Dispute resolution – overview http://lexisweb.co.uk/sub-topics/dispute-resolution Disputes about contracts are inevitable. No matter what care and effort is made in drafting a contract, the imperfect and imprecise nature of language means there will always be room for difference of opinion on interpretation so that no written contract will be a true reflection of the parties' intentions. Also, despite the protests of the parties at the start of any relationship, there will be a change in their views on the commercial background to the contract and, for sale of goods and supply of services, faultless service or perfect products are not realities. So the issue then becomes the extent to which the are parties going to address the real possibility of disputes arising out of or in connection with their contracts: are they going to consider how they will deal with disputes?
This section emphasises the contractual aspects of drafting dispute resolution clauses. As with commercial practitioners, we revert to our litigation colleagues to explain the advantages and disadvantages of any dispute resolution mechanism, so that our Practice Notes in this section are drawn from our Dispute Resolution service.
Dispute resolution clauses - initial considerations
When drafting contracts consideration ought to be given to the inclusion of a dispute resolution clause. The aim of such a clause is to assist the parties in setting out at the outset of their relationship how they will deal with the inevitable disputes that will arise between them. It is far better to have the procedures agreed when the parties are favourably disposed towards each other, rather than trying to agree them in the heat of a dispute. The point of any clause is to define what the parties intend. In the absence of any clause, the default position will be recourse to a court.
There are various reasons why the parties may wish to avoid resolving their disputes in court. These usually relate to the various costs, time scales, control and confidentiality advantages of these alternative dispute resolution (ADR) methods over standard court litigation. In addition, the courts and government are actively promoting ADR. This is evident in the Civil Procedure Rules, where courts have interpreted the overriding