For over 25 years, ADR has helped to resolve countless professional negligence claims against law firms. But are you getting the most out of ADR and what does the future hold?
Mediation remains the preferred method of ADR for many professional negligence cases. Research published earlier this year by the Centre for Effective Dispute Resolution (CEDR) indicates that 74 per cent of all cases now settle on the day and a further 15 per cent settle in the weeks following mediation. With those success rates, it is hardly surprising that many within the legal profession regard mediation as the best method for resolving difficult disputes.
But are you getting the best out of mediation? CEDR’s research suggests that negotiations are becoming tougher. This could reflect the fact that simpler cases are settling before getting to mediation. However, CEDR’s research identified a growing resistance by parties and their lawyers to hold joint sessions– a step that (when used constructively) can help to manage the claimant’s expectations, gain a valuable insight into the claimant’s commercial needs, and pave the way for a better settlement. Many mediators also reported a rise in parties being poorly prepared, disagreements over negotiation strategy, and interpersonal conflicts within negotiating teams.
The message that emerges is a simple one. Mediation remains extremely effective but achieving the best results still comes down to good preparation, engagement with the process, and a clearly defined negotiation strategy.
The effectiveness of mediation can also lead both claimants and defendants to discount other methods of ADR. In May 2018, the professional negligence pre-action protocol was amended to require all Letters of Claim to indicate whether the claimant is prepared to refer the dispute to the professional negligence adjudication scheme (the “Scheme”). But take up for the Scheme remains low, with many parties seemingly reluctant to consider it.
So why isn’t the Scheme more successful than it is when adjudication of construction disputes is commonplace? In part, it may simply be fear of the unknown or a reluctance on both sides to commit themselves to a binding decision without going through a full litigation process. However, the Scheme is flexible with parties having the option to elect for a process which results in a binding but not final result. That said, none of the seven cases which formed part of the pilot for the Scheme continued into litigation. That appears to reflect the experience of those who deal with construction disputes.
In other words, most parties who engage in adjudication see its benefits and are willing to accept the reasoned decision of an adjudicator as conclusive. Compared with full litigation, the Scheme also offers a cheaper and faster way of resolving claims, enabling law firms and their insurers to contest cases which might not be commercially viable to run to trial. With that in mind, perhaps the Scheme is a more attractive option than its current take up suggests.
It’s also worth bearing in mind that mediation and adjudication are not the only options. From structured pre-action meetings to help narrow the issues, through to binding expert determinations on specific issues and non-binding early neutral case evaluations, there is a role for ADR in every dispute. Although not strictly a form of ADR, you may want to take advantage of the shorter and flexible trials schemes which have been piloted in the Business and Property Courts and are set to become permanent from October 2018. So, think laterally about the best way of resolving a claim and don’t be afraid to be innovative.
And what of the future? A report published late last year by the Civil Justice Council’s ADR Working Group highlighted the potential for Online Dispute Resolution (ODR) to play an increasingly important role in ADR, particularly as an alternative to mediation for low value cases. However, the council rightly concluded that while ODR merits further exploration, more work needs to be done around issues such as privacy, security, hosting and methodology before it can really take off. As it stands, ODR also lacks the ability to come up with a creative approach to multi-faceted disputes. That of course may change as Artificial Intelligence systems become increasingly sophisticated. However, in the short to medium term, ODR is unlikely to dislodge mediation from its position as the most commonly adopted method of ADR. Mediation not only offers parties a means of resolving a dispute. When used in the right way, mediation can be a process which opens up the opportunity for innovative solutions which can help a law firm preserve a valuable client relationship.