The Litigation Series – Week 15: Alternative Dispute Resolution And Settlement

In week 15 of the Litigation Series, we are looking at settling medical negligence claims and the many ways in which this can be done, known as “alternative dispute resolution”.

A settlement is the result of an agreement between the parties to the dispute to compromise and/or end the litigation. It arises from an offer by one party that is accepted by the other or others.

A case can be settled at any time. There is no fixed rule or time. The determining factors of when to settle a claim are the frequently wishes of the parties and their view on the strengths or weaknesses of the case, which may mean a party does not want to continue as far as a Trial, and the potential costs consequences of proceeding.

There are many reasons to think about settling a case before it goes to Trial, including:

1. Settlement can help maintain relationships (for example if there is a dispute between family members).
2. Litigation is very expensive. The earlier the agreed settlement, the lower the costs to be paid by the losing party.
3. Litigation can be a stressful, time consuming and emotional process. Many clinical negligence cases continue for 18 months to 3 years or more. There can be some benefit to the parties in agreeing to bring the matter to a close.
4. There may be tactical reasons why a party may want to bring the case to an end. For example, there may be evidence which will need to be shared with the defendant which will adversely affect a party’s reputation, or there may be a risk of the court making an adverse costs order which a party cannot afford to pay.
5. While the Courts cannot force parties to a matter to settle their dispute, there is now greater emphasis from the Courts encouraging the parties to engage in alternative dispute resolution (ADR) for reasons of proportionality. This includes allotting to parties a fair share of court resources. Failure to engage appropriately in ADR, such as an unreasonable refusal to mediate can result in costs sanctions, even for the successful party.

Types of Settlement

I mentioned alternative dispute resolution (‘ADR’) above. The Courts encourage the parties to engage in this and there are different methods. The terms includes all confidential dispute resolution mechanisms, outside of a court of law, through which the parties use an impartial individual to help them settle their dispute.

The methods we use most often in trying to resolve our clinical negligence claims are as follows:

Mediation

This is growing in popularity. It involves an independent third party (the mediator) assisting both sides come to an agreement to resolve their dispute.

In summary:

• it is usually confined to a set period of time, perhaps a few hours to a day, depending on the complexity of the issues in dispute

• it starts with each party presenting a summary of their case to the mediator and in the presence of the other party

• the parties then retire to separate rooms and the mediator travels between them, seeking to identify issues where agreement may be reached and so gently pushing the parties in that direction

• where appropriate the mediator may call the parties back before him jointly

• the mediator cannot impose a settlement on the parties but settlements may be arrived at by the end of the process

While there is a degree of formality to the structure of the process, particularly with the preparatory work, the day is intended to be flexible and informal. There is no set protocol to follow. A skilled mediator can go a long way towards the parties reaching either a binding settlement or, at the least, narrowing the scope of the disputed matters.

Round Table Meeting

These are more common in clinical negligence claims at present. They are effectively a mediation without the mediator.

They often follow the same format as a mediation described above, in that at the start of the meeting, the parties gather in the same room and set out the purpose and objectives of the day, and their starting position. They then separate in to individual rooms so that confidential discussions can take place about the strengths and weaknesses of their case, and what they feel a reasonable settlement would be.

In these meetings, the negotiations are held between legal representatives for each party, who will go back and forth between the separate rooms, to try to narrow the issues, and help agree a settlement.

Written negotiations

Often in clinical negligence claims, negotiations will take place by letter and by making offers to settle in writing.

We often use Part 36 Offers in clinical negligence claims. These are called ‘Part 36’ offers, because they are governed by rules and guidance set out in Part 36 of the Civil Procedure Rules. Briefly, the purpose of Part 36 encourages the parties to a dispute to make realistic offers of settlement, as it provides financial incentives to parties for so doing, and conversely, there are financial risks for parties who turn down reasonable offers.

A party to a dispute can make a Part 36 offer at any time. A claimant might make a Part 36 offer because if a Defendant accepts it, the dispute will come to an end, and the defendant will pay their costs. If the Defendant does not accept the offer and, at trial, the claimant obtains a judgment ‘at least as advantageous’ as the proposals in its Part 36 offer, then there are serious damages, costs and interest implications for the defendant

A defendant might make a Part 36 offer because if the Claimant accepts it, the dispute ends and the Defendant pays the legal costs of the claimant up to that point. It is a way of managing risk. If the Claimant does not accept the offer but then obtains a judgment which is no more advantageous to it than the defendant’s Part 36 offer, the defendant is entitled to its costs and interest from the date on which the offer could have been accepted.

Therefore Part 36 makes this a level playing field – there are risks and benefits to be considered by both parties when trying to agree settlement under these terms.

There are many ways to consider settling a claim, and lots of factors to consider when deciding on the correct approach. We will always guide our clients clearly through their options, to hopefully reach a good resolution.

Read the next blog in the series that looks at what happens when you a settle a medical negligence claim.  

If you have suffered an injury due to medical negligence you may be entitled to compensation. For a free initial consultation with one of our Medical Negligence experts please call 0330 822 3451 or request a call back online.