The Go-To Dispute Resolution Solicitors

Damages for distress and inconvenience are not generally recoverable in most commercial disputes. The main exception is in a narrow category of claims relating to travel and holidays, where the courts have held them to be recoverable but generally very modest in amount. They can also be recovered in claims of nuisance, where there has been interference with a person’s ability to enjoy their property, e.g., persistent unpleasant smells or excessive noise from a neighbouring business. Again, these tend to be very modest.

The Civil Procedure Rules require parties to a dispute to exchange information about what is claimed and why the other party denies the claim before embarking on court proceedings. The Practice Direction on Pre-Action Conduct requires the Claimant to write a letter of claim stating the basis for the claim and allowing the Defendant a reasonable period to respond.

If the parties cannot agree on settlement terms, they may consider agreeing to use some form of alternative dispute resolution (ADR) to try to settle. This can be informal (through a meeting or exchanging letters offering a compromise) or more structured, using a third-party mediator or an expert to determine the dispute.

If no agreement is reached on ADR, or it is pursued but does not result in a settlement, the Claimant then issues court proceedings. Debt claims of up to £100,000 can be issued online through the government’s Money Claims Online portal.

The Defendant must then file a Defence stating why they dispute the claim. After they do so, the claim will be transferred to the local county court of one of the parties, and the court will give directions to the parties on what steps they must take to prepare the claim for trial.

A judge then hears the claim at a final hearing, at which they decide whether the claim is successful and who should pay the costs of the proceedings.

Alternative Dispute Resolution is the catch-all name for various ways that parties can try to resolve a dispute without having to proceed to trial and have a judge determine right and wrong.

The courts cannot compel parties to use ADR – but they do have powers to impose sanctions on parties whom it decides have unreasonably refused to mediate, usually involving preventing them from being able to recover some or even all of their legal costs.

It can be informal, with the parties agreeing to meet “without prejudice” (i.e. what is discussed is “off the record” and cannot be referred to in court) to see whether there is a basis for compromise or just through exchanging letters setting out what they would be prepared to accept.

It can be more formal. The most common form of ADR is mediation, where the parties agree to appoint an independent third-party mediator whose job is to try to assist them in reaching their compromise. The mediator will not decide who is right and wrong—their job is to try to facilitate settlement by helping the parties find their solution rather than imposing one on them.

Another form of ADR is expert determination, which is usually more common in technical disputes where the parties might agree to appoint an independent expert in whatever field is in dispute to decide who is right and wrong and for the expert to make a binding ruling.

There are different forms of dispute resolution:

Litigation involves issuing proceedings in the High Court or County Court to reach a final hearing (“trial”) before a judge. The judge will determine whether the claimant succeeds in their claim and which party should pay the legal costs incurred in the litigation process. The Civil Procedure Rules set out the rules which parties must follow in pursuing a claim through the courts.

Arbitration follows a similar path to litigation, but rather than issuing proceedings in the court system, the parties agree to instruct an arbitrator to determine their dispute. They pay their fees jointly and are free to agree to whatever rules of procedure they may choose, although where they do not, the Arbitration Act 1996 provides the default rules that will apply. In practice, arbitration these days follows a similar path to litigation in preparing the claim before the final arbitration hearing.

Mediation is a form of alternative dispute resolution in which the parties agree to appoint an independent specialist mediator to help them resolve their dispute. The mediator will not determine who is right or wrong—their job is to try to find a solution that perhaps neither party is happy with, but both can live with.

Mediators typically have several techniques that they can use to try to break an impasse and move the parties toward a settlement, but ultimately, they can only facilitate the parties’ reaching their settlement, not determine the dispute in the same way that a judge or arbitrator would.