In virtually all litigation cases, Alternative Dispute Resolution, otherwise referred to as “ADR” is actively being promoted in the Northern Ireland Courts. The Commercial Court, in particular under the new Commercial Hub Directive actively encourages the process of resolving disputes collectively, often with third party involvement.
Pre-empting this approach, ADR is also increasingly being drafted into various commercial contracts at initial stages of transactions, we have seen this recently in particular in Construction Contracts where Arbitration or Adjudication clauses are being vigorously enforced. This is to ensure that parties have employed and explored all options before reaching the door of the Court.
As with any contract, O’Reilly Stewart recommends that parties entering into same should obtain legal advice to ensure the correct drafting any ADR clause in these to ensure their interests are best protected.
Generally, ADR follows one of the following formats, often dependant on the contract:
In Northern Ireland this is generally the most commonly used form of ADR, across all areas of practice. Mediation will involve the assistance of an independent third party, who acts as a Mediator. Their role is to act as a “facilitator” to hopefully reach an agreement between the parties. The Mediation, will not assess points of law or make decisions on the dispute.
Meditations are often useful for parties that have ongoing commercial relationships, that they wish to maintain without the need for often lengthy litigation. But most importantly for all parties they “buy certainty” of settlement, as any resolution that can be reached between the parties to a dispute would be “guaranteed” and not up to a third party Judge to decide on the case.
All discussion during the mediation are without prejudice and as such it allows parties to air their grievances without fear of a perception of weakness of their case.
Particularly prominent in the Construction Sector, namely within JCT and NEC contracts. This process of ADR involves the appointment of an Adjudicator, often through a professional body, whom would be deemed to have a specialised knowledge of the dispute. They are appointed directly, and most importantly their decision is binding pending any final litigation or arbitration decisions.
These ADR options are a mixture of arbitration and mediation, which blend the advantages of these two processes. The parties will commence with mediation, and if an agreement has not been reached, they move on to arbitration, or vice versa. A third party will act as the Mediator/ Arbitrator.
Early neutral evaluation
Once more, under the new Commercial Hub Directive this process of ADR is enthusiastically being encouraged. An “Evaluator,” is appointed, whom has expertise in the field of the dispute. The parties to the dispute will then submit their position to the Evaluator. The Evaluator having reviewed all information presented will provide an opinion on the matter. This is exactly that, an opinion, and as such is not binding.
In cases, particularly of a highly technical nature, an individual, whom has expertise in the specific field is appointed. They must be able to understand the nature of the dispute and all technical elements of same. Once they have made their decision, it is binding.
The use of ADR is now common practice across the jurisdiction to resolve disputes, it is a cost effective, often quicker process to obtaining a resolution for clients. If you are entering into a contract and want to ensure you are protected in the event that a disagreement arises, or indeed, a challenge has already arisen you should contact the team at O’Reilly Stewart who can guide you on the appropriate method of ADR to obtain the best result for your firm.