Civil Engineering Reference
In-Depth Information
the court, which would be contrary to the European Convention on Human Rights.
Further, it is recognized that ADR procedures work best when parties voluntarily
takepartinthemandthatcompellingpeopletodosowouldnotbeefective.he
Pre-Action Protocol for Construction and Engineering Disputes encourages parties
to consider whether some form of ADR procedure would be more suitable than liti-
gation and, if so, agree which form to adopt. However, it expressly recognizes that no
party can or should be forced to mediate or enter into any form of alternative dispute
resolution.
Despite this, however, in the case of
Shirayama Shokusan Co. Ltd
v.
Danovo Ltd
(No. 1)
(2004), the judge granted an order for mediation which had been applied for
by the defendant but opposed by the claimant. The court considered that, under the
Civil Procedure Rules, it has jurisdiction to direct ADR between the parties even if
one party is unwilling. It was also considered that in the circumstances of this case, an
attempt at mediation was worthwhile. he parties were likely to need to work together
infutureyearsandanumberofthedisputesbetweenthemappearedtobeinrelation
to small points where it was considered mediation could be beneficial. They also had
a shared commercial interest.
Where parties have contracted to mediate, the courts have been willing to enforce
the contractual commitment. In
Cable & Wireless plc
v.
IBM United Kingdom Ltd
(2002), the parties' contract contained a mediation clause. It provided that if disputes
arose, they should be resolved through negotiation and that, if that was not success-
ful,anattemptshouldbemadeingoodfaithtoresolvethedisputethroughADRas
recommended to the parties by CEDR.
Cable & Wireless objected to the Court action being put on hold while a media-
tion took place but the judge found against them for two reasons. First, the contract
obliged the parties to participate in an ADR procedure and this was an obligation
sufficiently certain to allow a court to ascertain whether it had been complied with.
Second, it would be contrary to public policy to decline to enforce references in con-
tracts to ADR. It was said that strong cause would have to be shown before a court
could justify declining to enforce such an agreement. It would not be sufficient that
an issue of construction of a long-term contract (as in this case) was involved. The
judge, Mr Justice Colman, stated that parties entering into an ADR agreement should
recognize that:
Mediation as a tool for dispute resolution is not designed to achieve solutions which
reflect the precise legal rights and obligations of the parties, but rather solutions
which are mutually commercially acceptable at the time of the mediation.
As further evidence of the court's active encouragement of mediation, there have been
a number of cases in England in which the courts have considered whether a party
oughttobepenalizedincostsforfailuretomediate.hegeneralprinciple,asestab-
lished by the Court of Appeal in
Cowl and Others
and in
Dunnett
is that a party who
refusestogotomediationwithoutgoodandsuicientreasonsmaybepenalizedfor
that refusal, particularly, in respect of costs. In
Cowl and Others
, Lord Woolf said:
'TodaysuicientshouldbeknownaboutADRtomakethefailuretoadoptit,inpar-
ticular when public money is involved, indefensible.'
