UK Law and Practice Contributed by: Alex Cook, Helix Law
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods The main methods used to resolve commercial dis- putes include the following: • Litigation (court proceedings) involves the issuance of court proceedings, usually in the High Court Business and Property Courts, Chancery or King’s Bench Divisions, or specialised commercial courts for disputes of significant value or complexity. Liti- gation leads to judgment being entered, producing a binding outcome. • Mediation is a form of alternative dispute resolution (or ADR) that is an entirely confidential and private (privileged) process, involving a neutral venue and third party (the mediator) acting as a facilitator to help the parties, with representatives, try to reach an agreement. • Negotiation involves direct, formal or informal exchanges of correspondence, meetings or calls between the parties, usually by solicitors instructed on their behalf. Negotiations in this way can be either open or without prejudice save as to costs (meaning “off the record” except when it comes to seeking costs recovery). • Expert Determination is a binding or non-binding process where an expert in a particular issue is instructed to resolve specific issues, usually relat- ing to value, a specific technical aspect, or factual issue in dispute. • Arbitration is a binding, private process where a third party acting as judge (the arbitrator) decides the outcome – often a preferred option in interna- tional commercial contracts primarily for reasons of privacy. 1.2 Choice of Dispute Resolution Method Litigation is the default and most comprehensive mechanism, with mediation also featuring prominent- ly. Arbitration is pursued in certain high-level com- mercial as well as construction disputes. More gener- ally, some form of ADR, including mediation, is now expected to have been attempted in most disputes, particularly in commercial litigation. ADR is often used alongside litigation, rather than merely as a standalone alternative.
1.3 Key Dispute Resolution Trends The importance of ADR continues to rise, becom- ing increasingly embedded within the framework of litigation due to public policy expectations. There is an increasing emphasis on early intervention and attempts to avoid escalation to court where possi- ble. Litigation remains a central pillar and the ulti- mate option to resolve disputes, but it is often used, threatened and pursued, together with ADR, to seek a swifter and cheaper resolution of disputes. In England and Wales, limitation periods are expressed within the Limitation Act 1980. The specific limitation period depends on the type of claim or the “cause of action”. The majority of commercial claims must be issued in court within six years of the date of the act or ommission or breach giving rise to the claim. Where a contract is executed as a deed, the limitation period is 12 years. Shorter periods apply in certain cases, including three years for personal injury claims (from the date of injury or knowledge) and one year for defa- mation. In cases involving professional negligence, a three-year limitation period applies, but only from the date of knowledge, subject to a 15-year long-stop. Limitation may also be postponed in cases of fraud, concealment, or mistake until the claimant discovers (or could reasonably have discovered) the issue giving rise to the claim. 2. Litigation 2.1 Limitation Periods Limitation periods are critical in this jurisdiction, and expiry of limitation will usually operate as a complete defence to a claim regardless of the merits of the underlying claim. 2.2 Court Structure In England and Wales the court system is hierarchical, with different levels handling disputes depending on value and complexity. Civil claims mostly begin in the County Court, which deals with lower- to mid-value disputes, and cases are allocated to a track. Tracks in the County Court include the small claims, fast track, intermediate track or multi-track, with the track depending on the complexity and value involved in the dispute. More serious, complex or high-value matters
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