LA3011 May B1

LLB
GRADUATE DIPLOMA IN COMMERCIAL LAW

Alternative Dispute Resolution

Thursday 20 May 2021

BLOCK 1 Available at: 06:00 UK time on Thursday 20 May 2021.

Submit before: 11:00 UK time on Thursday 20 May 2021.

You have FIVE HOURS in which to write your answers and upload them in the
required .doc or .docx format to the VLE. You are not expected to spend more
than FOUR HOURS writing your answers. The remaining hour is for
downloading, uploading, and to take short rest breaks.

PART ONE of the examination consists of Multiple-Choice Questions. Answer

these questions by writing the letter you think is the correct answer.

PART TWO of the examination consists of both problem and essay questions.
You must answer THREE from the SEVEN questions in PART TWO.

You must answer all parts of a question unless otherwise stated.

© University of London 2021

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PART ONE

Answer these questions by writing the letter you think is the correct answer
against the number of each question. Make sure you record BOTH the number
of the question and the letter representing your answer to that question. For
example, 20.B.

1. Which ONE of the following statements is CORRECT in respect of the

Small Claims Court Mediation Scheme? [1 mark]

a. The parties using the scheme must pay for the mediation.
b. The mediation will always take place during a face-to-face meeting
in the relevant court building.
c. The mediation will usually take place by a telephone appointment.
d. The parties will always be offered a three-hour mediation
appointment.

2. Which ONE of the following cases is NOT likely to be suitable for

mediation? [1 mark]

a. A claim for damages by a tenant against a landlord for breach of a

repairing covenant.
b. A claim for damages for wrongful interference with goods.
c. A claim for trespass and nuisance.
d. A claim for a debt to which there is no defence.

3. In which ONE of the following situations would a mediator NOT extend

a plenary session? [1 mark]

a. To facilitate an agreement on the issues to be discussed in the

mediation and the order in which those issues should be discussed.
b. To facilitate communication between parties who are hostile and
aggressive towards each other.
c. To facilitate an exchange of information between the parties about
an aspect of the dispute.
d. To facilitate a discussion of quantum of the claim and/or counterclaim
and the costs that each party have incurred to date.

4. Which ONE of the following statements is WRONG in relation to

mediation? [1 mark]

a. The costs of mediation will usually be lower than the costs of

litigation.
b. The parties can usually select the mediator.
c. Mediation can result in agreed outcomes that a court could not order.
d. A mediator can make interim orders during the course of a mediation,
such as an order for disclosure or an injunction.

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5. Which ONE of the following statements is INCORRECT in respect of
mediating multi-party disputes? [1 mark]

a. Mediation is not suitable for multi-party disputes, and such disputes

should always be litigated in the courts.
b. Mediation can be used for multi-party disputes, but someone should
be appointed to represent parties whose claims raise similar issues.
c. If a multi-party claim is mediated, it is likely that a team of mediators
would need to be appointed to manage the mediation and facilitate
negotiations between the various parties involved.
d. Multi-party disputes can be mediated but an ADR provider is usually
needed to deal with the administrative aspects of the mediation.

6. Jennifer suffers a broken foot when she trips on a sunken paving slab
outside the entrance of a supermarket. Proceedings have been issued
against the supermarket and the court has made an ADR order directing
the parties to attempt mediation. Jennifer wants her claim to be decided
by the court and does not want to engage in mediation.

Which ONE of the following describes the BEST advice to give Jennifer
in these circumstances? [2 marks]

a. The court cannot compel her to use mediation if she is unwilling to

do so, and so Jennifer does not have to engage in mediation if she
wants her claim to be decided by the court.
b. Jennifer is likely to be penalised in costs if the court finds that she
acted unreasonably in refusing to attempt to reach a settlement by
mediation.
c. Jennifer should only agree to mediation if the supermarket agree to
pay her costs of the mediation.
d. Jennifer should ignore the court order and proceed with the litigation.

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7. Oliver has brought a claim against Mohammad for personal injuries
suffered in a road traffic accident. A mediation took place six months ago
before proceedings were issued, but it was unsuccessful. Court
proceedings were commenced, and disclosure of documents and
service of witness statements and medical evidence has taken place. At
a recent case management hearing, the court made an order staying the
proceedings for one month for the parties to attempt settlement by
mediation. Mohammad can see no benefit in attempting a second
mediation.

Which ONE of the following statements is the CORRECT advice to give

to Mohammad? [2 marks]

a. Mediation should be attempted again, or Mohammad could be

imprisoned for contempt of court.
b. Mediation can be refused as there is no reason to believe it will be
more successful now than it was six months ago.
c. Mediation can be refused as Mohammad can show he has acted
reasonably in attempting settlement by taking part in the mediation
six months ago.
d. Mediation should be attempted as it is more likely to have a
reasonable prospect of success at this stage of the proceedings.

8. A mediation took place between Black Ltd (BL) and White Ltd (WL),
pursuant to a case management order made by the court directing the
parties to attempt to resolve their dispute by mediation. The parties were
unable to reach an agreement in the mediation because BL made it clear
it regarded its case as “watertight” and it was unwilling to make any
concessions in respect of its claim for breach of contract for the supply
of defective goods and it rejected all reasonable offers put forward by
WL, including an offer of £10,000. At the trial, the court awarded BL
damages of £5,000. WL submitted that BL should be deprived of some
or all of its costs because it failed to act reasonably in relation to offers
made by WL in the mediation, including the £10,000 offer. WL did not
make any of its offers on a “without prejudice except as to costs” basis.

Which ONE of the following statements is CORRECT in describing how

the court will approach the question of costs in these circumstances? [2
marks]

a. The court will investigate what happened during a mediation to

decide if BL acted unreasonably in relation to ADR.
b. The court will not investigate what happened in the mediation as the
process is confidential and “without prejudice” and will only hear
submissions about the offers made in mediation if both parties waive
the “without prejudice” rule.
c. The Court will hear submissions about the offers made in mediation
as it is in the public interest for it to override the confidentiality of the
process in these circumstances.
d. The court will never admit evidence about what took place in a
mediation in relation to submissions about costs.
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9. A mediation took place between James and Ahmed in relation to a claim
James intended to bring against Ahmed for damages for personal injury
and loss arising out of a road traffic accident he claimed was caused by
Ahmed’s careless driving. At the mediation, the parties reached a
settlement in the sum of £10,000. After the mediation Ahmed alleged
that he only entered into the settlement agreement on the grounds of
misrepresentation by the mediator about the true value of James’s claim.
He now seeks to bring a claim against the mediator to recover the sums
he has paid to James. In the mediation agreement, Ahmed agreed not
to make any claim against the mediator in relation to the mediation.

Which ONE of the following statements is the CORRECT advice to give

Ahmed about whether he can bring a claim against the mediator? [2
marks]

a. Ahmed could sue the mediator but the claim will be struck out as
mediators have statutory immunity from suit.
b. Ahmed cannot sue the mediator because he has contractually
agreed not to bring a claim against the mediator, and the court must
uphold such a clause.
c. Ahmed cannot sue the mediator because mediation is a confidential,
without prejudice, process and this prohibits the court from inquiring
what took place in the mediation.
d. Ahmed could possibly sue the mediator for misrepresentation about
the true value of James’s claim, but such claims have yet to be fully
tested in the courts of England and Wales.

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10. Coco Circus Ltd (CC) commenced proceedings against Big Top
Supplies Ltd (BT) for breach of contract in supplying a tent known as a
“Big Top” to house their circus shows seating a crowd of 750. Part of the
tent collapsed during a show and several members of the audience were
injured. During a mediation that took place between the parties, BT’s
managing director accepted that the steel bars used to make the tent
were not of the correct strength. The mediation did not result in
settlement because the parties could not agree on the quantum of the
claim. Since the mediation, BT have denied liability and defended the
claim on the basis that the accident occurred because CC failed to erect
the tent correctly on the night of the accident.

CC have served a witness summons on the mediator to attend as a

witness at the forthcoming trial so that he can be questioned about the
admissions made by BT in the mediation. The mediator has applied to
set aside the witness summons that was served on him.

Which ONE of the following statements is most likely to be CORRECT

on the facts of this case? [2 marks]

a. The Court is obliged to permit the mediator to be called as a witness

even in the face of objection by BT and the Mediator.
b. The admission of liability and statements made by BT during the
mediation are protected by the “without prejudice” rule and the
obligation of confidentiality which is binding on the parties to the
mediation. The Court is therefore likely to set aside the witness
summons.
c. The mediator’s application to set aside the witness summons is likely
to be dismissed because the admissions made by BT in the
mediation are relevant to the issues in dispute.
d. The admission made in the mediation is protected by the “without
prejudice” rule and the obligation of confidentiality, but it can be
disclosed because a party cannot maintain a defence which is
contrary to a clear admission that they have previously made, as this
would be tantamount to misleading the Court.

11. Which ONE of the following statements is WRONG in respect of The EU

Directive on Mediation in Civil and Commercial Cases? [2 marks]

a. It only applies to commercial and family matters.

b. Member states are required to encourage, by any means which they
consider appropriate, the development and adherence to voluntary
codes of conduct for mediators and organisations providing
mediation services.
c. Member states should protect the confidentiality of mediation and
ensure that neither mediators or those involved in the administration
of mediation shall be compelled to give evidence in civil or
commercial judicial proceedings except in very limited
circumstances.
d. Member states are required to encourage the initial and further
training of mediators in order to ensure that mediation is conducted
in an effective impartial and competent way.
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12. Which ONE of the following statements is WRONG in relation to the
“without prejudice” rule in mediation? [2 marks]

a. The without prejudice rule protects from disclosure any oral or written
communications which are made for the purposes of reaching a
settlement in the mediation.
b. Communications passing between the parties and the mediator after
the end of the mediation for the purposes of exploring settlement are
protected from disclosure by the without prejudice rule.
c. The without prejudice rule protects from disclosure all documents
used in the mediation.
d. The without prejudice privilege belongs to the parties and not to the
mediator, and if the parties waive it the mediator cannot enforce it.

13. Which ONE of the following statements WRONGLY describes the nature
or extent of the confidentiality obligation in mediation? [2 marks]

a. It is a contractual obligation on the parties because the mediation

agreement usually contains a confidentiality clause, but in the
absence of such a clause, an obligation of confidentiality will not be
implied.
b. The obligation of confidentiality is binding on both the parties and the
mediator and all of them must waive confidentiality if it is sought to
adduce evidence of what took place in the mediation.
c. The obligation of confidentiality can be overridden by the court if
disclosure is necessary to prevent criminal activity.
d. The obligation of confidentiality can be overridden by the court if it is
in the interests of justice to do so.

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14. Anna entered into a contract with B1 Painters Ltd (B1) to repaint the
interior and exterior of her property. The contract contained the following
clause:

“The parties shall endeavour to resolve any dispute arising under this
contract by mediation by appointing a mediator agreed between the
parties, or, in default of agreement, the mediator shall be appointed and
the mediation process to be followed shall be in accordance with the
procedure recommended to the parties by the Centre for Effective
Dispute Resolution, before court proceedings are issued to resolve the
dispute.”

Anna has refused to pay B1 the sums due under the contract because
she contends B1 are in breach of contract in failing to carry out the work
with reasonable care and skill. B1 have now issued court proceedings.
Anna is very keen to avoid litigation costs and wishes to try to reach a
settlement by mediation.

Which ONE of the following statements represents the BEST advice to

give to Anna? [2 marks]

a. She should apply to the court for a stay of proceedings so that a

mediation can take place in accordance with the ADR clause.
b. She should apply to the court for an order striking out the proceedings
as mediation has not been attempted pursuant to the ADR clause.
c. She cannot apply to strike out or stay the proceedings because the
ADR clause is not likely to be upheld by the court.
d. She should do nothing at the moment, but when the court rules on
costs, she should make submissions about B1’s failure to attempt
mediation in accordance with the clause.

15. Qureshi runs a pizza takeaway service. He is in dispute with Best Toms
Ltd who supply him with tomatoes and tomato sauce he uses in his
pizzas. The dispute concerns the supply of poor quality tomato sauce
which led to Qureshi facing complaints by his regular customers and a
general loss of custom. He claims that as a result of the breach of
contract by Best Toms Ltd, he has suffered losses of around £20,000.
Best Toms Ltd deny breach of contract on the basis that their head chef,
Tom, has not changed either their supplier or the recipe for the tomato
sauce. The supplier, Harvey, has also confirmed that there has been no
change in the variety of tomatoes sold to Best Toms Ltd, or the way that
they are grown. The parties have agreed to mediate. Any settlement
reached in respect of the claim has to be signed off by Arlene, the
Finance Director of Best Toms Ltd.

Which ONE of the following represents the BEST advice to give Best
Toms Ltd about who should attend the mediation on their behalf? [2
marks]

a. Tom.
b. Arlene.
c. Tom, Harvey and Arlene.
d. Tom and Arlene.
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PART TWO

You must answer THREE questions in this section.

16. Discuss whether the courts of England and Wales are likely to sanction
a party for acting unreasonably in relation to ADR, and the principles that
they will apply in deciding whether to impose a costs sanctions on such
a party. [25 marks]

17. Discuss the extent to which online dispute resolution may promote
greater access to justice and how it is likely to influence the future growth
of ADR. [25 marks]

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18. Dow Estates Ltd (DEL) are the freehold owner of all properties within the
Dow Housing Estate. The properties are leased to a number of different
tenants. Under the lease, DEL is responsible for the repair and
maintenance of the common parts of the estate, including the exterior of
the residential blocks of flats. DEL recoups some of its costs by way of
an annual service charge, which the tenants are required to pay. The
amount of each tenant’s contribution is worked out on the basis of a
percentage, which depends on a number of factors including the location
of their property within the Dow Housing Estate and the size of their
property.

The lease with each tenant contains a clause which provides that if a
dispute arises between DEL and the tenant about the amount of the
service charge, or the items comprised with it, or the method by which it
had been calculated the dispute should be referred for determination by
an agreed expert, or an expert appointed by the Royal Society of
Chartered Surveyors and Valuers, who would act as an expert and not
an arbitrator, and whose decision would be final and binding on the
parties except in a case of manifest error. The report of the expert would
be released to the parties with full written reasons within 28 days from
the date of appointment.

A dispute arose between Jane and DEL about the sum that she was
asked to pay by way of service charge for the period ending 30 April
2021. DEL issued her with a bill for £18,000, a very significant proportion
of the sum was alleged to be due to the replacement of exterior cladding,
which DEL contends is within the scope of DEL’s repairing obligations in
the lease and the cost of this is payable by the tenants under the service
charge clauses in the lease. Jane denies she is liable to pay this sum.
She is also refusing to refer the dispute for determination by an expert
or cooperate in the appointment of a suitable expert.

Jane has issued court proceedings to have the correct amount of service
charge determined by the court.

(a) DEL has applied to stay the court proceedings. What is the likely
outcome of this application? Give full reasons for your answer. [5
marks]

(b) Assume that the parties agreed to refer the dispute about the service
charge for determination by an agreed expert and valuer and Tom
Parker was appointed as the expert under the relevant clause in the
lease. He has asked the parties for their thoughts on the procedure
for the expert determination. What would be a suitable procedure for
the expert determination in this case? [6 marks]

(c) Can either DEL or Jane provide confidential information (either orally
or in writing) to Tom Parker during the Expert Determination and if
so, what are the likely consequences of providing Tom Parker with
confidential information? [4 marks]
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 (d) Assume Tom Parker has now produced his report and has found that
(a) as a matter of construction, the cladding is within the landlord’s
repairing covenant in the lease, and (b) consequently Jane is liable
to pay the amount levied by way of service charge. His reasoning is
not full and detailed. Jane believes he has erred in the way he has
construed the lease and also that he has inaccurately calculated the
percentage of the service charge she is liable to pay based on the
proportion her flat bears to the size of the overall building.

Is Jane able to challenge the determination of Tom Parker? If so,

what ground(s) of challenge may be available to Jane and what steps
does she need to take to pursue those ground(s) of challenge? [10
marks].

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19. Syed and Jasmine are neighbours who live in detached houses next
door to each other. Jasmine has recently obtained planning permission
to convert her loft into an extra bedroom and to extend her kitchen into
the side return of her property. The builders commenced work last week
and they have caused substantial damage to Syed’s property. Syed is
concerned about the following matters:

a. The builders have broken down and removed a fence that divided the
two properties, presumably to give greater access to the side of
Jasmine’s property in order to construct the foundations for the
kitchen extension.
b. The damage to the fence crushed five of Syed’s mature and rare
shrubs that were growing in pots situated on the side path of his
property, as the fence fell against then. The cost of replacing these
mature shrubs will be £800.
c. The damage to the fence has also resulted in the loss of tomato
plants that Syed had growing beside the fence. Last year, Syed sold
his organic tomatoes to a local garden centre and received a net
profit of £500. The garden centre promised to take his crop of
tomatoes this year and he expected to receive a net income of £1,100
as he had planted more crops. The tomato plants were destroyed by
the removal of the fence and it is now too late in the season to replace
them.
d. The removal of the fence also means that Syed can no longer let his
dog into the garden as it might escape. For the last two days, Syed
had to place his dog with a local dog-minding company during his
working hours, at a cost of £80 per day. This will continue until the
fence is replaced.
e. Syed is also concerned about the invasion of his privacy caused by
the removal of the fence. His kitchen window overlooks the side path
of his property, and the removal of the fence means that the builders
working on Jasmine’s kitchen extension are looking directly into his
property. Last week, they worked until 9pm every weekday and from
9am until 7pm at the weekend.
f. The builders have placed a radio on a bench on Jasmine’s property,
but close to Syed’s kitchen window. The radio is played loudly and
continuously whilst they are working on the premises, including late
into the evenings. The noise from the radio is so loud that the builders
have to shout at each other to be heard over it, and Syed can only
listen to the television in his property if it is at full volume.
g. Finally, dust and debris from the building work is constantly escaping
onto Syed’s plants and property. This is mainly because the builders
do not put rubbish in the bins and the fine cement mix dumped in a
heap on the side path of Jasmine’s property has been left uncovered.

Syed has issued court proceedings for damages for nuisance and has
also made an application for injunctive relief which has been listed for a
hearing early next week. In the meantime, the lawyers for the parties
have agreed to meet to try to negotiate a settlement of the claim.
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 (a) Identify the outcomes that you would be seeking for Syed in the
negotiation and the arguments you would put forward to achieve
those outcomes. [12 marks]

(b) Describe a suitable structure that could be proposed for the

negotiation. [6 marks]

(c) Assume the negotiation resulted in a settlement of all issues in

dispute between the parties. Syed is keen to ensure that the
settlement agreement is capable of being enforced quickly if the
terms agreed are breached by Jasmine. Describe what options may
exist for recording the settlement agreement and the option that you
would recommend in this case. [7 marks]

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20. You act on behalf of Zara who has issued proceedings against the
owners of a gym, Key Sports Ltd, claiming damages for personal injuries
sustained whilst exercising at the gym and loss of earnings caused by
the injuries. The accident occurred when a metal bracket holding a set
of weights became detached from the wall to which it was secured,
causing them to fall on her feet.

Zara has obtained a medical report in respect of her injuries and this has
been served on Key Sports Ltd and filed at court.

Key Sports Ltd admit liability for the accident but dispute quantum, both
in respect of the claim for personal injuries and the claim for loss of
earnings caused by the injuries.

The parties are far apart on the evaluation of the claim and as a result
have been unable to successfully settle the claim by mediation or
negotiation.

Zara’s lawyers have suggested to her that it might be a good idea to ask
the judge to carry out an Early Neutral Evaluation (ENE) in respect of
the quantum of Zara’s claim.

(a) Discuss whether ENE is likely to benefit Zara in this case and the
advantages and disadvantages of using it. [10 marks]

(b) Describe the main differences between ENE and Evaluative

Mediation. [4 marks]

(c) Assume that Zara has agreed to judicial early neutral evaluation.
What procedural directions is the judge likely to give in relation to the
ENE. [5 marks]

(d) Assume the judge has given his evaluation. Zara does not accept the
judge’s evaluation of her claim for damages for personal injury and
loss of earnings. How should she proceed? [2 marks]

(e) If Zara and Key Sports Ltd decided to settle the claim for the sum of
£15,000 on the basis of the judicial ENE, how should their settlement
agreement be recorded [4 marks]

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21. Arbitration is a process that is dependent on the creation of a valid
agreement to arbitrate. Discuss the requirements for a valid agreement
to arbitrate and the problems that may arise if such agreements are not
drafted with care. [25 marks]

22. A key feature of arbitration is the need for an arbitrator to act impartially
between the parties. The duty of an arbitrator to act impartially is
enshrined in the Arbitration Act 1996 and in the UNCITRAL Model Law
on International Commercial Arbitration. Discuss the nature and extent
of the duty of impartially and the action a party may take if it believes an
arbitrator lacks impartiality. [25 marks]

END OF PAPER

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