Pros

Parties are compelled to comply with judgments

Due to the nature of the judicial system, judgments obtained through litigation compel parties to
comply or they run the risk of being given certain penalties. These penalties can include the
seizure and sale of property, garnishment of the monies owed, or even possible jail time. As
such, the losing party in litigation is likely to comply with the judgment that is pronounced
against it.

Right to appeal

Canada’s judicial system allows either party to a lawsuit to ask an appellate court for a review of
the trial court’s decision should one of the parties disagree with it. This allows the opportunity
for a previous decision to be overturned or for a new trial to be ordered and can be beneficial if
you are unsatisfied with the trial court’s decision.

Precedent setting

The principle of stare decisis in Canadian common law requires judges to follow the previous
rulings of higher courts in their province and the Supreme Court of Canada on the same issue. As
a result, cases brought to and decided in court are precedent setting, which can be helpful in
discouraging similar suits from being launched against you in the future should the initial one
fail.

Discovery

Starting the litigation process will allow you to obtain information from the other side in the
form of documents and verbal responses through processes called document discovery and
examinations for discovery. These processes allow you to identify the strengths and weaknesses
of both your own case as well as the opposing party’s case, and give you access to information
that may not have been available through other forms of dispute resolution.

Potential for a predictable outcome

Taking a case to trial may yield a predictable outcome if there have been similar precedent-
setting cases decided or if there is clear legislation that dictates the outcome. This can be
beneficial if your case against a defendant is a strong one as it may give you more confidence in
a positive outcome.

Cons

Longer time frame

Sometimes, depending on the complexity of the issues, cases can take up to several years to be
decided by court. This means that both parties to a lawsuit may have to wait a significant amount
of time until a judgment is pronounced, and the matter is concluded. Taking a case to trial is not
ideal if the matter needs to be resolved quickly because the litigation process is inherently slower
than other dispute resolution methods.

Judgment subject to appeal

Although the right to appeal was mentioned as a pro of litigation, it can also be a con. There is
always the possibility that the decision in a case may be overturned by an appellate court, thus
forcing the process to be redone all over again. This becomes a con when you receive a desirable
outcome at trial, as this prolongs a final decision and also becomes more costly.

Costly

The litigation process can undoubtedly become quite costly with legal fees and other costs
associated with going to trial. The costs of litigation will rise in accordance with the length of the
pre-trial period as well as the length of the trial, meaning that the longer it takes to resolve the
matter the higher the litigation costs.

Damaging relationship         

One of the downsides of taking a case to trial is that it is almost always damaging to the
relationship between the two parties. It can be difficult to overcome the animosity that can occur
during the trial process and as a result, it can be very challenging for both parties to preserve any
sort of relationship, be it professional or personal, once a judgment has been handed down.

Public forum

A risk of taking a case to trial is the possibility that it will attract public attention as most court
documents are available publicly. It may not be in your or your company’s best interest to take a
case to court if you are uncomfortable with the matter being publicly accessible.In the next
installment, we will discuss the pros and cons of dispute resolution mechanisms other than
litigation. This knowledge will aid you in deciding which process is best for the resolution of
your dispute by taking all of the relevant factors into account, including the cost.

Litigation can be defined as a contest between and among persons, organization, and the State,
which is authorized by law, in the court of justice, for the purpose of enforcing legal rights. In
litigation process, a case which called suit or lawsuit is brought before a court of law. The parties
who involved in the litigation are called the litigants which included plaintiff, defendant,
applicant, petitioner or respondent as long as the trial is ongoing.

Litigation certainly has disadvantages. First of all, litigation is time consuming. Litigation
process is a very complicated process. It needs to go through many steps and stages before the
trial start. It takes long time to complete the pre-trial stages. According to the report written by
Arthur (2008), Edition of the New York Times in 23 March 1983, an experienced lawyer was
explaining to young potential lawyers what they can expect in litigation practice. He said, “You
spend years and years in pre-trial motion practice. I smother the other side with papers and they
smother me with papers until we wear each other out and the judge knocks my head against his
head and we settle. It takes around three or four years.”

Litigation is very costly and financially. Every citizen has the right to seek satisfaction for his or
her grievances in the courts. The problem is paying the bills. A trial of a complex business case
normally takes months; some have gone far for more than a year. Examples of the fees and
expenses required to pay are lawyers’ fees, expert witnesses’ fees and others associated fees.
Notably, the pre-action stage of proceedings can often be a very time-consuming and an
enormously costly exercise. In addition, the uncertainty of the period of time that a trial might
use will raise the expenses and fees time to time.

Other disadvantage of litigation is it is more benefit to wealthier party. Litigation is not a process
of solving problems, but a process of winning arguments. Wealthier party is enable and
affordable to hire an experienced and good lawyer to engage in the lawsuit. Judge and jury can
be easily convinced by a good lawyer whom has strong convincing skill.
Besides that, litigation is unsuited to disputes involving technical issues. The fact that neither the
judge or the jury may not have enough knowledge nor experience with the subject matter of the
dispute between the parties. The expertise might relate to physicians, accountants, engineers,
economists and others professions. Lack knowledge of jury and judge might cause resulting in
wrong decisions and consequential appeals to higher forums.

Litigation is adversarial, which means less regard to fair solution. Court decisions might not
acceptable to either party, result in disturbance of commercial relationship. Adjudication of court
results in win-lose scenario and not a mutually acceptable decision. Hence, a party who is
dissatisfied with the result may seek an appeal following trial.

Alternative dispute resolution, commonly referred to as ADR, is the collective term for the
option that parties can resolve civil disputes, with the help of an independent third party and
without the need for a formal court hearing. The independent third party will become the
mediator between the complainant and the respondent, that is, the party against whom the
complaint is being made.

ADR is a fast growing area within the justice system. In 1970s, ADR was reinvented in the US.
More and more people became increasingly concerned that the traditional method of resolving
legal disputes in the United States in the late 1980s and early 1990s. (The free dictionary, 2011)
Since 1990, ADR became the fashionable development in England and Wales. Many Judiciary
and legal profession took a very active interest in ADR. It is because the parties and lawyers and
courts realized that ADR could always help them resolve legal disputes in a quickly and cheaply
way than conventional litigation which is too expensive, too slow, and too cumbersome for many
civil lawsuits.

By 1996, a significant push came from Lord Woolf’s 1986 report ‘Access to Justice’, that
identified the need for fair, speedy and proportionate resolution of disputes. This has been
increased the importance of using ADR in the UK, as it has been judged that it has the capacity
to increase the level of access to the justice system amongst the general public.

Those principles lay at the heart of the Civil Procedure Rules, which came into force in April
1999. The Civil Procedure Rules included references to ADR in rules of court and introduced
pre-action protocols, with their emphasis on settlement, even before court proceedings are
issued. Civil Procedure Rule 1.4(2) (e) now requires the court, as part of its responsibility to
actively manage cases and encourage the parties using an ADR procedure if the court considers
it appropriate and to facilitate the use of such procedure. (Delia, 2011)

There are many types of ADR. In general, there are conciliation, mediation, and arbitration. It
included other types of ADR such as adjudication, ombudsman, early neutral evaluation, expert
determination, Med-arb and Med-rec schemes.

Conciliation is a good first step in the ADR process. Conciliation involves an impartial third
party, known as conciliator, who helps the people in dispute to resolve their problem. Conciliator
will generally be a member of the trade association of which the company in question is a
member. Conciliation is not legally binding upon the complainant. Therefore, the complainants
are free to reject the decision and take further action to enforce their rights after the outcome of
the conciliation process. Conciliation often used in disputes about access for disabled people to
goods and services.  It aims to secure a resolution in response to a particular incident of alleged
discrimination which is satisfactory to the complainant.

The term conciliation is often used interchangeably with mediation. But, conciliator takes a more
interventionist role than mediator in bringing the two parties together and suggesting possible
solutions. Basically takes mediation a step further and gives the mediator power to suggest
grounds for compromise and a possible basis for a conclusive agreement. Conciliation is an
assertive, rights-focussed process that fundamentally aims to enable the complainant to exercise
his or her rights in law.

Furthermore, conciliation is generally free to the consumer. As a result, this tends to be a good
place to start.

Another potential alternative is mediation. Mediation, also known as conciliation, is the fastest

growing ADR method in UK and Europe. It offers solutions beyond those that a court could
ordinarily impose. Mediation provides a forum in which parties can resolve their own disputes
and strike their own bargain, with the help of a neutral third party, mediator or facilitator.
Mediator’s job is to keep the parties talking and help them to move through the difficult points of
contention instead of impose a decision upon the parties. The advantage of mediation is that the
dispute is over when the parties reach agreement. They face no appeals, delays, continuing
expenses, or unknown risks. Unlike litigation, which focuses on the past, mediation looks to the
future. The parties can move forward again. Thus, a mediated agreement is particularly valuable
to parties who have an ongoing relationship, such as a commercial, employment or neighbour
relationship.

In arbitration, an impartial third party will hear both the respondent and the complainant in a
dispute and makes a decision to resolve it. The outcome of arbitration is final and legally binding
on both sides. Therefore, it is impossible to go to court if they are disagreeing with the decision.
However, there is an exception for legal binding. If there are serious flaws in the arbitrator’s
decision, or they have acted contrary to the rules in the Arbitration Act 1996, an appeal may be
made to the High Court.

Arbitration is quite similar as litigation with it an essentially adversarial process and the fact that
the ultimate decision made by third party is binding. However, arbitration is a step away from
formal litigation. Arbitration is private rather than public. Hearings are less formal than court
hearings, and some forms of arbitration do not involve hearings but are decided based on the
help of documents only.

Examples of arbitration bodies are Advisory, Conciliation and Arbitration Service (Acas)
provides free of charge arbitration for employment disputes and The Chartered Institute of
Arbitrators (CIArb) provides arbitration for consumer and large-scale business disputes. Besides,
there is also online arbitration in most cases requires a fee based on the claim value.

Ombudsmen exist in a number of fields, generally in relation to public such as the Local
Government Ombudsmen or quasi-public bodies such as the Banking Ombudsman or the legal
Services Ombudsmen. Function of ombudsmen is to investigate complaints in the relevant
sector, for instance, maladministration by any government department. They may have powers to
award compensation or only make recommendations to the body against whom the complaint is
make out. The majority of recognised ombudsman schemes are set up by statute; others are
voluntary non-statutory schemes set up on the initiative of the service sectors concerned. For
example, services provided by insurance companies, banks and building societies are all covered
by the Financial Ombudsman Service (FOS).
Adjudication involved an independent third party, adjudicator who is usually an expert in subject
matter in dispute. Adjudicators are not bound by the rules of litigation or arbitration. Their
decisions are often interim ones. It means that they can be finalised using arbitration or another
process. Adjudication decisions are usually binding on both parties by prior agreement.

In relation to construction contracts, adjudication is a statutory procedure by which any party to

the contract has a right to have a dispute decided by an adjudicator. It is intended to be quicker
and more cost effective than litigation or arbitration. The right arises by virtue of the Housing
Grants Construction and Regeneration Act 1996.

Early Neutral Evaluation (ENE) differs from arbitration in that the opinion non-binding and has
greater informality. Unless the Parties agree, otherwise it is not subject to “due process”, hence,
it is more flexible. In particular there is no need for a trial-type hearing. Unless the Parties agree
that it should be, the Evaluator may conduct investigations independently of the Parties, and
make the recommendation based on those investigations without reference to the Parties. Parties
should obtain legal advice when embarking on an ENE, but do not strictly need to be legally
represented during the procedure.

In expert determination, third party will consider the claims made by each side and issue a
binding decision. The third party is usually an expert in the subject of the dispute and is chosen
by the parties. Like adjudication, the parties should agree at the outset to be bound by the
expert’s decision. It is most suitable for determining technical aspects of a complex dispute. A
straightforward example of this method of ADR is sometimes used in boundary disputes. The
parties agree to be bound by the decision of an independent expert, in the example, a surveyor
who comes to a conclusion as to the correct sitting of the boundary.

Other types of ADR are Med-arb. As the name suggest, this is a combination of mediation and
arbitration. The parties begin by mediating. If they fail to resolve the dispute by mediation, they
have agreed in advance to submit the dispute to binding arbitration. In some cases the same
person acts as mediator and arbitrator; in others a different neutral is brought in to arbitrate.

Med-rec is one of the forms of mediation in which the mediator gives the parties a
recommendation for resolving the dispute. Mediation is conducted in the usual way, with the
mediator encouraging the parties to reach their own agreed resolution. If they do not, they can
ask the mediator to recommend a resolution. This recommendation can be accepted or not. If
accepted by both parties it can become a binding settlement.

Conclusion

In my opinion, I am agree that Alternative Dispute Resolution (ADR) is a better alternative in a

wide range of civil conflicts, such as commercial disputes, professional liability cases, personal
injury matters, insurance problems and family disputes. It should be note that ADR is not a
suitable solution for criminal disputes; these will almost always require a full court hearing.

In the aspect of civil conflicts, there are some common agreed benefits of ADR as compared to
litigation that makes me believe that ADR is better option to litigation. First of all, Courts may
have the risk to make a bad situation worse. Using ADR system, it can let both parties talk to
each other. This let both sides increase their understanding to each other’s position. It helps each
other to find a solution that both can live with. It can help preserve an ongoing relationship. This
might be useful if the parties have a dispute with neighbour, ex-partner, child’s school, or
landlord.

Secondly, there is a much wider range of outcomes with ADR than with courts. If the main aim
of a party is an apology, an explanation, or a change in policy or practice by an organisation,
mediation or an ombudsman investigation may well be more appropriate than court.

Next, procedures of ADR are more flexible than the court process. Most of the ADR procedures
are without a formal hearing. For example, ombudsmen will investigate party’s complaint
through letters and documents, mediators will usually bring both parties together for a face to
face discussion and ACAS will try to negotiate a deal through a series of phone calls.

Besides that, ADR techniques can produce a win-win solution, however, litigation provides a
win-lose situation. Mediators try to generate creative discussions about a range of options. They
will try to end up with an agreement which reflects the best possible outcome for all involved,
rather than just aiming for an acceptable compromise. Research on family mediation indicates
that agreements reached through mediation are more likely to work out in practice, and to last
longer, than those imposed by a court. Virtually all of the mediated agreements made in small
claims cases are complied with, hardly need any enforcement action by bailiffs.
Furthermore, one of the ADR methods, ombudsmen has the power to investigate problems in
depth. Like courts, it requires information to be provided by the organisation complained about.
Unlike courts, they are free of charge to the user. Poorly performing local authorities and
government departments can be named and shamed by the public services ombudsmen.
Especially if the problem that faced by the parties are a symptom of much wider problems with a
particular council or public body, then the ombudsman can investigate one complaint, and
suggest wide-ranging changes in practice to make things better for everyone.

Last but not least, some ADR options provide a remedy where there are few other practical,
affordable options; this could include issues such as neighbour disputes about noise or low-level
anti-social behaviour, or complaints to the Financial Ombudsman Service about financial service
providers.

It is not obligatory to seek legal advice by using alternative dispute resolution, but it is advisable.
Litigation is to be viewed as a last resort with court having continuing obligation to encourage
and facilitate settlement.

QUESTION 2

A contract is an agreement which legally binds the parties. A legal agreement is enforceable in
court. The underlying theory is that a contract is the outcome of ‘consenting minds’ which means
that each party being free to accept or reject the terms of the other.

An agreement by itself is not enforceable in court. There are six essential elements of contract
are present before such an agreement may be enforceable in court. This included offer,
acceptance, consideration, intention to create legal relations, capacity to contract and genuine
consent of parties.

Offer and acceptance are the two main separate elements of contract. The origin of a contract
will begin with the offer. The person who makes the offer is known as the offeror and the person
who receives the offer is known as offeree. An offer can be defined as willingness to contract
made with the intention that it shall become binding upon the offeror when it is accepted by the
offeree. Contract will be formed with the unconditional acceptance of the offer. There must be a
willingness from the offeree to enter into the contract with an offer.
An acceptance is a final and unqualified agreement to the terms of the offer. Once the existence
of an offer has been proved, the court must be satisfied that the offeree has accepted. Otherwise,
there is no contract.

There are three basic rules or elements of acceptance must be obeyed. Irst of all, an acceptance
must be communicated while an offer is still in force. Acceptance is not effective until
communicated to and received by the offeror. Communication can be either by words, writing or
conduct. Silence cannot be a method of communication of acceptance. Refer to the decided case
Felthouse v Bindley (1862), after previous negotiations had produced an agreed price, F (the
uncle) wrote to J (the nephew) saying that, “If I hear no more about him, I consider the horse is
mine at £30.75p.” The nephew made no reply. When the horse mistakenly sold by an auctioneer,
the uncle sued the auctioneer. The courts held that his action should fail as J had not
communicated his intention to sell the horse to the uncle. There was no acceptance and no
contract made between them. Silence shall constitute acceptance cannot be imposed by the
offeror without the offeree’s consent.

Next element is acceptance must be unqualified and must be exactly the same as the terms of the
offer. If acceptance is qualified, it either becomes a counter-offer or it is an acceptance subject to
contract. In either case, there is no acceptance.

The last element is acceptance must be communicated by the offeree or by someone with his
authority. An acceptance is not effective until the offeree communicates his agreement to the
offerror.

In Powell v Lee (1908), P applied for the post of headmaster of a school. He was called for
interview and the managers (D being one) passed a resolution appointing him, but they did not
make any arrangement for notifying him. However, one of the managers, without authority,
informed P that he had been appointed. The managers subsequently re-opened the matter and
appointed another candidate. The court was held that P failed in his action for breach of contract
since acceptance had not been properly communicated to him.

However, there are some exceptions to the rule of communication of acceptance.

The rule of communication of acceptance will be excepted where the offeror has waived the
necessity of communicating acceptance, the offeree may accept by remaining silent. In Felthouse
v Bindley (1862), the uncle, by his letter, had waived any right to receive a communication of
acceptance. If the nephew had wished to enforce this contract therefore he would have been able
to do so. Therefore, where offeror waives communication of acceptance, the offeree can enforce
this contract if acceptance was through silence.

Exception of the communication of acceptance occurs when a unilateral offer has been made; the
offeree need not communicate his acceptance to the offeror. Acceptance takes place on
performance of the terms of the offer. In Carlill v Carbollic Smoke Ball Co. Ltd (1893), the
defendant company manufactured a patent medicine, called a ‘smokeball’. In various
advertisements they offered to pay £100 to any person who caught influenza after having sniffed
the smokeball three times a day for two weeks. They also stated that they had deposited £1,000
at The Alliance Bank in Regent Street to show their ‘sincerity’. Mrs C used the smokeball as
advertised, and contracted influenza after more than two weeks treatment, and while still using
the smokeball. She claimed her £100. The company refused to pay it and claimed that an
advertisement could not be constructed as an offer. The courts held that this advertisement was
an offer made to the world and the contract is limited to that portion of the public who performed
the conditions required under the offer.

One of the exceptions is postal rule. Postal rule can only be used if using the post is a proper and
reasonable method of communication between the parties, the letter is properly stamped,
properly addressed and placed in postbox, then acceptance is deemed to be complete
immediately when the letter of acceptance is posted. If the above conditions are satisfied, then
the acceptance takes place when the letter is posted even if the letter is lost, delayed or damaged.

In Adams v Lindsell (1818), L made an offer by letter to A requiring an answer through post
within a certain time period. The letter of offer was misdirected and delayed in the post. A posted
a letter of acceptance immediately. At the time of posting, A was still within the time period of
answer required by L, but by the time the letter arrived, the time period specified for the
acceptance had run out. L had thought that the absence of reply within the expected period for
acceptance indicated that A did not want to accept the offer. L had sold the goods to another
buyer. The courts held that acceptance took place at the time the acceptance was posted and A is
successful in suing L for breach of contract.
This fact is supported by another decided case, Household Fire Insurance Co v Grant (1879). D
(Grant) applied for shares in the company. A letter of allotment (the acceptance) was posted to
him, but it never arrived. The company later went into liquidation and D was called upon to pay
the amount outstanding on his shares. It was held that he had to do so. There was a contract
between the company and himself which was completed when the letter of allotment was posted,
regardless of the fact that it was in the post.

However, an offeror may protect himself from the postal rule by insisting that there be
communication of acceptance. In Holwell Securities v Hughes (1974), H granted a co, the option
to purchase land. He asked the co for “notice in writing”. The letter sent by the co was lost in the
post. It was held that the words “notice in writing” meant that the notice of acceptance must
actually be received by the offeror before acceptance is valid. There was therefore no acceptance
in this case and no contract.

ADVANTAGES

Nobody likes to engage in a dispute with another person or organization, but in reality it is
sometimes unavoidable.

Where a dispute is inevitable, the question becomes which course of action you use to resolve it.
Traditionally, litigation has been the preferred method, but with growing demands on courts’
time, other options have grown in popularity.

Alternative Dispute Resolution (ADR) and arbitration are being used more and more to resolve
issues, so where does that leave litigation?

In this article, we’re going to explore some of the key advantages of litigation and why it’s still a
powerful tool in dispute resolution.

1. Public Record

One of the main advantages of litigation is it is conducted through the courts and therefore
becomes part of the public record. For this reason, the final judgment provides a clear line in the
sand.

Of course, you may be wondering why this is an advantage?. Surely having any kind of dispute
visible to the public risks damaging your personal or your business’s reputation?
Well, this is one argument, but while other methods of dispute resolution like arbitration may
offer privacy, the reality is that there is no guarantee against information entering the public
domain in the form of, for example, a leak.

In these instances, it is much harder to prove one’s vindication publicly and a business may be
haunted by a public perception of “no smoke without fire”.

What litigation offers is a clear platform with a clear outcome. This is especially useful in
relation to social media, where accusations can quickly gain publicity without the opportunity for
reproach.

When this happens a public “setting straight of the record” can be invaluable in limiting and even
repairing reputational damage.

2. Cooperation

Frustratingly there is no getting around the fact that dispute resolution is a two-way process. This
is especially problematic when another party is uncooperative.

Litigation helps solve this problem, with court-mandated deadlines and requirements being far
more difficult to ignore. In some cases, the powers of the court may even allow a dispute to be
disposed of summarily.

Furthermore, if you have a multi-party dispute, the court may allow the joinder of third parties to
proceedings. That is often difficult in arbitration and may result in separate proceedings.

3. Precedent Value

When litigation goes through the courts, it provides lasting benefit in the form of precedent. That
means parties can point to previous rulings in similar cases and use that precedent to bolster their
own argument.

This is an ever-present advantage of litigation as it allows speedier dispute resolution where

similar claims are made. This is useful if you find that the same spurious claims are made against
you or your business and don’t want to have to keep starting your argument from scratch.

In contrast, one thing that is often said about commercial arbitration, for example, is that there is
no precedent set. In a sense, this is not entirely true, as despite arbitration proceedings being
private, publications, appeals in the court and other legal press allow some information about
arbitral awards to become public.

Even so, precedent has a powerful use in dispute resolution and is, therefore, a major advantage
of litigation.

4. Appeals

Appeals can be either a pro or con depending on your circumstance. Obviously, if you’re on the
winning side, appeals are not useful to you, but when taking an impartial view, they can provide
a clear advantage.

First and foremost, appeals allow you a course of action if a clear mistake has been made. When
it comes to something like arbitration, it is much harder to appeal.

5. Evidence

In the courts, the rules of what constitutes evidence are much stricter. If you have a strong case,
this is a clear advantage, as it leaves no room for you to be tripped up by speculation and
conjecture.

In alternative dispute resolution, these rules are not as clear and more power lies with, for
example, the individual arbitrator. This can mean that the outcome can rest on information that
would not typically come into play during litigation.

6. Cost

Cost is probably not something you would expect to see on a list of advantages of litigation! It’s
fair to say that ADR typically provides a cheaper path to resolution but that shouldn’t be taken
for granted.

In many circumstances, litigation can be a more cost-effective option, especially if it is a small

dispute that could be resolved in court quickly.

A primary reason for this is because ADR requires many of the same cost-implications, such as
hiring solicitors, and additional ones, like the arbitrator’s fees and in some cases, even a venue.
In complex cases, this can result in relatively similar costs, and in some cases, resolutions
through ADR are not even binding. That means if the parties don’t like it, they don’t have to
agree to it and the whole dispute could end up in court anyway.

It’s also worth noting that the same rule applies to speed. While you’d expect ADR to be
quicker, this is not guaranteed.

7. Results

One of the most obvious benefits of litigation is you know, however long it takes, that you’ll
eventually have a result (whether you like the result is, of course, another matter).

Where ADR can breakdown, litigation is your last and most conclusive hope of resolution or
closure. For that reason, it is always important to have litigation experts at your fingertips when
you go through the dispute resolution process.