ADR OR TRIAL?
Litigation is the last resort. Do you agree?
Litigation is always the last resort to resolve your legal disputes. In some jurisdictions it may be both cost and time prohibitive to take the litigation path and you may end up throwing good money after bad. Furthermore, there are downside effects such as the pressures and risks of not being successful at trial.
There are other alternatives to trial to resolve your disputes and our State Courts also encourage you to explore these alternative processes.
Alternative Dispute Resolution (ADR)
The term alternative dispute resolution is an umbrella term which encompasses various dispute resolution methods other than going to trial, including the following:
- Neutral Evaluation
A key feature of ADR is that the dispute resolution processes are conducted privately. Similar to other out of court settlements, the terms of the mediated agreements are not known publicly.
Mediation is one of the most popular ADR processes whereby a neutral third party i.e., the mediator, assists the disputing parties to reach a settlement (facilitated settlement). In facilitative mediation, the mediator will not determine who is at fault but instead will only assist the parties to focus on problem solving and the mediator will not force a decision on either party, he helps the parties to focus on finding solutions that meet their concerns. Mediation is a service provided by the State Courts Centre for Dispute Resolution (SCCDR).
Neutral Evaluation is conducted by a neutral third party, i.e. an evaluator, who is usually a legal professional (eg. a judge) hears summary of each party’s case and gives a non-binding assessment of the merits of the case. This can then be used as a basis for settlement or for further negotiation. Neutral Evaluation is a service provided by the SCCDR where a judge will be your evaluator.
Conciliation is a court dispute resolution process for the parties to resolve their dispute without going to trial. It allows the parties to seek guidance from the Judge during the conciliation session and the judge takes an active role , deliberately suggesting ways in which the parties might reach settlement.
Arbitration is a private, confidential determination of a dispute by an independent third party i.e. an arbitrator, who makes a decision according to law. During an arbitration hearing, both parties, with their respective lawyers, will present their case to the arbitrator. The arbitrator’s decision, known as an award, is legally binding and can be enforced through the courts. The Law Society of Singapore provides low-cost arbitration services through the Law Society Arbitration Scheme (LSAS).
WEIGHING UP ADR OPTIONS
There are reasons for using or not using ADR but should you choose ADR then the best option may be the one that best addresses your needs. Every situation is different, some more complex than others and therefore some favouring ADR and others not. It is important to note that the courts now normally expect the parties to provide reasonable grounds for not engaging in ADR and therefore the factors need to be weighed carefully.
Factors change over time, so a decision about ADR changes as well such that a case may move between litigation and ADR options. Whatever the decision we should look at some potential advantages and disadvantages of ADR.
Potential Advantages of ADR
There are many potential advantages of ADR. Whether a potential advantage is actually achieved depends on the type of ADR selected:
If ADR is used at a relatively early stage it can be significantly cheaper than going to trial. It ensures that costs does not build up, especially when relatively inexpensive method such as negotiation is used. This potential advantage decreases if ADR is delayed and/or if a relatively expensive form of ADR such as arbitration is selected.
Speed of settlement
Some cases take months or even years to resolve at trial. The right ADR option such as negotiation or mediation can shorten this timeline tremendously.
Control of process
ADR processes such as mediation offer greater autonomy and control versus a court case which is essentially under the control of a judge.
Flexibility of process
A case that goes to court must follow a set process that generally includes a writ of summons, entering an appearance, pleadings, etc. ADR options provides for less formality, and parties can agree the process to be followed in a mediation or arbitration. An ADR process will also normally be more flexible with regards to the use of information and evidence.
ADR enables a client to keep the outcome of the case confidential as ADR is a private process, and confidentiality clauses are a normal part of an agreement for or reached as a result of ADR.
Clients tend to express higher levels of satisfaction with a successful negotiation or mediation process than litigation, perhaps because they have been involved in agreeing the outcome, and have felt more in control of the process.
Potential Disadvantages of ADR
The potential disadvantages will not apply to every case, and they may be largely avoided with careful choice of an appropriate ADR option.
ADR has to be used appropriately otherwise a failed ADR If ADR is likely to add to expense for example if it has to ultimately go to trial. Parties who win in a settlement will have to pay his or her own costs unless this had been agreed as part of the settlement.
As with increased expenses, a failed ADR may cause delay if the case goes to trial. It is important to assess carefully when ADR has a reasonable chance of success. This can be complicated where one party is keen to use ADR but the other is not.
Possible reduction in outcome compared to a court judgment
A party with a relatively weak case may seek ADR in the hope that an offer of settlement much less than having to pay the winner’s costs at trial is the final outcome. A party with a strong case may naturally be reluctant to select ADR in such circumstances.
Confusion of process
While it is clear in selecting either ADR or litigation, a court action may often involve some negotiation and mediation which may give rise to confusion and difficulties in analyzing a case. It is important therefore be clear as to the ADR options being pursued.
CIVIL LITIGATION IN SINGAPORE
The civil justice system is the means provided by the State for the people and businesses to peacefully resolve legal disputes and enforce their rights. The machinery of the State justice system comprises the courts and their procedures, the judiciary and any other institutions or processes involved in the delivery of justice.
Litigation refers to the process of taking legal action and differs with mediation, neutral evaluation, conciliation and arbitration.
While both the civil justice and criminal justice systems have some deterrent effect, the main purpose of the civil justice system is redress while that of criminal justice system is punishment.
In criminal litigation, the State, represented by the Public Prosecutor, prosecutes a criminal for an offence. In civil litigation, the party who has suffered the wrong – ‘the claimant’ brings the case against the ‘defendant’.
The burden and standard of proof
Burden of proof refers to the responsibility for proving the case. In both civil and criminal procedures, the burden of proof lies with the person who initiates the action. In civil proceedings the claimant must prove the case. In criminal proceedings the prosecutor must prove the case.
Standard of proof refers to how sure the decision maker has to be about the responsibility of the defendant. This is different in civil and criminal cases. In civil cases the claimant must prove the case on ‘the balance of probabilities’, which means that the evidence proves it is more likely than not that the defendant is liable. In criminal trials, the prosecutor must prove the case against the defendant ‘beyond reasonable doubt’. The standard of proof is more stringent in criminal cases because of the seriousness of the penalty and because of the stigma involved in a criminal conviction.
Decision maker refers to the judges or magistrates in most civil cases decisions.
How does the civil process work?
Before Legal Proceedings
Letter of demand – claimant’s lawyer will send a letter of demand to the other party requiring the other party to comply with the claimant’s demands or risk a lawsuit. The lawyer will advise the claimant if the other party complied or did not comply with the demand and may then proceed with legal action in the event of the latter.
Jurisdiction of the Courts
Small Claims Tribunal
SCT has jurisdiction to hear claims of up to $20,000, or up to $30,000 if both parties agree to raise the claim limit. SCT will be discussed separately in another guide.
The claimant must proceed to the State Courts or the High Court if the quantum of dispute falls outside of the jurisdiction of the SCT. The State Courts include the Magistrate’s Court and the District Court.
The Magistrate’s Court has jurisdiction to hear civil actions where the quantum of dispute does not exceed $60,000.
The District Court has jurisdiction to hear civil actions where the quantum of dispute does not exceed $250,000. If the sum exceeds $250,000 and if both parties agree in writing, the case be heard by the District Court.
The High Court - Where the quantum of dispute exceeds the jurisdiction of the District Court, the action will have commence in the High Court.
Commencement of Civil Action¹
A Writ of Summons – is filed and processed by the Court. The writ has to be served on the defendant. With permission of the Court, a writ may be served on a defendant outside of Singapore. Upon the writ being served, a memorandum of service must be filed with the Court.
Entering an appearance – If a defendant wish to defend the case, he/she must enter an appearance by filing a Memorandum of Appearance with the Court before the deadline stipulated in the writ. If he/she does not wish to defend the case, no appearance need be entered. The plaintiff will then apply for a judgment in default of appearance. In this situation, the judge will decide the case without participation of the defendant.
Pleadings – A pleading is a party’s written statement of the facts on which he/she relies for the claim or defence. The typical pleadings in an action commenced by a Writ are:
Statement of Claim
Defence or Defence and Counterclaim
Reply or Reply and Defence to Counterclaim
Summons for directions - After pleadings close, the plaintiff will take out a summons for directions. Summons for directions happens when the parties need to determine what further steps are required to effectively prepare for trial for example directions on what to file, exchanging of affidavits, number of witnesses and number of days a case may require, are decided at this stage. Parties will also need to agree on specific evidence such as expert advice to be used at trial.
Interlocutory applications – Generally, interlocutory applications are initiated by filing a Summons, together with an affidavit to support the application. In the course of preparing the case for trial during the pre-trial stages, each party may file interlocutory application to the court in order to further the preparation of his case. Examples of common interlocutory applications are:
Application for discovery of documents:
Application for the amendment of the various documents filed
Application for default judgment:
Application for summary judgment:
Court Dispute Resolution (CDR) - During the hearing for the summons for directions, CDR may be ordered by the judge. CDR includes alternative methods of dispute resolution, such as mediation, arbitration or neutral evaluation.
Setting down - After the pleadings (such as the statement of claim, defence, reply) have been filed and the various pre-trial matters have been dealt with (including the disclosure of all documents and other evidence to be relied on at the trial to support each party’s case), and parties are ready for trial, the case must be set down for trial. This is a necessary step which is to be taken by either party (usually the plaintiff) before an action goes to trial.
Pre-trial conference - Pre-trial conferences are sessions with a Judge to confirm that all pre-trial matters and applications are dealt with before the matter proceeds for Trial.
Judgments and orders
The judgment is the decision of the court at the conclusion of the trial. The court may pronounce judgement immediately after listening to the closing submissions. Alternatively, the court may adjourn the case to take more time to consider the evidence and arguments. In such an instance, the court will inform the parties on a later date to attend before the court for the delivery of judgment.
In certain cases, including personal injury claims, a Judge may grant judgment on the issue of liability but not make a ruling on the precise quantum of damages that has to be paid to the successful litigant by the other party. In such a case, the quantum of damages to be awarded is assessed by a Registrar in a hearing in chambers. The Registrar will hear evidence from appropriate parties, such as the injured plaintiff or medical experts, to determine the appropriate quantum of damages to be awarded.
Enforcement of judgments and orders
Depending on the type of judgment awarded and the available assets of the judgment debtor, judgments are usually enforced in a number of ways:
- Writ of seizure and sale
- Winding-up applications
- Writs of possession
- Writs of delivery
- Writs of distress
- Receivership appointments
In restricted circumstances, an appeal is available to either the plaintiff or the defendant, to try to overturn the judge’s decision and take the case to a higher court.
¹ Source: statecourts.gov.sg