In commercial disputes, skilled legal advisers can often make the difference in helping parties reach a practical and commercially sensible resolution before the matter reaches a courtroom.

Effective lawyers do more than argue the merits of a case. They help clients understand risk, identify leverage, keep sight of commercial realities, and navigate settlement discussions in a way that improves the prospects of achieving a durable and sensible resolution.

Legal proceedings remain an important part of the judicial system, and in some cases Court orders are necessary. However, for many parties the better course may be to resolve the dispute through alternative dispute resolution (ADR) processes such as direct negotiation, mediation or a judicial settlement conference.

These processes are not simply a way to avoid the cost and uncertainty of a defended hearing. Used effectively, they can create space for practical solutions, minimise disruption and delay, and enable parties to move forward sooner with greater control over the outcome.

A process the Courts expect parties to have considered

Judges in New Zealand increasingly expect parties to have properly considered whether and by what means a dispute can be resolved without the time, cost and strain of a defended hearing.  

That does not mean that an out-of-court settlement will always be possible, or that a party should sacrifice a strong legal position merely for the sake of expediency. It does mean, however, that parties who engage constructively and realistically with available dispute resolution options are often better placed to manage both legal risk, commercial pressures, and the demands of litigation.

Whatever their initial view of the likely utility of ADR, parties may now be encouraged to mediate, or to participate in a judicial settlement conference where the Court considers that focused settlement discussions may assist. ADR is therefore likely to remain an important feature of civil litigation in New Zealand for the foreseeable future.

Mediation and judicial settlement conferences: what are they?

Mediation is a confidential, "without prejudice" process in which an independent mediator assists the parties to negotiate a resolution. The mediator does not decide the dispute.  Instead, their role is to help the parties identify the real issues, test positions, and explore whether a mutually acceptable outcome can be achieved.

A judicial settlement conference is a Court-facilitated settlement process, usually conducted by a Judge, in which the parties and their lawyers meet to discuss whether the proceeding can be resolved before trial.  It resembles a mediation much more than a hearing, but the involvement of a Judge can nonetheless help parties assess the strengths, weaknesses and practical risks of continuing to litigate.

Both processes can be valuable, but they serve slightly different purposes. Mediation can offer greater flexibility and can occur at any stage in the lifecycle of the dispute, including before any proceedings have been filed. A judicial settlement conference is not available until after legal proceedings have been commenced, and typically not until after all of the pleadings have been filed. This assists the parties and the Judge in identifying the issues in the dispute more clearly.

The benefits are often broader than cost

Cost is usually one of the first reasons parties consider ADR, and understandably so. A negotiated resolution can avoid the significant legal fees, court delays and evidential preparation associated with ongoing litigation.

ADR can also help preserve confidentiality where parties would prefer to avoid airing matters publicly in a Judgment. It returns control to the parties by allowing flexibility of outcome. The parties can shape the result themselves by agreement, occasionally in a manner that a Court could not do, and often in a way which better reflects the commercial reality. In contrast, once a matter proceeds to trial, the outcome is handed to the Court.

Taking a broader view of dispute resolution

A "successful" outcome – however that is defined – is not always the one that follows a defended hearing. In many cases, it is the one that resolves the dispute in a way that protects time, reputation, relationships and future opportunities.

That requires careful judgment and legal advice from the outset. Parties need to understand not only the strength of their position, but also when a mediated or Judge-led resolution process may produce the better overall result.

Careful assessment of these options is important, with a clear-eyed understanding of what is really at stake. At Anthony Harper, we help clients assess whether a matter is best advanced through direct negotiation, mediation, a judicial settlement conference or Court proceedings, with the key being to choose the process and timing that best supports the outcome required in the circumstances.

If you are navigating a civil dispute, our team of experts can assist you to assess not only the merits of your claim, but also the process most likely to resolve it effectively and efficiently.