Arbitration and Mediation

The overwhelming majority of cases settle. There are often good commercial reasons for reaching a settlement such as limiting the loss of management time or to maintain a good working relationship with the other party where there will be an ongoing relationship. A more pragmatic reason why the parties reaching a negotiated settlement is a common outcome is the desire to limit legal spend and reduce the level of irrecoverable legal fees. The amount of legal costs which may be recovered from the other party might limited by a scale or assessed in the reasonable discretion of the tribunal and in some tribunal costs may not be recovered unless at all.

As a rule of thumb, a successful party is likely to be awarded around 65%-75% of its legal costs in High Court proceedings. Then, it will only be able to recover that, to the extent that the other party has the funds to pay it. As a rough equation, that means a successful Claimant needs to recover around 40%+ of its legal spend in damages, just to break even. Conversely, there is no way a Defendant can come out in a financially better position that if it had not been forced to litigate, even if it wins - and management time is virtually never recovered!

In these circumstances and, additionally, in view of the stresses of litigation it is unsurprising that settlement occurs so frequently.  Both mediation and arbitration have some advantages over court litigation, primarily the obligations of confidence with regards to the evidence and outcome, discussions and terms of the settlement. The procedures can also be quicker, easier and less complicated and less expensive than a litigation case.

Our lawyers are highly skilled in all forms of alternative dispute resolution methods. They fight hard for our clients and the best outcome but are also mindful that, in some cases, when the negotiations are over there needs to be a strong base for an ongoing relationship between the parties.