It is increasingly likely that ADR is going to become a compulsory part of the litigation process. What will this involve and will it save businesses money?
In August 2023, the Civil Justice Council (“CJC”) published Part 1 of its Review of Pre-Action Protocols. One of its key proposals was the replacement of the current Practice Direction – Pre-Action Conduct (the process which should be followed by parties prior to proceedings being issued) with a new General Pre-Action Protocol. This would apply to all cases that do not fall within a specific pre-action protocol. The General Pre-Action Protocol would require engagement in an alternative dispute resolution process prior to issuing proceedings, with a default obligation for the parties to hold a confidential pre-action meeting if they cannot agree on an appropriate dispute resolution process.
Whether the General Pre-Action Protocol would apply to high value and/or complex litigation in the Business and Property Courts will remain to be seen. The CJC working group has asked for consultations with litigators and Counsel regarding the need for a specific, more flexible pre-action protocol to apply to such cases. This will be considered in Part 2 of the CJC's review.
There are other moves towards compulsory ADR. The Government has announced the compulsory use of mediation in small claims in the County Court and the judiciary are driving to have ADR incorporated into a digitised court system. In addition, in October 2023, The Law Society of England and Wales published a green paper outlining policy proposals to fix the civil justice system. Albeit the focus was on improving access to justice for small businesses and individuals, one of the key suggestions was a 'one-stop shop' online diagnostic tool which would identify the most appropriate dispute resolution processes for the legal issue faced by the user. Indeed, rather than using the term ADR, the term 'Non-Court Dispute Resolution' or 'NCDR' was used, to "reflect the fact that these methods now form a core component of the justice system and should not be considered 'alternative'". It is estimated that this proposal could result in a £72 million saving for Claimants, Defendants and the Court over five years.
We will see how these developments progress and whether the recommendations will be implemented.
In the meantime, case law is also developing. In November 2023, the Court of Appeal is due to consider the principle established in a previous case that parties could not be compelled to mediate. Although a party to litigation may not be compelled to mediate at the moment, it could still be penalised in costs in the event that it was unsuccessful and an offer to mediate was made but unreasonably refused, so care must be taken.
Our Alternative Dispute Resolution Service
Lewis Silkin has an outstanding team of lawyers specialising in all aspects of commercial disputes, with vast practical experience of modern litigation and ADR, with a number of the team being CEDR accredited mediators. We are now using our expertise to offer ADR services bespoke to these unprecedented times. In particular, we can ensure that parties who are facing early-stage contentious issues receive appropriate help, such as settlement facilitation assistance, early neutral evaluations and mediation. Further details of our LS Resolve service can be accessed here.
The Civil Mediation Council (CMC), the Chartered Institute of Arbitrators (Ciarb) and the Centre for Effective Dispute Resolution (CEDR) have joined forces and have been granted the right to intervene in the case of Churchill v Merthyr Tydfil County Borough Council before the Court of Appeal later in the year. The organisations will provide a written intervention. The aim is to set aside the Halsey judgment on article 6 which has proved to be a thorn in the side of mediation in England and Wales, stopping parties from being referred to mediation in many cases.
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