pre-action protocol, parties should comply with that protocol before commencing proceedings

Failure to comply

Failure to comply with pre-action protocols may lead to sanctions imposed by court e.g.,

• Suspend proceedings until steps which should have been taken are taken
• Parties are relieved of obliging protocols
• Ordering party at fault to pay costs
• Ordering party at fault to pay costs on an indemnity basis
• Depriving claimant of interest on damages
• etc.

Exceptions

No need to comply with PDPAC if

• (a) Telling other party before would defeat purpose e.g., where seeking freezing order and claimant does not wish to warn the defendant
• (b) Urgency of application makes it impracticable; e.g., limitation period approaching
• (c) claimant follows a statutory or other formal pre-action procedure

Procedure

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• Court has wide powers/ remedies available
• Suitable for complex issues
• (1) Letter before claim. PDPAC sets out that claimant should issue a letter before claim including:
• (a) Basis on which claim is made
• (b) Clear summary of the facts
• (c) What remedy the claimant is seeking and if it is financial loss, how the amount sought has been calculated
• (2) Defendant must respond within reasonable time - between 14 days - 3 months (in complex cases)

Pre-Action Applications

Pre-Action Disclosure Applications

• Sometimes necessary to investigate a potential claim
• Governed by CPR 31.16
• Order will specify documents or classes of documents and deadline for disclosure

Applications for Pre-Action Inspection of Property

• CPR 25.5 but can occur pre-action in protocol phase
• Inspection application must be supported by evidence to show that property is or may become subject matter of proceedings

Parties and Causes of Action

Parties

• Claimant = party alleging claim and seeking remedy
• Defendant = party addressed in claim, alleged to be the wrongdoer

Causes of action

• Tort = act or omission that gives rise to injury or harm to another and amounts to a civil wrong for which courts impose liability
• Breach of contract = where a violation of any agreed terms and conditions of a binding contract brings about a certain consequence (e.g., remedies)

Calculating limitation periods for claims in contract and tort

• See above

Practice Direction - Pre-action conduct

• See above

Principles and purpose of pre-action protocols governing particular claims and consequences for failure to follow their terms

Pre-action protocol for debt claims

• Applies to
• Business including sole traders and public bodies that bring claims against debtors who are individuals or sole traders
• Does not apply to business to business debts (except where the debtor is a sole trader)

Requirements

Claim must include

• Information on debt owed, including statement of account with details of interest and charges
• Information on how payment can be made
• Recipient has 30 days to respond

Pre-action protocol for professional negligence

• Applies
• To claims made against professionals due to negligence

Requirements

Claim must include

• Summary of facts
• Financial value of claim
• Recipient should inform insurer and acknowledge notice within 21 days of receipt

Personal injury protocol

Applies to

• Primarily personal injury claims which are likely to be allocated to fast track

Not intended to apply to claims which proceed under

• a) RTA Protocol
• b) EL/PL Protocol
• c) Pre-Action Protocol for the Resolution of Clinical Disputes and
• d) Pre-Action Protocol for Disease and Illness Claims

Procedure - steps recommended PI protocol

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• (1) Early contact
• C should contact D as soon as possible
• If takes time to prepare letter of claim, should send letter of notification
• (2) Letter before claim containing certain information must be sent
• (3) promotion of early settlement - C must wait 21 days before issuing proceedings where
• a) D has admitted liability;
• b) there has been full disclosure of medical reports on which parties rely;
• c) C has sent D schedules of loss and damage
• (4) D or insurer should respond within 21 days
• (5) procedure on disclosing evidence; duty on D to preserve disclosure documents
• (6) experts - protocol sets out procedure for joint selection of experts

Road Traffic Accident (RTA) Protocol

applies to low value personal injury claims in road traffic accidents

• Low value straightforward road traffic claims go through RTA portal
• Claims meeting criteria follow a 3-stage process
• Special part 8 hearing process where liability admitted but damages not agreed
• Complex cases or those where liability is not admitted will comes out of portal for litigation

Employer's liability and public liability claims procedure

apply to claims arising from accidents/diseases arising out of a breach of a statutory duty or common law duty of care

Applicable law: mechanisms to determine which country's laws apply to a contractual or tortious claim issued in the courts of England and Wales

Contracts

• Can be agreed by the parties by virtue of a governing law clause
• If none agreed, then Rome I+ Regulation (as retained in the UK) provides specific rules depending on the type of contract
• where these rules are inconclusive, the law will generally be the law of the habitual residence of the characteristic performer (usually the supplier of the goods or service)

Torts

• In respect of non-contractual obligations the Rome II Regulation will apply in most cases
• Under the Rome II Regulation the general rule is to apply the law of the place where the damage occurs or is likely to occur
• Special rules determine the applicable law for certain types of non-contractual obligation, including product liability, unfair competition, environmental torts and torts relating to intellectual property rights
• Private International Law (Miscellaneous Provisions) Act 1995 will only apply to issues relating to tort that do not fall under the Regulation
• Defamation is governed by the common law

Where to start proceedings

Allocation of business between the High Court and the County Court

Overview

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