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Alternative Dispute Resolution

There is so much pressure on parties to a dispute to engage in alternative dispute resolution (ADR) and there are many differing options available, from the informal: negotiation through correspondence; round table meeting; lawyers only round table meeting; to the more formal: mediation; conciliation; arbitration. The benefits of resolving a case using one of these methods should not be underestimated.

In cases where the claimant has what appears to be a genuine case but the defendant wishes to protect themselves as much as possible, in the absence of sensible or acceptable offers of settlement, formal ADR can be a far more productive and cost effective way of reaching a resolution, when successful. 

Mediation is more cost effective than Arbitration but is still not inexpensive, particularly if the parties are assisted/attended by both barristers and solicitors.  However, if agreement can be reached at mediation, the costs saving of not proceeding to trial is immense.  In one particular example I can cite, had the mediation failed and if the parties had not thereafter successfully negotiated a settlement, the case would have proceeded to trial.  My own client’s further costs of proceeding to trial, following mediation, would have been in excess of £48,000. 

The claim was for provision from an estate under the Inheritance (Provision for Family and Dependents) Act 1975 and, often, the parties’ legal costs in such a claim will be paid by the estate, prior to any award to the claimant and thereafter distribution of the remainder of the estate to the beneficiaries.  In the case I have referred to, if the Defendant’s costs of trial had been only half the Claimant’s costs, this would still have meant that potential for a further circa £72,000 to be deducted from the estate in lawyers’ fees for the trial alone, in addition to costs already incurred.  Mediation saved not only this but also the immeasurable stress which would have been experienced by the parties in proceeding to trial. 

There is always room for argument that a result at trial may be better.  Equally, the risk is that it may not.  The longer a case proceeds, particularly in cases where costs are to be met by the subject monies in dispute, the lower a representative value of a 30% or even 40% share will be (e.g. £250,000 estate: 40% share = £100,000. Deduct (additional) costs of trial, 40% share becomes just £71,200). 

Additionally, the ill will or fear of or between parties may be such that they do not wish to see each other.  Mediation can again avoid this, with each party remaining in their own, separate room.  At trial being in the same room is unavoidable. 

Ultimately, my client in the Inheritance Act mediation achieved a far greater result than she original anticipated.  She had no idea that she may have had a right to bring a claim but, being a person who shies away from confrontation, her greatest fear was a trial.  My client had feared she would lose her home and although the property had been held as joint tenants, meaning she automatically inherited the other half “share”, she was saddled with a mortgage which she could ill afford.  Fortunately, the results of the mediation means that she can now enjoy her home without the fear of having to sell up or lose it under possession proceedings.  Nor will she have to endure the torture of trial. 

For additional information regarding ADR, please contact Frances Woods on 01905 721600 or via email frw@parkinsonwright.co.uk

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