Given the effect that recent pandemic events have had on businesses with some left struggling we thought it timely to cover the topic of disputes and litigation.
A dispute is not a situation that individuals, companies or practices wanted to be involved in and it is a situation that is generally associated with stress however, this article proposes to shed some light on the processes and explain some of the terms involved.
Disputes & Litigation
So put simply and to clarify the two terms – a dispute is defined as a disagreement between two parties. Where those parties are unable to resolve their disagreement between themselves (or with the assistance of legal practitioners), they may then decide to commence litigation.
Litigation is the formal process of seeking a resolution through the Court system. Essentially, it is a means by which one party can attempt to enforce or defend its legal rights against another party and the matter is to be determined by a judicial officer or a Judge.
As no two people are the same, no dispute is the same. Parties can vary (for example, between two individuals, between a business and an individual, or between two businesses), the type of dispute (a contract that’s been breached, director or shareholder disputes within a business, employees or contractor issues, debt recovery – these are just a few examples) and then finally, the Court or Tribunal that is best placed to deal with the dispute.
It is important that parties understand at an early stage what their rights are in any dispute and a lawyer can assist in identifying those legal rights. At Burke & Associates Lawyers we also act to guide clients in any dispute. We consider strategy, risk and together with our clients weigh the advantages and disadvantages of engaging in a dispute, taking steps to resolve a dispute, making the decision to commence litigation and navigating the Court & Tribunal system.
For example, you may be considering a claim against a party that you think is available to you but time runs away from you. There are limitation periods to bring some claims in the Courts so obtaining advice as early as possible is crucial.
Disputes & Alternative Dispute Resolution (ADR)
Let’s start at the beginning with a disagreement between two parties.
If able to do so, resolving a dispute is in all parties' best interests and its important to know that negotiations to resolve a dispute can occur at any point. The commencement of the litigation process does not mean that a matter must proceed all the way to a trial or final hearing for determination – most matters settle at a stage long before trial or as we say, “on the steps of the Court”.
There are several strategies and processes that parties can utilise to look to resolve a dispute without the need for litigation. The umbrella term for this is Alternative Dispute Resolution.
Alternate Dispute Resolution includes options such as negotiation, mediation, arbitration, and other expert determination.
Whilst negotiation is self-explanatory, Mediation is the process where the parties can discuss the issues in dispute with the assistance of a mediator to try and resolve the matter. The mediator is an independent person, specialised in the type of proceeding between the parties, whose role is to assist and guide parties toward any resolution, they do not decide on behalf of any party. Mediation is a confidential process so anything discussed in the mediation cannot then be used by any party in Court later.
Mediation can be used by the parties prior to any Court proceeding but most Courts do also require that the parties attend some form of mediation at some stage during litigation.
Arbitration is another form of alternative dispute resolution. This is when a referral of the dispute is made to a neutral third party known as an arbitrator, but this time for determination. Arbitrators can make interim and final determinations. Arbitration sessions are conducted in a manner similar to litigation, but the hearing and determination is usually agreed by the parties to be private and confidential.
You may see clauses contained within your commercial agreements for arbitration to be conducted when a dispute occurs.
Expert determination can also be utilised (usually to determine one specific point in a dispute).
You also may hear terms such as a settlement conference, round table conference, without prejudice discussion – these are all terms used under Alternative Dispute Resolution as options for parties to try and resolve a dispute.
If not already obvious, the advantages of using an alternative dispute resolution process is ultimately that it can save parties both the time, money and stress of Court proceedings.
There are circumstances where an ADR processes may not be successful or they may not be appropriate for a certain dispute. A decision may then be made to commence litigation. So let’s take the scariness out of this term and just talk facts for a moment.
The litigation process requires each party to appear in a Court or Tribunal and to present their arguments and supporting evidence, where a judicial officer or Judge will then decide which party is successful. If a party disagrees with that decision, they may have the ability to appeal to a higher court.
Most parties will engage a lawyer that practices in litigation to guide them through this process and it may also be necessary to engage a barrister. A barrister is also a legal practitioner but is specialised in a certain area of law and Courtroom advocacy, they work together for a client.
To commence litigation, a party will likely be required to prepare a number of Court documents setting out what their claim is against the other party and must pay a filing fee to the Court. The defending party will then be required to prepare Court documents in response. Depending on the type of dispute, there are a number of steps that might be ordered by the Court that the parties must comply with – these can include discovery of documents – that is, disclosure of all documents in your possession that are relevant to the issues in the dispute (whether or not those documents are favourable to you), obtaining expert witness evidence, issuing subpoenas, mediation or another alternative dispute resolution process and leading all the way up to a trial or final hearing for the matter to be determined by a judicial officer or judge.
Some of the advantages of litigation ,include:
- Certainty – the dispute is now before the Courts, and they set out a clear timetable with dates by which parties must comply with certain actions. There are consequences for parties who don’t comply and if the matter cannot be resolved, a judicial officer or judge will make a determination.
You have, the benefit of time and understanding how long the dispute may be in progress for. Parties can often feel that the negotiation process with a party (without having litigation on foot) can be slow, with continuing back and forth which may ultimately not end up resolving.
- Resolution Options - There is still the ability to resolve a dispute at any stage during the litigation process and it is usually a requirement that parties attend mediation or some other form of alternative dispute resolution process to try and achieve a resolution and halt further steps in the litigation process.
- Appeal – if a party is unhappy with a decision made, they may have the ability to appeal the decision to a higher court.
Disadvantages - Litigation can be take a long time, be complicated, and costly. It does not guarantee the outcome you seek. And it’s Adversarial: By it’s very nature litigation is a fight.
How do costs work with disputes and litigation?
There is a perception that “Oh well if I’m successful they’ll have to pay my legal fees” so again it’s important to understand the facts.
If you are successful in relation to some or all of your matter, it is likely that the Court or Tribunal will order the opposing party to pay some of your legal costs. But these costs are usually calculated by applying the relevant Court scale of costs applicable to your matter (which is lower than legal costs – both of a lawyer and barrister) so in the end you may only recover between 25% to 70% of your total legal costs.
It’s also important to remember the alternative, that if you are unsuccessful in relation to part or all of your matter, it is likely that the Court or Tribunal will order you to pay some of the other party’s legal costs.
If litigation takes place in a Tribunal, (each state has one, in Victoria ours is VCAT (or the Victorian Civil & Administrative Tribunal) – these are usually no cost jurisdictions which mean that the Tribunal is unlikely to make an order that the opposing party pay some of your legal costs or order you to pay some of the other party’s legal costs. But, there are some circumstances in which the Tribunal may make an order for costs. .
Our Disputes & Litigation Lawyers
At Burke Lawyers, our dispute resolution lawyers have an extensive depth of experience in dealing with any dispute or litigation matter and in engaging in alternative dispute resolution processes. Our commercial & disputes division is led by our Principal, Meghan Warren who together with Principal, Rosy Roberts have the level of knowledge and experience to advise on these situations. Rosy & Meghan are admitted to practice in all Victorian Court jurisdictions, as well as the Federal Court.
If you require any advice about possible litigation or a dispute or would simply like to have a quick discussion with one of our dispute resolution lawyers please contact our team on +61 3 9822 8588 or via email here.