Types of dispute resolution clauses—litigation, mediation, multi-tier, hybrid and carve-out clauses

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Types of dispute resolution clauses—litigation, mediation, multi-tier, hybrid and carve-out clauses
  • Litigation clause
  • Scope of the clause
  • Issues to consider
  • Mediation clauses
  • Scope of the clause
  • Settlement
  • Procedural rules
  • Issues to consider
  • Multi-tier or escalation clauses
  • More...

Types of dispute resolution clauses—litigation, mediation, multi-tier, hybrid and carve-out clauses

Many contracts contain dispute resolution clauses. Sometimes these are straightforward clauses simply providing for litigation or perhaps arbitration (and sometimes also dealing with jurisdiction and applicable law). However, it is possible to include a dispute resolution clause which provides an alternative to this by setting out other forms of alternative dispute resolution (ADR) to be followed in the event of a dispute. These are sometimes identified as ADR clauses.

Parties have several options open to them (see list below), but it is important to understand the consequences of your drafting decisions. This Practice Note considers some of the clause options available and assess some of the issues in relation to each type of clause.

The types of dispute resolution clause considered in this Practice Note are:

  1. litigation only clauses

  2. mediation clauses

  3. multi-tier clauses (escalation clauses)

  4. hybrid clauses, and

  5. carve-out clauses

If court proceedings are commenced in breach of an enforceable dispute resolution agreement, the court has the discretion to stay the proceedings (Cable & Wireless v IBM and Ohpen Operations v Invesco Fund Managers). The court will take into consideration, when exercising its discretion, the public policy interest in upholding the parties’ agreement and furthering the overriding objective in assisting the parties to resolve their disputes (Ohpen and see News Analysis: Construction and enforcement of multi-tiered dispute

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