Dispute resolution in 2022: an increased role for ADR?
As we near the end of 2021, legal practitioners (particularly litigators) and clients alike will mull on the changes to litigation brought on by the pandemic, including the switch to conducting trials and interim hearings remotely.
As we look forwards to 2022, we take a look at further potential reforms in litigation, specifically concerning the role of Alternative Dispute Resolution (ADR).
Alternative Dispute Resolution
ADR is an umbrella term and has been defined as a term used to cover the full range of alternatives to litigation potentially available to resolve a civil dispute[1]. Litigation involves the court coming to a binding decision on parties to a dispute. ADR, being the alternatives to litigation, can be grouped into processes involving third – party intervention which result in either a binding or non-binding determination on the dispute.
| ADR resulting in a non-binding decision on the parties | ADR resulting in a binding decision on the parties |
|---|---|
| Mediation | Expert Determination |
| Early Neutral Evaluation/Expert Appraisal/Expert Evaluation/Conciliation | Arbitration |
A discussion of the full range of available types of ADR listed above is beyond the scope of this article. The key point is that, whilst ADR has been defined as being options alternative to litigation i.e. an alternative to the Court imposing a binding decision, ADR interacts with litigation. Practitioners and clients will be aware of the references to ADR in the Civil Procedure Rules 1998 (CPR), be it the expectation to consider ADR as part of engaging in a particular pre-action protocol or the pervasive “overriding objective” of the CPR to deal with cases justly and at proportionate cost, which commentators and judges consider to support the use of ADR.
Encouragement or compulsion
One of the current hot topics in litigation is whether ADR will become a compulsory step which a party to a dispute must engage in to resolve its dispute.
The approach up until recently has been informed by the Court of Appeal decision in Halsey -v- NHS Trust [2004]. Halsey considered the role of mediation, and whether parties to a dispute could be compelled to mediate. In Halsey, Lord Dyson considered two key questions, finding:
- 1. That it was not legally compatible with a party’s Article 6 Right to a fair trial, per the European Convention on Human Rights to compel a party to participate in ADR (“the legal question”). Lord Dyson deemed it incompatible with Article 6 as a party should have the right to have its dispute heard by a court, rather than be compelled to have its dispute dealt with by ADR.
- 2. In any event, even if it was legal, Lord Dyson expressed doubts whether compulsory ADR was desirable in any case, stating that “the Court’s role is to encourage, not compel” (“the desirability question”.
Broadly speaking, the position building on Halsey has been that, parties can be penalised in costs for “unreasonably” failing to engage in ADR, but cannot be compelled to engage in ADR. However, that position has been evolving and may be about to further change.
A sea change? The Asplin Report
In June 2021, the Civil Justice Council, led by Lady Justice Asplin, reported on the topic of compulsory ADR in order to inform possible future reform in this area (the Report).
The Report, in essence comes to the opposite conclusion of Lord Dyson in Halsey, finding that:
- 1. Regarding the legality question, parties can lawfully be compelled to participate in ADR with reference to Human Rights Law.
- 2.Regarding the desirability question, “compulsion to participate in ADR could be a desirable and effective development”.
Whilst the Report as a whole is too detailed to distil into this article, critically, the findings do appear to point to a sea change from Halsey. The key guidance of Halsey, ruling out mediation being made mandatory, could be back on the table.
Practical implications
Clearly it is still early days for the sea change of compulsory ADR/mediation. Whilst the Report may have answered the legality and desirability questions, the practicality questions will remain at large, likely only being resolved by trial and error. For example, the success of ADR generally has been attributed to its “without prejudice” nature, meaning that the parties to a dispute can discuss issues candidly at a mediation for example without the threat of saying something which may count against them in court. This is the effect of the without prejudice privilege. A key question is how will compulsory ADR be enforced? If, for example, parties to a mediation can adduce evidence that the other party did not participate “reasonably” or to some required standard in a mediation, this would erode the without prejudice privilege which traditionally protects ADR and is likely a factor in facilitating settlement.
In conclusion, the Report has certainly signposted that change may be on its way. How this change may come about is the subject of debate. Some commentators believe a new Practice Direction/pilot scheme within the CPR could be produced to address these issues. It is also possible that the higher courts could overturn Halsey, providing new guidance in line with the Report.
Blake Morgan provide expert advice in all forms of ADR. Please contact our commercial litigation team for any further information or queries.
Footnote
[1] Jackson ADR Handbook
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