early resolution neutral


In my quest to provide meaningfully and cost-saving advice to my clients, I have come across what can probably be best described as a pre-mediation/pre-litigation/pre-arbitration process which might just make those cost savings for clients entrenched in complex or multi-party disputes and help avoid recourse to adjudicative tribunals. Welcome the advent of the Early Resolution Neutral (ERN).

I employ the word “might” rather tentatively here: do we really need another Alternative Dispute Resolution (ADR) process as it would have to bring something new and exciting to the table to propel it to the height of the success of those current processes on offer.

The ethos behind the ERN I believe is to enable parties to resolve their disputes at the earliest possible stage. Initially, I thought this was mediation in a different guise. However, it is something quite different. Whilst mediation has a high success rate, mediation can often take place very late in the day by which point considerable costs and delays have already been incurred. However, in reality, as we litigate in an adversarial and front-loaded system, disputes tend to harbour mutual mistrust and it can be difficult to adopt a collaborative approach whilst each party focuses on getting its case substantively in order. I am also conscious that mediation undertaken too early in a dispute where there has been an insufficient disclosure of relevant evidence and an opportunity for the parties to truly evaluate their own position, can potentially be a waste of time and money and lead to failure.

This is where I see the ERN as being helpful. The ERN is an individual who will work with the parties’ legal representatives to move matters forward on a confidential basis and in the best interest of all parties. The ERN does not disclose what he has learnt from any party about their express authorisation and as with mediation creates a safe setting in which the ERN can explore any overlapping interests to enable the parties to collaborate to resolve the dispute.

The ERN will firstly explore each party’s case and help them to identify what further information or documentation needs to be requisitioned to enable constructive discussions to occur. This should be different from a disclosure exercise on the basis that commercial clients are probably more content to hold serious discussions with far less documentation than their legal representatives or the Court rules require. Once that stage has taken place the ERN can effectively draft a list of mutually agreed items or even create a form of brainstorming map to enable the parties to identify their options for resolving or contesting any remaining issues.

This two-stage process would then in my view put the parties in a better position for a successful mediation or necessary litigation or arbitration.

Clearly the ERN will not be an appropriate consideration in every dispute but could be particularly useful where the parties are entrenched in their own positions and are either embarking or have embarked on an adjudicative process.

I see it as being particularly useful in multi-party or chain contract scenarios such as a chain of building contracts where there may be different dispute resolution clauses, different jurisdictional clauses and vastly different interests.

It, of course, does not take into account the fact that there is an additional cost obligation to each party and that it relies on the co-operation of all parties, problems which are shared by mediation.

Therefore my thought for today is whether the ERN is no more than an extension of the accredited mediator, akin to a commercial collaborator if you like, or could he make a real difference to the ADR framework and “earn” (couldn’t resist!) his place alongside existing coveted processes?

If you require any further information or assistance with this or any aspect of construction law, please contact Karen Elder at Beswicks Legal on 01782 205000 or karen.elder@beswicks.com