The following questions and answers address some of the practical issues that arise in this area.
Will the courts enforce an agreement to refer disputes to a specified ADR procedure?
In principle yes, although the agreement has to be specific. There is a legal principle that an agreement to negotiate is unenforceable but this is based on the uncertainty of such an agreement. Where the parties prescribe a precise means of attempting to reach resolution, such as identifying a particular and well known procedure from an experienced dispute resolution provider, there will be sufficient certainty for a court to determine whether or not it has been followed and it may enforce compliance.
However, this principle should not be taken as absolute. The court is not bound to refer every dispute to ADR in accordance with the parties’ agreement. The court recently exercised its discretion and refused to stay proceedings in favour of the parties’ chosen procedure (expert determination),
