By Nicola Coward, Partner and Dispute Resolution Solicitor
Alternative Dispute Resolution (or ‘ADR’) has become part and parcel of litigation. It is defined in the Civil Procedure Rules 1998 as a ‘Collective description of methods of resolving disputes otherwise than through the normal trial process.’ It is no secret that the Court promotes settlement between parties; litigation should be a last resort.
There are many forms of ADR, both formal and informal. Probably the most popular form of ADR is mediation. Here the parties are assisted by an independent party who is not concerned with the merits of the parties’ positions but how the case can be settled. Although its purpose is to resolve a dispute without the significant costs of litigation, mediation can still be an expensive exercise.
Although ADR, including mediation, is not compulsory, the Court does expect the parties to seek to resolve their dispute in a constructive manner before either party resorts to the Court and incurs substantial legal costs.
Lord Justice Dyson said, “It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest possible terms. It is another to order them to do so … to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the Court. [1] For a long time, therefore, the Court, whilst encouraging parties to try to settle their dispute, have not gone so far as to order them to use ADR. If one party refuses to mediate the Court is likely to order them to pay their opponents costs, even if their claim/defence was successful. Such a sanction has been used time and time again, more recently in DSN v Blackpool Football Club [2} where Mr Justice Griffiths ordered the Defendant to pay the Claimant’s costs on the indemnity (or higher) basis and stated that, “No defence, however strong, by itself justifies a failure to engage in any kind of alternative dispute resolution.”
However, on 1 October 2015, the Court rules were amended to refer specifically to Early Neutral Evaluation (‘ENE’) and the power of the Court to order the same where the Judge felt that it would be beneficial to the parties. ENE is a form of ADR but, rather than purely focusing on settlement like mediation, ENE concerns itself with the stance taken by the parties and considers the merits of their respective positions. A Judge at the ENE hearing will provide a provisional, but authoritative, view on the legal issues and the strength of the evidence. Clearly, ENE would be very useful where the parties positions are the polar opposite or where the parties are so entrenched in their positions and are unable to properly consider the prospects of success of their claim/defence.
It was believed that the Court could only order an ENE hearing if both parties to the claim consented, falling in line with previous decisions on ADR. In 2019, the Court of Appeal [3] disagreed and made it clear that, in their view, there was no limitation on the Court’s power to order an ENE hearing where one party did not consent. Lord Justice Moylan said that ENE was a step in the litigation process and did not obstruct a party’s access to Court. Indeed, a party may continue with the litigation after the ENE; they are not bound by the view of the Judge at that hearing.
Guidance on the use of ENE has recently been given in the High Court [4] and it would seem that ENE, as a form of ADR, is gaining traction and it will be interesting to see whether Judges in the County Courts make use of this case management power and order a ENE hearing to take place even where there is little appetite for the same by the parties and/or their legal representatives.
13/11/2020