In this article, which is the first of a series of ten, I shall be looking at the start of a dispute and considering strategies and lines to take.
The first thing to say about strategy is that it is a good idea to have one. That inevitably involves working out what it is that the Client wants to achieve. Is it the payment of money? Is it the avoiding of paying money? Does it want other outcomes? Does it want a ruling whilst the project is ongoing that there has been a variation? It might want to give the other side or the Contract Administrator a “hard word” to make contract administration more favourable for the balance of the project. It might want a quick result or it might want a slow one.
The key is to be clear at the start what success looks like.
It is then necessary to identify the constraints and pressures. Is there a limited budget? Is cost recovery from the other side very important? Will the Client need litigation funding? Again all of those factors have to be considered.
And, of course, the characteristics and likely reaction at each stage of the opposing party must be considered. Will they simply engage and allow dispute to be resolved on its merits in what might be called the old fashioned way? Or will they adopt guerrilla warfare tactics? Will they accept a sensible neutral decision or will they fight all the way. Do they have deep or shallow pockets?
With these factors in mind, there are, in my view, five key questions.
First, what is the ultimate objective of the Client? That is not the same as asking neither what they are going to claim nor how they are going to go about it. On the contrary, what ultimately do they really want out of the dispute? Clients may not even share the answer to that question inside their own organisation and even more often they are nervous of sharing their real end game with their lawyers and other advisers. However, without knowing this it is impossible to go forward.
The second and third questions overlap. What dispute resolution tribunals or tribunal is the Client going to use and what can relief or order is it going to seek?
Everyone will have their own view about categories of Tribunal or means of dispute resolution. I list six Court, Arbitration, Adjudication, Expert determination, Mediation and finally direct negotiation between clients. People often forget the last but it is potentially the most valuable!
Within each of those categories, there are sub categories. Take Court. There is the London TCC, the Regional TCC, the Commercial Court, the Mercantile Court, the Chancery Division before one gets to the general High Court and County Court. There might not appear to be so many categories in the other types, but in reality, there are. The outcome of Arbitration, for example, and indeed Adjudication may be significantly affected by the characteristic of the Arbitrator or Adjudicator. So too might be the choice of the appointing body in for example the adjudication.
There are probably three factors that are critical when choosing a Tribunal. First, what are the prospects of the Client getting a dispute resolver, who for whatever reason and without any impropriety is more likely to be sympathetic to the Client’s case than to his opponent’s case? Second, what is it going to cost and can the Client recover the costs if it wins? Third, how long is it going to take to get a decision that is going to either be final or respected? When one poses those three questions, one sees the myriad of permutations.
Then one has to feed into it the process what the relief one seeks it. Is the objective short term cash flow? Is it to take advantage of a contract which enables the Client to hang on to the money until the end? Is one after some relief that simply brings the other side to the negotiating table? Is the relief in the dispute the end in itself? Is there an intent to discourage others in other disputes? Or to discourage others from starting proceedings? Is the aim to get a declaration that means that the Contract will be differently administered going forward, e.g. that there has been a variation?
Fourthly, it is key to identify the earliest possible stage the key lines that the client wishes to take and its approach. Derek Wood QC in his marvellous lecture on Skeleton Arguments says that they should start with a clear summary of what the case is about such as you would tell your Mother if she asked what you were doing. Every case needs, whether you are Claimant or Defendant, that summary at the start. Of course the summary may change and develop but the thinking needs to be done early.
Fifthly, it is necessary to get the right team. For me, (as I write this in January I accept that there is an element of turkey voting for an early Christmas), and assuming that there is to be expert evidence, the key decision is very often the identity of the expert. There will be a separate article in this series on experts, but choosing an expert who is reliable, authoritative, hardworking, analytical and above all straight is one of the most important decisions the client can make.
There therefore needs to be a single or at most two sheets of A4 the strategy which identifies
The ultimate objective,
The Tribunal to be used,
The relief to be sought in the proceedings
A summary of the Client’s overall position.
And the identity of the expert
With that done, let battle commence.