The Final Report of the ADR working group of the Civil Justice Council is out. Parties will wish to note what it says about the forms of ADR, awareness and unreasonable refusal. Here are some of the highlights.
The business of the working group was ADR and the Report recognises and discusses the different forms. However, parties will be unsurprised to see that the Report says mediation is “plainly the most important” of the ADR techniques and should be further encouraged by the courts. As the Report neatly puts it:
“Mediation is flexible, massively successful and consistently surprises professionals and parties alike in its ability to achieve settlements where the parties appear implacably opposed.”
“I’ll see you in mediation!”
The Report highlights that many still do not know that ADR exists as an option for resolving their dispute. It sees a real need to raise awareness.
Litigants, it says, should be constantly signposted to ADR or, as it puts it, there should be a building in of “more nudges and encouragements towards ADR”. Court documents, rules and guidance (which it recognises already contain significant prompts towards ADR) should be reviewed to ensure there is:
“… effectively a presumption that ADR will be attempted in any case which is not otherwise settled.”
Certification should be required in the claim document that steps have been taken to contact the defendant and discuss the question of the dispute. Assurances, it says, could include that the claimant has not only contacted the defendant to discuss the claim but acknowledges that litigation should only be a last resort and has acquainted itself with the availability of ADR.
More than this, the Report also considers how to make ADR part of everyone’s mind-set, whether they are involved in litigation or not. Within the legal sector, it says, there should be a further and more complete embrace of ADR in law faculties, professional training and disciplinary codes. More generally, it calls for public awareness of ADR via education.
Present encouragement of ADR not enough
A well-known concern parties have is that they will face a costs sanction if they are found to have unreasonably refused to participate in ADR. That principle came from the Court of Appeal’s decision in Halsey and has been applied and developed in many subsequent judgments, including Garritt-Critchley and PGF.
Parties will be interested to see that, although the Report does not recommend blanket compulsion to use ADR, it does conclude that the present sanctions do not go far enough:
“The Rules and the case law have to date been too generous to those who ignore ADR and… under-estimate the potential benefits of ADR.”
Looking forward, it recommends an urgent review of the guidelines in Halsey on the imposition of costs sanctions, which it views as being “too generous to the refusing party”, as well as a narrowing of the circumstances in which a refusal to mediate is regarded as reasonable.
Parties will wish to note that the Report says the following are broadly acceptable opt-outs to ADR:
- There has already been an unsuccessful mediation (or possibly early neutral evaluation (ENE) or some other form of ADR).
- The parties are already committed to an ADR process in the near term.
- The parties (or a party) satisfy the court of a need to wait (often until after disclosure) for any meaningful negotiations to take place, but they will commit to using ADR at that stage if the case has not otherwise settled.
- There has been unreasonable or obsessive conduct by one or other party (of the Hurst v Leeming variety).
- There is a genuine test case in which the court’s judgment on an issue of principle is required.
Parties will also be interested to see that the Report says the following reasons should not be acceptable opt-outs to ADR:
- The case appears complex.
- The case involves serious issues such as fraud.
- The ADR process appears to be unlikely to succeed.
- Given the increasing flexibility of the ADR offering, the cost of ADR is too great.
- That a party believes they have a strong case.
The Report also deals with the timing of costs sanctions and says reserving the question of cost penalties until after judgment should be replaced by “something stronger happening earlier”. There is, the Report says, a need to develop a form of stronger court intervention “for use mid‐stream at the time that the decisions to use or not use ADR are being taken”.
The use of ADR, particularly mediation, can only grow as more and more people come to know about it and understand its benefits. The Report is clear in its message: people must be aware of ADR and the circumstances in which parties can refuse to use it must be narrowed. Perhaps soon, people will be heard to say “I’ll see you in mediation!!”.