A marketing company is seeking compensation from its IT support provider, claiming that the supplier did not respond adequately to a computer system outage. This resulted in a prolonged downtime, impacting the marketing company's ability to meet contractual obligations with its clients and causing the company to suffer losses and expenses.
The supplier argues that factors beyond their control caused the outage; therefore, they are not liable for any breach of contract. To resolve the claim without resorting to legal proceedings, the supplier suggests alternative dispute resolution (ADR). However, the marketing company has not responded to the written request for ADR.
What is the likely impact of failing to respond to the request to engage in ADR if proceedings become necessary?
A marketing company is seeking compensation from its IT support provider, claiming that the supplier did not respond adequately to a computer system outage. This resulted in a prolonged downtime, impacting the marketing company's ability to meet contractual obligations with its clients and causing the company to suffer losses and expenses.
The supplier argues that factors beyond their control caused the outage; therefore, they are not liable for any breach of contract. To resolve the claim without resorting to legal proceedings, the supplier suggests alternative dispute resolution (ADR). However, the marketing company has not responded to the written request for ADR.
What is the likely impact of failing to respond to the request to engage in ADR if proceedings become necessary?
The marketing company is likely to be penalised in costs, as it is not acceptable to fail to respond to a request for ADR.
(C) The court may impose costs on the claimant if they ignore a request for alternative dispute resolution (ADR). Case law has established that it is not acceptable to disregard such a request. If a party thinks that ADR is not appropriate, they must respond clearly, explaining their reasons. The court has the discretion to penalize the party by limiting the legal costs they can recover, regardless of the case's outcome.
Option (A) is incorrect because the court is likely to consider a failure to respond to a request for ADR as unreasonable, particularly if no reason is given.
Option (B) is incorrect because the court does not have the power to dismiss a claim for refusal to engage in ADR. However, as previously stated, other sanctions are available.
Option (D) is incorrect because ADR is available to both parties throughout the claim, and the court will encourage them to consider it, regardless of any previous refusal.
Option (E) is incorrect because the court will not ask the claimant to provide reasoning at this point. The District Judge may ask the parties to provide information about their attempts to resolve without proceedings as part of the case management process, but this will occur later in the case's timeline.