Role the of Alternative Dispute Resolution -
Mediation in Commercial Disputes

In the introduction to "ADR and Commercial Disputes", Russell Caller, a solicitor with some 20 years experience, overviews and benefits of alternative dispute resolution over and above those of commercial litigation...

"All government, indeed every human benefit and enjoyment, every virtue and every prudent act, is founded on compromise and barter."

This could be a sound bite from a recent speech by the United States administration in respect of its continuing diplomatic efforts to resolve the conflicts in any world flash point. In fact, these words were spoken by Edmund Burke in a speech in the House of Commons, on conciliation with the American Colonies as far back as March 22, 1775.

Mediation is not new. The resolving of disputes by shuttle diplomacy, compromise and conciliation and just plain talking has been around for generations, but perhaps it is only now at the very outset of the twenty-first century that the commercial world is just waking up to see the real value of resolving commercial disputes in this way as opposed to taking an adversarial approach through the court system.

As with all social change, many different factors have to be in place before true revolution occurs and it would be folly to say that all those factors are yet in place, but the change is certainly coming.

It might be helpful to stop a minute and consider what changes have occurred and indeed what changes have yet to occur in order for commercial mediation to prosper.

Lord Woolf has created the backdrop for the resolution of disputes by mediation. With the introduction of his reforms in April 1999, a clear signal has been given to litigants and their advisers that the settling of disputes in court should be a last resort and that mediation should be used at the earliest opportunity. However, the introduction of legislation on its own does not have sufficient impact without other factors also being in place.

Professional advisers, and in particular lawyers, are notoriously slow in encompassing change. Sadly, this is reflected to some degree, throughout the UK, at the present time.

I have been in mediations where lawyers have become almost deliberately destructive in assisting in the resolution of a dispute because either the lawyer in question has been brought up on the principle that the rule of law is the only safe way to resolve a dispute and any other course of action in his or her opinion simply does not provide the correct result, or more cynically he or she can see many hundreds of thousands of pounds worth of fees slipping away if a dispute is resolved at the mediation.

There is a real fear that if mediation takes off the result will be an enormous reduction in the amount of litigation being conducted and this will have a direct impact on the lawyer's fee income. The reality is that if the individual lawyer spent more time harnessing new alternative approaches to dispute resolution then the loss in litigation fee income might be replaced by offering new varied professional services that encourage ADR. One thing is for sure, the Luddites did not prevent industrial revolution occurring in the early nineteenth century and it is unlikely that lawyers who adopt an obstructive approach to alternative forms of dispute resolution will prevent a fundamental change in approach to the settling of commercial disputes in the twenty-first century.

The driving force that is already in place to encourage alternative forms of resolving disputes is the general concern of businesses and the public at large at the enormous cost of litigation. By this I mean not only the vast professional fees that are charged during the conduct of litigation but equally (if not more so) the enormous cost in management time by businesses in spending three or four years in receiving and considering professional advice and providing instructions to its professional advisers. Perhaps this loss of management time would be acceptable if more often than not the result of litigation is beneficial to the business, but experience says otherwise.

However, at the time of writing, the managing directors, the financial directors, the human resource directors and the general managers of business have yet to fully take on board the benefits of the resolution of disputes by means other than the courts or tribunals. The key to the dispute resolution revolution is that the end users are properly educated in the real value of ADR. I strongly believe that once these end users understand the time and money savings that can be achieve, they will jettison the old adversarial court approach and value the new change.

What this books seeks to achieve is to continue the education process of the professional adviser ad the end user in the value of ADR and in particular mediation in the resolution of commercial disputes. Whether you are a sole practitioner, partner in a small firm, in-house counsel or partner in a large city professional practice, this book can be of a significant practical use to you.

It should be emphasised that this book is not a “novel” to be read from cover to cover because each chapter is self-contained. As a result there may be some repetition. The idea has been to choose a number of areas that commony create commercial disputes and to examine the nature of those commercial disputes and how they inter-relate to resolution of those disputes by the courts and tribunals and also how those disputes can be resolved by ADR.

The busy practitioner needs a book which can be picked up at ease and can be "dipped into" quickly and easily to provide the reader with the practical information necessary to advise clients which form of ADR should be used to assist in the resolution of the particular dispute.

It is a commonly held belief that in order to mediate a dispute, it is not necessary to have a detailed knowledge of the subject matter. I do not subscribe to that view.

I believe the greater the knowledge and experience there is in relation to the subject matter of the dispute, the greater the under­ standing of the dispute and thus the greater the chance of the matter being resolved. Accordingly, each of the chapters have been written by people who are well respected within their profession and have a detailed knowledge and understanding of their subject and simultaneously have been accredited as a mediator by one of the leading mediation training organisations in the UK.

Each chapter loosely follows the same structure so that if the reader wishes to compare and contrast different approaches that are taken in respect of different types of commercial disputes, then he or she can easily do so. However, the final chapter is quite different in that it is a case study of a particular Wills and Probate dispute which shows how mediation actually works in practice.

In addition, there is one separate chapter which is devoted entirely to looking at alternative dispute resolutions generally and in isolation to any particular commercial dispute. It is hoped that this chapter will provide the reader with a general overview of ADR.

It is appreciated that the reader may be sceptical about the true value of resolving commercial disputes by means other than the courts or tribunals. Let me leave you with the following thought.

In 1990 hardly anyone had ever heard of, let alone used, the internet; as we embark upon the twenty-first century the use of the internet has become part of our daily routine. It is impossible to know where ADR and in particular mediation is on the time line of this analogy but there is little doubt in my mind that resolution of commercial disputes by ADR has arrived and sooner rather than later will be embraced by businesses as their main approach to resolving commercial disputes.