Litigation and dispute resolution

Civil litigation is a broad term that describes court based legal disputes under the common law system (excluding criminal liability).  In civil litigation there are two parties who are having a dispute about a set of facts or, if they are appealing, the application of the law to a set of facts. When businesses want to avoid the costly process of litigation, they may choose alternative dispute resolution instead.

How does civil litigation work?

A judge presides over the dispute while the parties bring submissions and evidence before the court to support their position. The court will determine which evidence is admissible and once the judge has heard all of the evidence they will make a judgment on how to apply the law. This will result in the case being handed to either the plaintiff or the defendant.

An important part of the legal system is the appeals process. If a party disagrees with the decision made by the judge, they can appeal to a higher court to argue that the lower court made an error in applying the law.  Cases heard in higher courts tend to handle more significant legal decisions as they can create broader precedents for future cases.

What alternatives are there to civil litigation?

Alternative dispute resolution (ADR) is the name given to the non-litigious options available when there is a dispute. Most often it is a term associated with the process of mediation, though it also includes conciliation and arbitration.

Mediation is a voluntary process which involves an individual (usually a lawyer) being a party to negotiations between the disputing parties. The mediator does not have the authority to make a judgment on either party, they are only there to to assist the parties in resolving the dispute. The mediated dispute is settled when the parties are satisfied and in agreement. Mediation is distinguished from a simple negotiation by the presence of a neutral party who assists in coming to an agreement.

The conciliation process also involves a third party, but they may not be so neutral. The conciliator will actively introduce options for settlement and will require the agreement be in keeping with regulatory requirements.

In arbitration, the parties agree to abide by the third party’s judgement prior to commencing arbitration.

What are the drawbacks of ADR?

While ADR is significantly cheaper in most cases, the parties lose the protection of the courts. The courts are far more costly and complicated to navigate, but they are that way because they offer extra checks and balances in resolving the dispute. The appeals process is particularly valuable when there is a dispute in the application of the law.

What are the drawbacks of litigation?

Businesses require lawyers to represent them and help them build a case, which typically means significant legal fees. When settling the dispute will cost more than the amount to be settled for, businesses are unlikely to choose a litigious option. ADR offers a middle ground that can be useful in these situations.