UK Law and Practice Contributed by: Alex Cook, Helix Law
ADR – especially mediation and usually all negotiation – is conducted on a confidential and privileged basis, meaning it is “off the record”. Negotiations are often framed as being on a “without prejudice save as to costs” basis, and mediation is subject to mediation privilege. This means that these communications can- not be referred to the court – in the case of mediation, ever, and in the case of “without prejudice save as to costs” correspondence, only on the narrow issue of costs. Parties remain free to proceed with litigation or arbitration if ADR fails but a well-advised party will not refuse to engage in ADR or mediation without very good reason. Whilst not strictly “mandatory” in prac- tice, ADR is essential in this jurisdiction. 4.4 Timing of ADR ADR in England and Wales can take place at any time. It is often used before proceedings are issued (in line with pre-action protocols), but it can also occur during litigation, including after disclosure or even close to trial. Courts actively encourage parties to engage in ADR throughout the life of a case. In commercial disputes, mediation often takes place after court proceedings are issued and statements of case (particulars, defence, reply and any counter- claim or requests for information) have been finalised. Engaging in ADR does not stop limitation periods from running and care must be taken to ensure that a claimant does not lose the opportunity to pursue an otherwise good/strong claim merely because of ongoing negotiation. If there is a need and desire to prevent limitation from expiring and to avoid the need to issue a claim, that can be achieved by entering into It is up to the parties involved to ensure that any form of ADR is confidential and/or privileged, and this must be made expressly clear beforehand. The starting point is that negotiations are open unless expressly confirmed as being entered into on a without preju- dice save as to costs and/or subject to contract basis (meaning “off the record”). Mediation is typically confidential and privileged, with the parties usually entering into a mediation agree- ment which expressly confirms this beforehand. For a standstill agreement. 4.5 Confidentiality
this reason, nothing discussed or obtained within the process of the mediation bubble can be referred to in court. 4.6 Costs ADR costs are usually agreed between the parties. In mediation, it is common for the parties to share the mediator’s fees equally, unless they agree otherwise in any settlement. If a dispute settles, the parties typically agree how overall costs are allocated as part of the settlement. If it does not settle, the court may later take each party’s conduct in ADR into account when deciding costs in the litigation, and may penalise a party who unreason- The courts in England and Wales take a strongly sup- portive and increasingly proactive approach to ADR. It is now seen as a standard part of the dispute resolu- tion process, not merely an optional alternative. Courts actively encourage parties to engage in ADR at all stages, and can now, in appropriate cases, order them to do so or stay proceedings to allow it. A party who unreasonably refuses to mediate may face costs sanctions, even if they ultimately succeed at trial. Overall, the judicial attitude is that litigation should be a last resort and ADR should be seriously considered in all commercial disputes. ably refused to engage. 4.7 Courts and ADR In England and Wales, legal fees are governed by a mix of contract, regulation, and court oversight. Solici- tors are required to ensure transparency and fairness in respect of fees under SRA rules governing conduct. Clients must agree charges based on clear informa- tion having been provided to them. Fees are usually agreed privately. Increasingly, niche boutique firms are well placed to offer alternative funding options for commercial disputes where they are only paid based on their success, and this is a growth area in compari- son to the traditional hourly rate or fixed-fee models. 5. Costs, Fees and Funding 5.1 Legal Fees
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