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The first step to compulsory alternative dispute resolution for civil litigants? The first step to compulsory alternative dispute resolution for civil litigants?

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Aug 19

The first step to compulsory alternative dispute resolution for civil litigants?

Written by Jonathan Mortimer
Consultant Partner

DDI: 01423 726608
M: 07850 993952
E: jonathan.mortimer@raworths.co.uk

On 6 August 2019 the Court of Appeal overturned an earlier decision in the High Court to rule that the Court can force a party to take part in a form of alternative dispute resolution (ADR) before being able to proceed with a trial.

Raworths acted for the Defendant in high profile Inheritance (Provision for Family and Dependants) Act 1975 proceedings in which the issue was raised.

The issue which arose

A request was made by one party to the litigation to the other to take part in what is called an Early Neutral Evaluation (ENE). This is where the Court is asked to allocate a special hearing with a judge who is independent of the matter to take an overview of the case and give a provisional view as to the merits of each party’s case. The idea is that the parties will be helped by hearing a judge’s provisional view for the purposes of reaching a negotiated settlement.  The views expressed by the judge are not binding on the parties and, most importantly, are not binding on the judge who ultimately decides the outcome if a settlement remains elusive.  Such hearings are a relatively new innovation and have been thin on the ground so far.

In our case, only one of the parties wished to take part in the ENE. The issue was canvassed before the Honourable Mrs Justice Parker and she provided a judgment on 20 May 2019 indicating that she did not believe that the court had the power to compel all parties to attend an ENE.  The judgment was appealed.

The Appellant argued that there was sufficient power set out in the Civil Procedure Rules at 3.1 (2) (m) being a list of the court’s general powers of managing cases and that it was, in effect, not unreasonable in accordance with the fair disposal of cases to force a party to take part in an ENE.

The Responding Party to the Appeal argued that an ENE is a form of ADR and the approach of the courts previously has been to avoid obliging parties to engage in any form of ADR particularly when ADR can involve the parties in additional costs and delay. Further, that all the relevant provisions of the Civil Procedure Rules suggest that taking part in an ENE must be a consensual decision.  Finally, it was noted that the Chancery Guide, the Technology and Construction Court Guide and the Commercial Court Guide all assume that taking part must be agreed.

What the Court of Appeal decided

The Court of Appeal nevertheless overturned the original decision and perhaps to the surprise of many practitioners and the authors of the court guides, the court ruled that the Court can impose an ENE on the parties.

The appeal judges indicated that they saw an ENE as akin to a Financial Dispute Resolution hearing (FDR) in family cases which had been very successful and the parties were required to attend those hearings. Further, that although such hearings would incur additional legal costs and delay, they can help with the fair resolution of cases and cannot amount to an obstruction to justice.

Conclusions as to a possible new approach by the courts

Previously, the Courts have only gone as far as encouraging parties to take part in a form of ADR by staying proceedings for a period of time expecting parties to use the time to negotiate, to require parties to provide a written explanation as to why they will not take part in ADR and further to hang over the heads of reluctant parties the possibility of an adverse costs order.

In our view, ENE is regarded as a form of ADR by legal practitioners. As such, this appears to be a first step by the courts to impose a form of ADR on the parties.  The question is whether this trend may continue and in future parties to litigation may be required to enter into a form of ADR before they can issue legal proceedings.  Further, many judges may have also previously assumed that there needs to be an agreement to proceed with an ENE such that more orders will be made in the future on the court’s own initiative for an ENE to take place.

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