Dispute resolution in a post-coronavirus world
The Civil Justice Council has launched a rapid review into the effect of COVID-19 measures (such as remote hearings) on the operation of the civil justice system. The consultation aims to provide an overview of current measures and offer practical recommendations to inform HM Court & Tribunal Service's future guidance and approach. Given the urgency and importance of keeping the system operating with confidence - even now – the review truly is rapid: launched on 1 May 2020, it will run until 15 May 2020 and report by 22 May 2020.
The Foot Anstey Dispute Resolution team will be submitting its response based on our experience (good and bad) of how the courts and its users have adapted. In doing so, we hope that the opportunity is seized to move away from outdated approaches to disputes.
Over the coming weeks, we will be publishing short viewpoints on how to get the best out of the system (as is) but, crucially, what can be done to improve outcomes – particularly focussed on stakeholders' key demands:
- access to justice (including proportionate cost)
- speed of resolution
- alternative approaches
Post COVID Dispute Resolution
Since the early stages of the pandemic, we have seen many examples of businesses trying to work together to ensure that they are able to continue their operations, in whatever form. A few companies have pulled dusty contracts out of virtual drawers to check for force majeure clauses or considered what else might dictate what happens when there are problems in a supply chain. There has been an impressive degree of co-operation to resolve the immediate issues the common crisis has caused.
It seems to be generally accepted, however, that there is a limit to how long this goodwill can last and, when daily life returns to business as usual, so will commercial relationships. At some point, Boards will need to be able to satisfy their shareholders and stakeholders that they are doing what they can to uphold their organisation's rights. The end of forbearance will inevitably lead to disputes.
What will be the best way to resolve these disputes?
- The Court system is already under considerable strain with some hearings taking place virtually but many being postponed. A perfect storm will soon hit the civil justice system - involving a combination of on-going lockdown restrictions, a backlog of cases, overstretched HMCTS resources, increased volume of commercial disputes and, most likely a huge rise in debt claims and insolvency processes.
- Insolvency tools – The use of statutory demands and threat of winding-up petitions have frequently been effective tools at eliciting payment from another party but the Government has announced plans to prevent use of such tools for landlords and the Courts will no doubt be very circumspect about their use for collection of commercial debt.
- Alternative Dispute Resolution – The process of virtual mediations has evolved since the crisis began but are they as effective as the traditional format in achieving settlements?
For some time, there has been a shift from the traditional "litigation" to a more rounded "dispute resolution" lawyer. Given the current constraints, meeting the client's commercial needs is where true dispute resolution lawyers will earn their stripes. There is a real opportunity to move beyond the historic barriers to change (e.g. inertia and lack of necessity) and, to adopt an increasingly common phrase, to "build back better."
If you would like to contribute or consider our perspective, please get in touch.