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