On 3 November we held our inaugural Disputes Conference on "Speed in disputes: when is faster better?", with speakers from a range of industry-leading companies including Centrica plc, Hewlett Packard Enterprise, SSE, IBM, BT, RBS, Nokia and BAT as well as the ICC and CEDR.
Delivering his keynote, Grant Dawson of Centrica praised the quality and robustness of the English judiciary, but expressed concern that our reputation could be undermined by our track record on speed, cost and efficiency. In general, our panellists found that disclosure remains the biggest area of concern in this regard. The costs of disclosure are substantial, but they can be controlled with careful planning. Applying the right tools for the right job is key. Our speakers discussed no-disclosure clauses, documents-only proceedings, the IBA Rules of Evidence, and technological solutions – none of which is a panacea, but they all have their place. Grant Dawson shared that the judiciary is now working with an invited group of law firm partners, QCs and GC100 in-house counsel on how disclosure can be better managed in the light of the ever-increasing volume of electronic data (which will only accelerate with the growing Internet of Things).
Another theme that emerged was that measures to cut the time and costs required to resolve disputes can actually risk having the opposite effect. Our panellists had a wide range of experiences and perspectives. In a discussion titled “Emergency proceedings – short cut, or diversion?”, speakers also commented that because of the requirement for the party seeking such proceedings to give an uncapped undertaking on costs, emergency court proceedings can encourage front-loading of costs and effort by their opponent. Appeals against decisions on interim applications could also cause delays, with 12-15 months for an appeal against a jurisdiction challenge and two years for a preliminary issue not uncommon. However, several delegates also reported that emergency proceedings often lead to senior managers becoming involved with the dispute at an earlier stage, which could lead to a speedier settlement, especially when combined with the early judicial evaluation that emergency proceedings provide. Several of our speakers also felt that because of the reduced potential for appeals, arbitration could offer faster emergency procedures than the courts.
Continuing the theme of unintended consequences, Robert Parnell of SettlementAnalytics shared insights from legal-economic research on what factors promote or discourage early settlement. Measures intended to encourage early settlement that have actually been found to backfire in practice include higher prejudgment interest and, surprisingly, increased use of ADR. Our panellists discussed the best time to embark on ADR, the merits of escalation clauses, incentives and disincentives to settlement, data-driven decision-making, and whether a move towards mandatory ADR would help or hinder settlement and cost-effectiveness.
Illustrating that lawyers and clients might do well to account for a wider range of factors than the traditional settlement zone analysis permits, Robert Parnell used a game theory model of dispute to show how relative cost of capital differences between the parties can be a major factor in the likelihood and timing of settlement. Other important influences include the cost structure of the dispute, the size of the claim, the degree of informational asymmetry between the parties, the imposition of a court imposed schedule, and the establishment of a trial date.
Read more
Read our special Conference edition of Disputes Digest for analysis of further proposed court reforms, a discussion of speed in arbitral proceedings and ADR, the rise of predictive coding, and more from Robert Parnell on the lessons game theory has for disputes.
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