Regular readers of blogs by the Brodies litigation team, or those who follow members of the team on LinkedIn, will have seen that, during the last few weeks of 2021, we asked for responses to a series of questions in the arenas of dispute avoidance, management and resolution. The rapid increase in the use of video conferencing and other virtual tools for court hearings and other forms of dispute resolution since the start of the pandemic had got us all thinking about how dispute resolution could work better for those involved, and we wanted to hear from those who actually used, or may need to use, commercial dispute resolution methods.
We received 130 responses to the questions posed and found the results to be illuminating and, in some cases, surprising. We've set out the full set of results below, but some of the highlights included:
- Almost two thirds of respondents (64%) said that the parties to a dispute should be forced to try alternative forms of dispute resolution before going to court.
- Cost was the leading factor when selecting a commercial dispute resolution method for the majority of respondents (60%), with significant minorities selecting 'the time taken to get a result' or 'control over the process' (20% in each case).
- Most of those who responded prefer to avoid having disputes resolved judicially, with only 5% of respondents saying they thought a court would be best placed to resolve a dispute involving their business (as opposed to trying to resolve matters between the parties themselves, or with the involvement of a mediator).
- Respondents were very much in favour of having some form of dispute resolution procedure ("DRP") clause in their contracts, with only 11% saying their preference would be to have no DRP at all.
- 84% of respondents said they were either very likely or quite likely to consider using a form of online dispute resolution if they were involved in a dispute.
Whilst many of these results aligned with our own experiences, some were more unexpected (albeit they come from a relatively small sample size). For example, it can take a long time for a dispute to be resolved, which is often a cause of frustration, but only 20% of respondents to question two cited the time taken to get a result as the most important factor to them. Price sensitivity and the desire to "get the right result", even if it takes time, appear to have won out.
We think there are some key takeaways, both for us as lawyers and for businesses, the biggest of which is the confirmation that businesses have moved away from the traditional litigation mindset and are more prepared to embrace alternative forms of dispute resolution. Whilst this certainly matches our experience, with negotiation and mediation often the first instinct before positions have become entrenched, we do still find that clients appreciate the relative speed of the Commercial Court and of arbitration, as well as the certainty and ease of enforceability which they offer, when methods such as negotiation and mediation have failed to resolve their dispute.
Cost was identified as the most important consideration for many when becoming involved in a dispute and there seems to be a recognition that, at least from this perspective, the court is not always the best forum for determining the issue. Instead, a significant majority of those who participated in our polls would appear to consider that those who are involved in the dispute would be best placed to resolve matters, either themselves or with the assistance of an independent mediator.
The majority view was that the parties should be forced to consider alternative forms of dispute resolution before going to court and that their contracts should set out either a fixed or flexible dispute resolution procedure which parties would need to adhere to. Whilst there may be a concern that alternative dispute resolution will be less effective if parties are forced to engage in it, sometimes one or both of the parties need an initial push to properly focus on the issues which are in dispute and engage.
There is also a clear willingness to embrace technology and consider using online dispute resolution methods. We would expect that, as businesses have been forced to utilise technology over the last couple of years (potentially even in the way that they have resolved any disputes which have arisen during that period), they will have become more comfortable dealing in this way and, perhaps with cost and other such considerations in mind, have gained a better appreciation of the potential benefits and efficiencies of online dispute resolution.