Alternatives to Litigation

Most litigation lawyers would agree that litigation is expensive and uncertain. For those reasons alone it is often best to explore alternatives to litigation before a firm decision is made to commence proceedings.

In fact some jurisdictions, such as the Federal Court, now make compulsory for parties to take "genuine steps" to try and resolve their dispute before filing the court papers. If parties ignore the genuine steps requirement it can have costs implications for the parties and/or the solicitors involved.

Options for alternative dispute resolution

Here are some of the options you may wish to explore, with our help, to try and resolve the dispute without determination:-

  • Negotiation – this is when the parties to the dispute have without prejudice discussions to try and resolve the dispute.
  • Mediation – a Court appointed or private mediator may attempt to facilitate resolution by way of confidential negotiation and hopefully compromise [see: Civil Procedure Act Pt 4 and UCPR Pt 20 Div 1]. The mediator will help the parties to identify the issues in dispute, suggest options for the resolution of it, help the parties to consider how useful each of these alternatives are and then try and help them agree on an option that is acceptable to them. At no stage will the mediator give legal advice to the parties since that is the role and function of the solicitor/barrister involved. The mediator should also disclose any relevant conflict-of-interest upfront. Usually the mediation agreement sets out these matters including the costs of the mediation.
  • Arbitration – the parties select an arbitrator who makes a decision. The process is private and confidential but not “without prejudice” [see: Pt 5 of Civil Procedure Act 2005 (NSW)]. This process may have advantages with respect to the enforcement of an award in a foreign jurisdiction depending upon the circumstances.
  • Expert determination – an independent expert gives a binding decision. The parties pay for the expert’s costs. This is often best for single technical issues and not legal questions.
  • Calderbank offers or perhaps payment into court. It is important to get help in preparing a calderbank offer so that the chances of it being valid is increased.

In some cases litigation, despite its costs, delays and uncertainties, could be appropriate especially when you are dealing with someone who is regarded by you to be dishonest [see: Michael Legg and Sera Mirzabegian, “Appropriate dispute resolution and the role of litigation” (2013) 38 Australian Bar Review].

Some of the Benefits of Mediation

Dispute resolution through the court system typically requires the parties to surrender control of the proceedings to the court often as a result of "managerial justice" and case management. For this reason it can make sense to choose mediation over court resolution as it will allow you to maintain a degree of control.

There can be no argument about the cost savings of mediation. In the case of a private mediation there will not be any Court filing fees nor will there automatically be an order as to costs since that is capable of agreement. In short mediation can be a particularly sensible way to resolve a dispute in a cost efficient manner.

Some of the other benefits of mediation include the likelihood of your personal and business relationships being preserved, your ability to craft a flexible solution that works for you and the other party keeping in mind that court orders lacks such flexibility. Given the high rates of success that mediation enjoys it should be a "must do" exercise in the majority of commercial disputes.

* This content does not purport to give legal advice. Readers must obtain their own legal advice, that applies to the particular circumstances of their case, before taking any action at all.