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Will (Alternative) Dispute Resolution become mandatory?

Jul 19th, 2021

Richard Tomlinson, Partner

It has long been the case that the civil litigation process is time consuming, costly and stressful. Over the years there have been various reforms to try to speed it up and reduce or manage costs. We have also seen the growth of Alternative Dispute Resolution (“ADR”).

What is Alternative Dispute Resolution (ADR)?

ADR refers to a variety of other means by which a civil dispute can be resolved. It can be pursued before Court proceedings have been issued or alongside them. ADR includes mediation, negotiation, arbitration, expert determination and early neutral evaluation. One of the most popular forms of ADR is mediation, where a third-party mediator is appointed to seek to bridge the gap between the parties and to help facilitate a compromise.

The Courts have for a long time now sought to encourage parties to use ADR. The Civil Procedure Rules (which govern civil litigation) require parties to consider the use of ADR in every case. Proceedings are often stayed (or paused) for a period of time to allow parties to engage in ADR. Further, if a party unreasonably refuses to mediate, they can face being penalised in relation to the recoverability of costs in the litigation.

Alternative Dispute Resolution has until now always been voluntary

There has, however, always been the view that ADR is ultimately voluntary and cannot be imposed upon a party. In the case of Halsey v Milton Keynes General NHS Trust [2004], the Court of Appeal stated that “The hallmark of ADR procedures… is that they are processes voluntarily entered into by the parties in dispute with outcomes, if the parties so wish, which are non-binding”.

Change may be on the way?

However, it seems like there is going to be a substantial change in the attitude and approach of the Courts to the use of ADR. The Civil Justice Council has just announced that the mandatory use of ADR is lawful. The Master of the Rolls, Sir Geoffrey Vos, has responded to this finding by stating that “ADR should no longer be viewed as “alternative” but as an integral part of the dispute resolution process”.

It is therefore anticipated that in the near future parties could be told that they must engage in ADR before being allowed to pursue Court proceedings through to a trial.

Four issues that need to be considered

This seems like a welcome and logical next step to be taken in relation to civil justice. ADR use has grown in recent years and, in our experience, can be very successful in resolving a dispute without the need for lengthy and costly Court proceedings. There are, however, a number of issues that would need to be considered before mandatory ADR could be introduced, for example:

  • At what stage would ADR become mandatory? If it is pursued too early in a dispute, it may fail as the parties do not have enough information to form a view on a dispute. If it is pursued too late in a dispute, the legal costs incurred by the parties might prove to be a barrier to settlement.
  • What would the sanction be for non-compliance? Would a party have their entire claim / defence struck out for refusing to engage in ADR?
  • How would compliance be policed? What if a party agrees to ADR, but fails to properly engage in the process (for example, it attends a mediation but leaves after 30 minutes)?
  • Will the Courts encourage a specific form of ADR – rather than ADR becoming mandatory, will it in fact be mediation that becomes mandatory?

Often, a mediation becomes a commercial negotiation driven by money and finding a middle ground between the parties.

Whilst ADR can be very successful, the biggest barrier to greater success is, in my view, down to the nature of the process itself. In mediation, for example, a mediator’s role is not to pass judgment on a case. They might ask probing questions of the parties, but they will not form a view on the merits of a case. Often, a mediation becomes a commercial negotiation driven by money and finding a middle ground between the parties. This works in many cases. However, it often fails where there are clear legal disputes between the parties, or the parties have diametrically opposed views of the case.

Two ways ADR can be made more successful for everyone

  • To make ADR more successful, it would be great to see those facilitating ADR (such as mediators) take a more active role in helping the parties understand what might happen if the case proceeded to trial.
  • And given the Court plays an active role in managing litigation and each case will have a Case Management Conference in front of a Judge at an early stage, perhaps greater effort needs to be put into identifying the key issues in a case at this stage and seeking to deal with some at a preliminary stage to allow the parties to narrow the issues in dispute between them before engaging in ADR.

If mandatory ADR is introduced, it should be welcomed and embraced. At Langleys we understand that the focus in any litigation should be on trying to achieve a resolution. That is not, of course, to say that all litigation can and should be resolved through ADR. There will still be cases that simply cannot be resolved between the parties, but those parties will at least be able to approach a trial knowing that they did all they could to resolve the matter.

For more information about ADR or litigation, please do not hesitate to contact us.

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