Dispute Resolution in the Age of Isolation
In this short blog post, Dispute Resolution Partner, Andrew Head, and Senior Solicitor, Bryan Shacklady, take a look at the implications of the coronavirus lockdown for dispute resolution, focusing on three key dispute resolution mechanisms: litigation, arbitration and mediation.
This article was correct as at 26 March 2020. Andrew and Bryan have since produced a further update.
We start from the position that when a dispute resolution lawyer is instructed by a client, it is often already a desperate situation. Client to client negotiations may have failed. A company may be due a large sum that is crucial to its cash flow. An individual may have borrowed heavily to finance a project where another person has defaulted on their obligations. There are a thousand variations, but no one turns to a dispute resolution lawyer as a first option.
Therefore it is crucial that we continue to function and provide effective solutions for clients who may face difficulties, whether they are bringing a claim or defending one. The current situation does not change that, it only means that claims may be even more significant for clients than they would usually be.
Regrettably (and perhaps unsurprisingly given that the court system is treated as a low priority by governments, whatever their political persuasion), the courts have been slow to adapt to the changing situation. The guidance has been patchy, and unclear.
Our experience is that the courts have sought to maintain a business as usual approach so far as possible. Until this week, we have seen future hearings being listed as normal, although we have recently had an application to have a case management conference in the Companies Court heard early refused on the primary basis that the current situation made it undesirable to have an early listing.
The latest guidance from HM Courts and Tribunals service is available here.
The current position appears to be that the courts remain nominally open, but are seeking to conduct as many hearings as possible via video conferencing or audio conferencing facilities. This, of course, raises questions as to how such hearings are audio recorded and transcripts produced. HMCTS's answer is to prefer big name conferencing services with the facility to record calls such as Skype for Business and BT Meet Me. We at Forsters are set up to use Skype for Business, even remotely.
In an earlier version of the guidance, there was a suggestion that the court could record hearings using a mobile phone, or make an order permitting the parties to record the hearing (which would otherwise be forbidden), but that now seems to be absent.
In the short to medium term, it appears inevitable that there will be some disruption and some postponement of matters the courts determine not to be urgent. Careful attention will need to be paid to see whether hearings are postponed equally and en masse, or whether hearings that are lost now will simply go to the back of the queue: there may be an advantage in not pushing for an early hearing now that is likely to be lost later if the current restrictions continue.
Forsters has good experience of conducting arbitrations under LCIA, ICC and other rules. Both the LCIA and ICC remain operational. We are experiencing prompt responses to enquiries about the conduct of arbitrations, although we understand that virtually all staff at the arbitral institutions are working remotely. The LCIA is insisting that people use its electronic filing system, and says it will communicate by email only in all but exceptional circumstances. The ICC is permitting steps that would normally require the submission of hard copy documents to the ICC to be conducted by email.
It remains to be seen how the current measures will affect arbitrations themselves, but there is no reason why arbitrations cannot be conducted by video conferencing if necessary, whether preliminary hearings or trials. Our team has prior experience of conducting arbitration hearings by telephone.
Guidance from the ICC can be found here.
Guidance from the LCIA can be found here.
When parties are open to settlement, and in the hands of the right mediator, mediation can be a useful tool to facilitate the settlement of disputes whether before or after formal proceedings have been taken. Most of us are familiar with a mediation set up where parties meet, often at a neutral venue or at the offices of one of the parties' lawyers, there is a plenary session, and then the parties break out into separate rooms whilst the mediator shuttles between them (and sometimes brings them back into the room together).
Inevitably, the conduct and outcome of mediations are likely to be adversely affected by the lack of all the parties present together under the same roof, which makes communications easier and the pressure to settle greater. Nonetheless, we see no reason why these discussions should not take place using video conferencing software such as FaceTime, WhatsApp video calling or Zoom. The key points to consider are:
- Within each side, will parties be in a separate location? In the current lockdown, it is likely that lawyers will be working from home, and so not in the room with each other even at the same firm, and certainly not with their clients.
- Are all the parties technically able to participate in video conferences? Some clients may be vulnerable (we see this in our contentious trusts and estates and Court of Protection practices) and not au fait with the use of technology. But there can also be practical restrictions: is there a good broadband signal to each location where someone will be joining, for example?
- How can privacy be ensured? Probably the best way is to have the mediator be responsible for organising any plenary sessions, and to then organise any separate breakout sessions. Of course, the advantage of video conferencing is that it is immediately obvious if someone is present who is not meant to be. A mediator who is technically capable will make all the difference.
- Unlike with court proceedings, the recording of mediation proceedings is probably not desirable. If this is not already part of the mediation agreement, there should be a specific undertaking not to record the call.
It will be interesting to review the position over the next couple of months in order to assess whether and to what extent these alternative measures have been used and how successful they have been.
We hope you have found this post a useful resource in the current circumstances. The information was current at 25 March 2020. We plan to keep updating it as circumstances change.
The current global crisis is evolving rapidly, and the rules and guidance for individuals, companies and other entities to manage its implications are similarly fast moving. Notes such as this may be out of date almost as soon as they are published. If you have any questions prompted by this article or on any other matter relevant to you, please get in touch with your usual contact at Forsters.