Dispute Resolution Methods: What Works and What Doesn’t in the UK
As disputes become more complex and international in scope, it’s becoming increasingly important for businesses to choose the right resolution method. Both English litigation and arbitration have their own unique advantages, making them popular choices in the UK. But what are the most popular dispute resolution methods and what are the advantages and disadvantages of each approach?
Litigation vs. Arbitration
Litigation can be a powerful tool for claimants, allowing them to bring proceedings against multiple defendants simultaneously, even where a defendant is not a party to the underlying contract. Litigation also offers access to a highly-skilled judiciary, leading to a decisive outcome that can set legal precedent and benefit businesses and industries. On the other hand, arbitration offers greater autonomy, confidentiality, and the involvement of specialist decision-makers. Arbitration can be particularly useful in industries such as energy and construction where confidentiality is important and specialist industry knowledge is needed. However, the degree of autonomy and the need to pay the tribunal’s fees can lead to higher costs than litigation.
Recent Trends in Applicable Law and Dispute Resolution Clauses
While English law and clauses that submit to the English courts’ jurisdiction remain popular choices, dispute resolution clauses have become more complex in recent years, often incorporating multi-tiered resolution mechanisms such as mediation and senior management involvement. Breach of these mechanisms can jeopardize any potential claim, making it essential for parties to negotiate them carefully.
Brexit’s Effect on Dispute Resolution
Brexit has led to changes in the way the UK recognizes foreign judgments, affecting choice of law and jurisdiction clauses. While the UK has ratified the Hague Convention on Choice of Court Agreements, it does not provide the same level of clarity as the Lugano Convention. The UK is considering joining the Hague Judgements Convention that provides greater assurance and enables enforcement in instances where there is no exclusive jurisdiction clause.
In conclusion, businesses must carefully consider the advantages and disadvantages of each dispute resolution method and be aware of recent trends and changes in applicable law. While English law and litigation remain popular options, arbitration is becoming increasingly necessary for industries requiring confidentiality and specialist industry knowledge. The UK’s post-Brexit changes to dispute resolution must also be taken into account. By carefully negotiating and selecting dispute resolution clauses, businesses can ensure they are protected in the event of disputes.
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