Section 4 – Evolving dispute resolution

There are, unsurprisingly, differences across sectors in the relative popularity of arbitration and litigation, with arbitration generally considered more favourably across all our focus sectors other than Media. Respondents in the Energy sector view neither process favourably, with early neutral evaluation being by far their preferred process (45% ranking it in their top two).

Overall, non-adversarial dispute resolution processes had less appeal in 2024 than 2022, with 23% of all respondents ranking expert determination as one of their top two processes (down from 28%) and 23% favouring adjudication (26%). Respondents’ preference for early neutral evaluation has remained effectively steady, with a quarter ranking it in their top two approaches (but as noted above the Energy sector being particularly well disposed).

These non-adversarial processes allow parties to appoint an independent expert to resolve a dispute, which can have many benefits, especially in circumstances where a detailed understanding of the technology will assist in the determination of the issues. However, experts may have the technical expertise, but parties may see the appeal of a more robust dispute resolution process, which brings certainty, but still allows opportunity to engage an expert to provide opinion evidence of technical matters.

Negotiation remains the favoured approach

Of course, most parties will wish to avoid the costs of litigation or arbitration, which can be expensive processes, particularly in common law jurisdictions. This is one of the reasons why processes such as expert determination and early neutral evaluation will continue to have appeal.

Most disputes which go through an adversarial process settle before trial or arbitration hearing. Many settle before proceedings are issued. Unsurprisingly, therefore, negotiation in its various forms remains a popular approach, with 25% ranking mediation in the top two in both years of the survey, 20% ranking negotiation without a mediator (up from 19%) and 23% preferring to follow dispute escalation procedures (down from 25%), which generally involve negotiation before proceedings can be commenced.

How disputes are actually resolved

In terms of the dispute resolution processes actually used to resolve disputes over the last three years (as opposed to respondents’ preferred processes), there is experience of all processes across all sectors surveyed, although there are wide variations between the sectors. The majority of respondents have experience of mediation (59%) and arbitration (56%), but other processes are less widely used – (expert determination (31%) and early neutral evaluation (28%)), although it is notable that even in relation to those lesser-used processes, over a quarter of respondents have some experience of them. In many cases the process to be followed is determined in the contract, and whilst the parties have the freedom to agree a different process, in practice they rarely depart from the contractual procedure.