The early bird

The recession and funding cuts may finally increase the use of alternative dispute resolution techniques by local authorities. Kathy Garside explains what is involved with early neutral evaluation

Mediation and other forms of alternative dispute resolution (ADR) are now part and parcel of the dispute resolution landscape. Mediation is particularly relevant in the current economic climate as it can resolve a dispute flexibly and in a short timeframe, saving on cost and preserving commercial relationships.  

The courts are keen to promote ADR and mediation in particular, and there have been a number of cases in recent years where courts have handed out costs penalties to parties who unreasonably refuse to mediate.

However, local authority lawyers may not be so familiar with another ADR option, early neutral evaluation (ENE). Like mediation, this is a voluntary, private and confidential method of dispute resolution where the parties obtain from an independent person a non-binding opinion regarding the likely outcome of the dispute if it proceeded to trial.

Once the opinion has been provided, the onus is for the parties to negotiate an outcome themselves, with or without the assistance of a third party (for example through mediation).

Both the Commercial Court and the Technology & Construction Court make provision for ENE, however anecdotal evidence suggests that the take-up has been very low. This mirrors our own experience. The perceived drawback is that one party’s position may become entrenched following the evaluation, hence limiting the scope for resolution by continued negotiation thereafter.

Recently, however, we acted in a dispute where we combined the flexibility of the ENE procedure with the binding nature of a quasi-expert determination to produce a resolution which was speedy and cost-effective. Whilst our client did not want to formally concede liability at the outset of the case, it was tacitly recognised that in the long term, liability would not be in issue.  

Accordingly, the parties agreed to “park” the liability issue and focus on quantum. A joint instruction was put to an independent counsel and both parties agreed to be bound by his evaluation.

This procedure saved substantial costs on both sides and assisted the parties to focus on the key issues at an early stage in the case without the need for a full hearing; such an approach also preserved the relationship between the parties.

Kathy Garside is a director at Wragge & Co