law 53


What is happening to all those disputes?


It is a feature of recessions that the number of commercial claims going through the courts reduces. Indeed, it has always been a marker for the end of a recession that litigation activity picks up


This is thought to be because asset values are perceived to have risen while the economy improves, making ‘things’ worth suing for again; and because businesses believe they have more cash to spare for what is often regarded as a discretionary activity – picking fights over differences of commercial opinion.


We seem to be still waiting for this effect to be felt – finance directors are still controlling costs tightly and (it seems) storing up disputes rather than seeking to have them resolved.


It is too early to call ‘time’ on this recession by the litigation activity measure.


What is odder about the current recession is that what might be called ‘save the farm’ litigation is also diminishing. High Court claims are still down compared to the period before the failure of Lehman Brothers heralded our current situation, whereas one might have expected this activity to have held up.


Why is this?


Perhaps it has something to do with risk aversion in uncertain times; perhaps the litigation process is regarded as less attractive than the existence of the dispute. Or perhaps a combination of the relatively benign fiscal regime (the low interest rates) and mounting inflation has resulted in a flaccid acceptance that the problem caused by the difference of opinion, whatever it might be, will ameliorate with time – and might even evaporate.


Of course, problems don’t ameliorate with time and rarely evaporate.


Instead they


become harder to fix. Memories fade, witnesses disperse and documents go missing. The courts are often reluctant to treat as urgent and important disputes that claimants have sat on for years and (perhaps reflecting their isolation from real life), Judges find it difficult to conceive that anything can be more important than bringing claims in a timely manner and sticking rigorously to the court timetable before listening respectfully to the resulting judgment. This can mean that claimants that have left it to the last minute to litigate find that the delay has an adverse impact on their cases, or on their costs recovery.


Whatever the cause, it is clear that business activity, measured for example by VAT registrations and new business formations, appears to have moved ahead of dispute


THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER 11/JANUARY 12 David Pritchard, head of litigation and dispute resolution, and Julie Bond, partner litigation, Manches LLP


resolution activity, as measured by how busy the courts are. Yet (human nature being what it is), there must certainly be many differences of opinion that are festering on the books that are crying out for resolution but where litigation looks too hard, too costly and too time consuming.


It does not have to be that way...


Formal court action might be viewed as a last resort, but it is not the only game in town where disputes are concerned.


The new discipline of alternative dispute resolution offers a menu of interesting options that really needs to be considered. Businesses are increasingly ready to refer complex and important disputes to mediation and expert issue determination as quick and simple ways of exploring the strength of their cases and looking for solutions at what can often be a fixed price.


Mediators are becoming more and more able, as their experience builds up, to generate interesting and commercially astute settlement models that cut through the legal arguments and keep the parties talking – and potentially trading together.


The main mediation training provider, the Centre for Effective Dispute Resolution (CEDR), keeps statistics illustrating the success rates for its mediations that show that about 80% of mediations conclude in settlement agreements being signed.


That is a startling hit rate!


But even if a dispute fails to reach settlement after mediation, the parties should be in a


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better position than before. They will have discovered more about the strengths and weaknesses of their own legal case, as well as an insight into their opponents’ position. They will also have had the chance to look into their opponents’ eyes to gauge their commitment to the dispute that should help them save time and costs. In some circumstances this will give them an edge that helps them to win the battle.


David Pritchard heads up Manches litigation and dispute resolution practice. With one of the largest and most experienced teams in the Thames Valley, Manches’ lawyers can advise on commercial conflicts of all kinds. Its work is wide-ranging and covers everyday contractual and intellectual property disputes, heavyweight international litigation, cross-border litigation and arbitration.


Pritchard comments: “Whatever your problems we deal with them swiftly, robustly, efficiently and always with an eye on the costs. We are not afraid to take aggressive action where the situation demands, nor to recommend mediation if there is sufficient common ground to achieve a speedy settlement. Above all, we are here to help you achieve your commercial objectives”.


Details: David Pritchard david.pritchard@manches.com 01865-722106


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