will government departments be seen as a "soft touch" - what
does the Dispute Resolution Commitment actually mean?
In June 2011 the Ministry of Justice issued a
new "Dispute Resolution Commitment" for government departments and
agencies. This builds on the previous Alternative Dispute
Resolution Pledge from 2001.
This article considers the commitment and what
it will actually mean in practice.
the commitment
All government departments and agencies are
required to follow the commitment to:
- be proactive in the management of disputes
- include dispute resolution mechanisms in their contracts
- use appropriate dispute resolution processes to avoid
litigation where possible
- use prompt, cost effective and efficient processes for
resolving disputes, and
- educate their employees in appropriate dispute resolution
techniques.
One of the aims of the commitment is to provide a 'best practice'
example to businesses on how disputes should be approached and to
therefore increase the use of flexible, creative and constructive
approaches to dispute resolution generally and not just in relation
to government departments. This is indeed a laudable aim and one
that all mediators would support but will this happen in
practice?
"a soft touch"
One of the potential downsides of mediation is
the perception that if you offer it or engage in then you will be
seen as a "soft touch". It is possible that this commitment could
encourage more speculative claims in the knowledge that the
government department or agency is likely to come to a settlement
in order to avoid litigation.
However officials and employees of government
departments and agencies should resist attempts to interpret the
commitment in this way. The commitment reinforces the message that
speculative and unsubstantiated claims should not be settled just
to avoid litigation where the claim is not seen as valid. It states
that: "notwithstanding the emphasis on the desire to avoid
disputes, officers should not act in a way which compromises
departments' rights".
A careful balance needs to be reached between
being willing to negotiate and achieve a sensible settlement in the
interests of both parties while maintaining a strong position in
respect of spurious claims.
a wider impact?
The commitment will affect not only government
departments and agencies but also those who contract with them
whether as part of large public procurement projects or small
supplier agreements.
Although dispute resolution clauses are pretty
common place now in major contracts they are, in some situations,
ignored or seen as a 'tick box' to get to litigation. The emphasis
in the commitment on these sorts of provisions and how they should
be implemented and approached may work to encourage greater
attention to be paid to the dispute resolution process prior to the
involvement of the courts.
Whether this will flow down through the supply
chain or will be restricted to those companies directly contracting
with government bodies remains to be seen.
further comments
The courts are increasingly prepared to
penalise parties in costs where they have failed to make
appropriate attempts to settle cases.
Although, in most cases, there has been a move
away from the "posturing and jockeying for position" that
led Lord Justice Ward to declare "a plague on both your
houses" and order both parties to pay their own costs it
is apparent that those involved in the litigation process still
fail to properly consider settlement options and alternative
dispute resolution. Recently, for example, the London Borough of
Southwark was ordered to pay costs on an indemnity basis (ie higher
than usual) because it had failed to accept a without prejudice
offer that the court considered it should have done.
The Dispute Resolution Commitment will not
resolve these types of issues overnight but it does give a clear
indication of the approach that the government wishes parties in
disputes to take. Whether they will or not and how it will be
interpreted will depend on the way in which each department and
agency applies the commitment.
