Three ways to avoid your day in court

It is the same in dispute resolution between companies as it is in taxidermy there, are more ways than one to skin a cat. Mohammed Moeini explains three alternatives you can use to deal with a business dispute.

Most disputes are resolved by one form or sometimes a combination of ADR mechanisms. ADR is not appropriate for all cases but resolving disputes can be advantageous, it’s less costly and time consuming than going to trial.

There are three types of ADR mechanisms

  1. Non-binding ADR processes without the involvement of an independent third party
  2. Non-binding ADR processes with the involvement of an independent third party
  3. Binding third party processes e.g. expert determination etc.

Negotiation between the parties

This is the most flexible and informal method of the various ADR options available.  The parties, either by direct communication or through their respective advisors, attempt to resolve the matter in dispute without involving an independent third party.

Negotiations are usually conducted on a “without prejudice” basis meaning if the settlement discussions do breakdown, the parties’ rights are not prejudiced.  The process is also intended to be private and confidential and as such, depending on the conduct of the parties, it can save relationships breaking down and/or reputations being damaged as a result of the dispute.

The process is non-binding unless parties agree legally enforceable settlement terms.  This method of ADR can be less costly and least time consuming than the other processes.


Mediation is a process in which an independent third party facilitates the discussions between the parties to work towards a negotiated settlement of the dispute.

The process is voluntary, non-binding, flexible, confidential and without prejudice.  Usually the parties are required to treat all discussion and documents produced for the purpose of mediation as confidential.  Therefore, if the dispute does not settle at mediation, anything said or written cannot (except in certain circumstances) be used in later or continuing Court proceedings.

The stages involved in a mediation include: (i) parties agreeing to mediate or complying with the contractual obligations to mediate (as applicable); (ii) identifying and selecting a suitable mediator and parties agreeing on the appointment of the mediator; (iii) preparing for mediation (e.g. case analysis, tactics, preparation of the mediation position statement, etc); (v) exchange of mediation statement between the parties and subsequent confidential communication between each of the parties and the mediator prior to the mediation; (vi) attending the mediation, which itself entails: initial joint meeting between the parties; private meetings between the mediator and each party; the mediator conveying messages between the parties and further joint meetings (if appropriate); and (vii) concluding phase i.e. documenting settlement terms or continuation of the dispute (if settlement is not achieved).  At times, the dispute does not settle at the mediation, but thereafter parties do reach settlement (with or without the mediator’s involvement).

The costs involved in a mediation include: (i) your advisers’ professional fees; (ii) venue costs (which is usually split equally between the parties) if the mediation is held at a neutral venue; (iii) the mediator’s fees, costs and expenses (which is usually split equally between the parties), etc.

Exper Determination

Generally, expert determination is an informal process and it can be used to resolve different types of disputes, in particular, those which involve specialist or technical issues.  Expert determination is likely to be less suited to matters where the parties fundamentally dispute the facts or those disputes that turn entirely on points of law.

Expert determination can be arranged on an ad hoc basis, but typically the process is used pursuant to ADR provisions in commercial contracts.

In general, the stages involved in an expert determination are: (i) parties agreeing to the expert determination process or complying with the relevant contractual obligations (as applicable); (ii) selecting a suitable expert and parties agreeing on the appointment of the expert; (iii) agreeing the terms of reference to the expert, which will need to deal with various matters including; identifying the matters in dispute, the scope of the expert’s determination, the timetable, the format in which the expert should deliver his/her report, etc.

The expert’s decision is binding on all the parties unless there are grounds (which are limited to certain circumstances) for setting aside the determination.

If you would like to find out more about the ADR processes highlighted above or the other ADR options available, please contact Mohammed Moeini (e:; t: 0121 374 2328).