On 24 August 2017, the Chartered Institute of Arbitrator’s Young Members Group (YMG) and Aspiring Solicitors (AS) held their first seminar together regarding “Resolving Disputes Out of Court: What Every Trainee Solicitor Should Know”.
Amanda Lee, Chair of the Young Members Group
Chris White, founder of Aspiring Solicitors, introduced the event by welcoming the attendees and thanked Amanda Lee, Chair of the Institute’s Young Members Group for her presentation.
Chris then thanked CIArb YMG for their support, as they pledge to work together increasing diversity in the field of private dispute resolution.
Discussing his own background, Chris explained that when he was a successful lawyer in practice he was extremely passionate about access to the legal profession and equality. When the opportunity presented itself to develop Aspiring Solicitors, he welcomed the opportunity with open arms.
Chris spoke of the importance of Aspiring Solicitors and discussed how the organisation has developed from focusing on diversity, to encouraging people with disabilities and members of the LGBTQ community to become a solicitor.
Since its inception, the organisation has continued to grow in numbers.
Finally, Chris thanked Amanda for her support and for taking the time to discuss Alternative Dispute Resolution (ADR) with the attendees.
Amanda began by introducing the concept of ADR. She explained that while ADR previously would have been viewed as “alternative”, different avenues of dispute resolution have now become “mainstream” and a popular option over going to court.
Amanda followed by giving an overview of the different forms of ADR:
- Cost: the right form of ADR can help to keep costs down.
- Arbitration: this is a “creature of contract”. The parties choose by contract to give power to a third party to hear and decide the dispute: a decision which will resolve in an “award” and by which the parties will be bound. The arbitration can be ad hoc or institutional arbitration. There are many institutions including the London Court of International Arbitration (LCIA) and the International Court of Arbitration at the International Chamber of Commerce (the ICC). An ad hoc arbitration is governed by rules determined by the parties for that arbitration, or at the discretion of the arbitrators.
- Mediation: this is a voluntary process and the parties must agree to mediate: it cannot be imposed upon them. There is no arbitrator to listen to both parties’ side of the story, nor will there be an “award”. The parties appoint a mediator, who is a neutral third party with training in facilitating the resolution of disputes. Amanda emphasized that often the parties must cross a “psychological barrier” to understand that they may have to concede a position or point to come to an agreement: this may be often a difficult bridge to cross when parties would like “their day in court”. This process is often more beneficial in certain circumstances, depending on what the parties want. A judge cannot force a party to apologize, however, a mediator can facilitate an understanding between the parties to a point where an apology may be possible. If the parties reach a resolution then this will be drawn up in a settlement agreement, bringing the proceedings to an end. The terms of the settlement agreement can be enforced in the same way as the terms of any contract may be enforced.
Finally, Amanda illustrated that there are further methods of ADR which are available to parties such as adjudication, expert determination, conciliation and negotiation. Expert determination is often used in shareholder disputes while adjudication is often used in construction disputes.
Benefits of ADR
Drawing from her experience in international litigation and arbitration, Amanda outlined the benefits of ADR and why parties need to be made aware of the options available to them in solving their dispute.
- Confidentiality: ADR is normally confidential, unless the parties agree otherwise. Amanda gave an example where a client is a celebrity and does not want their entire life to feature on the front page of the tabloids, then ADR represents an opportunity to keep the dispute off the radar.
- ADR is flexible: Where disputes relate to something rather technical, like oil pricing or the value of a commodity such as grain, a judge may not be the right dispute resolver for your client.
- Preserve business relationships: Parties can make what they wish of their ADR process. Creative solutions can be found that allow both parties to save face and business relationships to continue. This is particularly valuable in small industries where everybody knows each other and market reputation is key.
Building Knowledge for Young Solicitors
Amanda emphasized the importance of building your knowledge of ADR and how such knowledge can enhance your skills set in other areas of the law.
Amanda discussed one of the key benefits of being aware of ADR for young people in the profession: avoiding the “midnight clause”.
Having a good knowledge of ADR will hopefully ensure that hastily drawn dispute resolution clauses in contracts are properly drafted and will not cause issues in the future.
Therefore, a broad understanding of ADR enables to you ensure that the dispute resolution clause is not a boilerplate clause – it needs to be fit for purpose. This will potentially save your client time and money in the future.
Knowledge of ADR will assist in time efficiency and prevent time wastage. In Amanda’s experience, she has found that there are often multi-tiered dispute resolution clauses which will force parties to mediate or attempt settlement before beginning court proceedings.
Furthermore, ADR gives lawyers a multitude of options to solve the dispute.
Amanda encouraged all attendees to think about the nature of the dispute: there is no ‘one-size-fits-all’ approach to dispute resolution and just because something worked well for a previous dispute, there is no guarantee that it will work again.
Amanda gave the example of a client who is based in the US. The client was not keen to fly to the UK to have a mediation because of its expense and the value of the claim was not sufficient to justify the cost of flights.
In the circumstances, the logical approach was to offer telephone mediation or mediation via Skype. Technology can assist in addressing issues caused by geographical difficulties.
Amanda’s presentation was followed by an enthusiastic Q&A session with the attendees. Students were interested in how the sector affected the selection of ADR choice.
Students were also interested in discovering more about Amanda’s career path to ADR and arbitration.
The evening concluded with a reception and networking, generously hosted by Ashurst.