Looking forward…

As we leave 2021 (and hopefully the pandemic) behind, our dispute resolution team will explore some of the lessons learnt and key developments we can look forward to in 2022.

The pandemic taught us, like many businesses, that we can function remotely. Judges, lawyers and clients were forced to alter how they conducted dispute resolution during the pandemic but out of that came, as the Master of the Rolls, Sir Geoffrey Vos, comments, an opportunity for us to “rethink the justice process”.  Sir Geoffrey wants to go further and digitise the court system to allow better access and a more streamlined service. There is real merit in virtual dispute resolution. Online court hearings and virtual mediations really do work as well as save time and money.  We certainly expect this trend will continue beyond 2021.

Hand in hand with a digital system, Sir Geoffrey advocates a move away from Alternative Dispute Resolution (ADR) being seen as ‘alternative’. Mediation and other forms of ADR have, for some time now, been on the rise as ADR is generally a cheaper and more flexible mechanism for parties to try and settle their disputes.  In July 2021, the Civil Justice Council published a report concluding that mandatory ADR was lawful as it was not incompatible with the right to a fair trial under Article 6 of the European Human Rights Convention. The Ministry of Justice launched a call for evidence in August 2021 on settling cases outside of court.  Their ambition is to ‘mainstream non-adversarial dispute resolution mechanisms’ in order that litigation (court) really is the remedy of last resort.  Of course, there will always be those who want their day in court, but mandatory ADR and an expansion of the fixed costs regime may make even the most reluctant to settle think twice.

The general shift towards ADR and dispute avoidance can also be seen in the construction industry. Over the past couple of years, a number of schemes have also been introduced to address concerns which many in the industry have about whether adjudication is cost effective for low value disputes.  More recently, JCT released its Dispute Adjudication Board Documentation which enables parties to a JCT Design and Build Contract and JCT Major Project Construction Contract to appoint a dispute adjudication board. Whilst the idea of a dispute avoidance / adjudication board is not new, it is positive to note that the JCT documentation is compliant with the Construction Act.

The construction industry was one of the worst hit by the pandemic and we expect the construction industry will continue to feel the effects of the pandemic for some time with disputes over the impact of the pandemic on construction contracts and performance, labour and supply difficulties, vaccination requirements etc.

With declining government funding post-pandemic and increasing interest and inflation rates, we expect 2022 will also bring an increase in insolvencies and insolvency proceedings due to corporate distress.

Commercial landlords have well and truly been kept on their toes during the pandemic. Protective measures introduced to help tenants deal with covid related rent arrears will come to an end but under the Commercial Rent (Coronavirus) Bill, which is due to come into effect next month, parties will be required to arbitrate for pandemic-related rent arrears.

We hope you enjoy our upcoming series and if you have any questions or wish to discuss any matters raised with a member of our team, please do not hesitate to contact us on 01228 552600 or 01524 548494.

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