FA Strategic Alternative: ADR for High-Value Commercial Disputes
When a significant commercial dispute arises, the instinctive response is often to resort to court proceedings. For business owners, shareholders, and directors facing disputes that revolve around intricate financial issues and evidence, however, judicial processes can involve aspects which are detrimental to achieving an efficient resolution.
Often characterised as a long, arduous process, litigation can also be a very expensive way to resolve disputes, and in instances where a court appearance isn’t desirable by either party, they may wish to consider (with their legal advisers) the suitability of alternative dispute resolution (ADR) procedure in its place.
ADR procedures are often already included in agreements as ways to handle disagreements. If they are not, the parties can still agree to use a private and binding process to resolve their dispute. They may also be able to choose a dispute resolver who has expertise in the specific area of their disagreement.
At Wilder Coe, we have recently launched a distinct specialist ADR offering for business-related disputes led by Daniel Djanogly. As a qualified and experienced ADR arbitrator and expert determiner with a strong forensic accounting background, Daniel’s specialist services provide a private alternative to court proceedings for disputes involving critical financial matters, including complex accounting, financial loss and share valuation issues.
This article provides a brief overview of the three types of alternative dispute resolution services offered, examining arbitration, which addresses a broader range of disputes.
Early neutral expert evaluation
Early neutral evaluation is a non-binding assessment where an independent evaluator provides an impartial view on the technical/ expert issues in dispute.
Expert determination
A private process where the parties appoint an independent subject matter expert to decide a specific technical, financial, or valuation-based issue.
Arbitration
Arbitration is a formal, adjudicative process in which the parties submit their dispute to an independent arbitrator, who hears evidence and legal argument and issues a binding award.
| Binding? | Decision Maker | Purpose | Best For | |
| Expert Determination | Usually binding | Technical/subject expert | Decide a specific technical issue | Situations where the dispute hinges on expert knowledge rather than legal interpretation. |
| Early Neutral Expert Evaluation | Non-binding | Neutral evaluator | Provide an early opinion to guide settlement | Clarifying expectations, reducing unrealistic positions, and steering parties towards settlement. |
| Arbitration | Binding and enforceable | Arbitrator | Full resolution of a legal dispute | Complex legal or commercial disputes requiring a binding, enforceable decision. |
The benefits of opting for ADR Arbitration
Privacy is perhaps the deciding factor for many when choosing to approach a dispute outside the court, as arbitral proceedings are private by default. Evidence, submissions, financial data, and the award itself would be subject to the privacy of the process – a potentially meaningful consideration in disputes involving proprietary business information, commercially sensitive valuations, or allegations between shareholders that neither party wishes to be aired publicly.
Specialist expertise, the choice of a tribunal with expertise in the critical technical/ expert issues in dispute may be available in ADR, can be an equally significant factor. In disputes centred on share valuations, loss of profits calculations or complex financial modelling, the quality of the decision depends heavily on the decision-maker’s capacity to evaluate that evidence. Appointing an arbitrator with a specific financial background can be preferable to leaving that allocation to the court lists.
Procedural flexibility allows hearings if required and the proceedings generally to be scheduled around the commercial realities facing the parties and their witnesses, rather than fixed court windows. This may translate into faster resolution.
Finance-specific disputes
Arbitration may be considered well-suited to the full range of commercial disputes; and may be particularly advantageous where the substance of the dispute is financial (or otherwise technical) in nature and the parties can choose their tribunal with suitable expertise.
Loss of profits and financial damages claims arising from breach of contract or tort, for example, can involve highly technical accounting and share valuation analysis that should be well within our expertise and experience.
Shareholder, joint venture, and partnership disputes may already be subject to agreements containing arbitration clauses and, in any event, may be well-suited to the process. The parties may have a pre-existing commercial relationship and a mutual interest in private, efficient resolution.
Possible outcomes
While every dispute is different and will therefore yield different outcomes, arbitration usually culminates in a written award – a final, legally binding decision similar to a court judgment. Amongst the reliefs that may be available, the arbitral tribunal can have power to award damages, interest and the recovery of legal costs.
Where privacy is a priority, where the dispute concerns complex financial matters, and where the parties wish to retain control over who decides, arbitration provides a route to binding resolution. It gives a binding result which may be more suitable for complicated cases where these needs matter most.
How we can help
Our ADR expertise is particularly well-suited for higher-value matters, including:
- M&A Disputes (e.g. warranty claims, completion accounts, deferred consideration)
- Commercial disputes (e.g. business interruption, loss of profits)
- Shareholder, joint venture and partnership disputes
Speak to our specialist ADR team for more information about our services.
Parties are advised to take professional legal advice on the suitability of any dispute resolution process for their needs and that of their dispute, and in the conduct of any such process. Please note that given the neutral nature of ADR dispute resolution roles, communications in this regard will be on a disclosable basis.
