The basic choice is between litigation in the courts or arbitration. The availability of adjudication as a method of obtaining an interim decision has muddied the waters, but it remains to be seen to what extent adjudication will in the long run displace the more conventional methods of dispute resolution.
Clients probably expect their lawyers to more or less agree on which method would be right for them. Unfortunately, they are increasingly befuddled by inconsistent advice: I have heard lawyers who were singing the praises of the courts a few months ago, now unreservedly advocating arbitration.
Changes of heart like this must be particularly confusing in view of the introduction of Lord Woolf’s new Civil Procedure Rules in April this year. The new rules, it was said, would ensure greater access to civil justice, the streamlining of the court system and the provision of a new user-friendly environment where the objectives of proportionality, expedition, economy and fairness would be paramount. The rules certainly identify these as the main factors courts must consider in dealing with a case “justly”. This, the new rules say, is the “overriding objective” of the system.
Why, then, do many lawyers have serious doubts about whether the new Civil Procedure Rules actually further the interests of their clients? Recent statistics show that the number of cases being started in the civil courts has fallen 35% since the rules were introduced.
I have heard of situations where the parties to a dispute that started off in court have felt it necessary to agree to transfer the case to an arbitrator because they were so dissatisfied with how justice under the new system was working in practice. And all this is in the wake of recent landmark judicial decisions that have confirmed that judges’ powers are just as extensive as those of arbitrators when reviewing any matter that arises under a construction contract.
So, just what is going on? Is this new dawn for the civil litigation system really no more than a series of empty promises dressed up with slick soundbites? And if arbitration is really better, what are we to make of past criticisms that it was an expensive and unpredictable lottery, presided over by second-rate decision-makers lacking either the quality or the clout of their rivals in the public sector? Some of the criticisms of Woolf may be sour grapes. After all, one of Lord Woolf’s arguments was that the management of litigation could not be left to the parties and their advisers. Lawyers, it was said, conducted litigation in an adversarial and uneconomical way.
Furthermore, the new rules do have some positive features. For instance, part 36 enables a claimant to make an offer which, if not accepted when it should have been, places it in a stronger position on recovery of costs and interest. This is undoubtedly effective in forcing recalcitrant debtors to pay up.
So, just what is going on? Are the Woolf reforms a new dawn for the civil litigation system or no more than a series of empty promises dressed up with slick soundbites?
Another positive feature, which has already been used in one reported case, is the ability to force disclosure of material documents before proceedings start. In view of recent well-reported decisions, the courts are undoubtedly the natural place to go for enforcement of an adjudication award given under the Construction Act.
However, lawyers have three fundamental problems with the new system. First, it demands substantial front-end loading of costs, which can actually make it more difficult to reach a settlement.
Second, control over litigation, and particularly its pace, has slipped almost entirely out of the hands of the parties and their advisers, into the hands of the judges who, under the mantle of “case management”, can totally disregard the parties’ wishes – even where they agree.
Finally, the new system gives judges complete power to pick which issues they are actually going to decide and the amount of material they will consider. Predicting the outcome of a case and the costs involved is fast becoming as difficult as predicting the numbers in next week’s lottery. Many lawyers believe, perhaps wrongly, that clients would prefer courts to reach decisions according to the law and the evidence, rather than pure expediency.
No one would pretend that arbitration has all the answers. But it does offer the parties control over who will decide the dispute. Furthermore, central to the Arbitration Act 1996 is the principle of “party autonomy”, a valuable concept from which the new Civil Procedure Rules seem to have departed altogether.
Arbitration will frequently be best suited to the needs of the parties, particularly in a complex and potentially expensive dispute. Most heartening is a new determination among the arbitration fraternity to correct the faults that exist with arbitration in this country.
Dominic Helps is a partner in solicitor Shadbolt & Co, which has offices in Reigate, London, Paris and Hong Kong. He can be contacted on 01737-226277.