Attorneys vital for dispute resolution
It may never be necessary for the client to disclose that it has sought legal advice
FOR dispute resolution to be effective, it is important to recognise that attorneys are not to be regarded as a last resort when all other efforts have failed. Involving a skilled attorney in potential disputes as early as possible gives the greatest prospect for the client to be guided to the best solution, a solution which, if possible, avoids the need to go to arbitration or litigation altogether. In fact, it may never be necessary for the client to disclose that it has sought legal advice at all.
Where the resolution of the dispute requires a formal process it is important to identify the process most likely to achieve the result that the client requires in the circumstances. Litigation through the courts is often the best way for a client to achieve its purpose but alternative dispute resolution has many advantages, although lawyers are criticised for advising their clients to avoid the courts. Not least of the advantages of alternative dispute resolution are confidentiality and maintaining some control over the administrative side of the process.
There are also significant efforts being made to promote the benefits of mediation in SA. We have been slow in this country to follow the trend towards mediation seen in Europe and the US but mediation has significant advantages over other forms of dispute resolution. It is quick and cost effective and by contrast with litigation or arbitration, relationships are less likely to be destroyed. Once a party has been cross-examined, relationships are often irreparably harmed.
The delays that are experienced in our courts are a real concern for clients in commercial disputes and one of the reasons for the popularity of the alternatives. The manner in which many courts operate also provides opportunities for parties to frustrate the process and delay matters actually coming before a judge. Arbitration by com- parison is not a cure-all by any means, but a firm and proactive arbitrator can make it more difficult for parties wishing to frustrate the process.
Looking to the future, the new Companies Act promises some challenges for dispute resolution specialists as there will inevitably be disputes around the interpretation of the legislation as the common law, which has developed around the existing Companies Act, will have limited application. Further, the new act includes its own alternative dispute resolution procedures and it will be interesting to see the effectiveness of these.
Business rescue also introduced by the Companies Act is an exciting development, adding a further alternative to the old chestnut of liquidation, and legal firms will undoubtedly be called upon to advise their clients on the appropriate use of business rescue as well as representing practitioners, companies and individuals involved in the process.
Despite the recession, it is in the area of commercial disputes that we have really seen growth in the dispute resolution practice. This goes against the traditional assumption that recessions bring only insolvency, debt recovery and divorce. Perhaps those traditional assumptions will be less reliable now that the litigation sausage machine is no longer good enough and clients require more flexibility from dispute resolution practitioners.
Litigation through the courts is often the best way for a client to achieve its purpose but alternative dispute resolution has many advantages