The importance of Alternative Dispute Resolution – Conway v Conway & Anor 2024
The recent ex tempore judgment of His Honour Judge Mithani KC in Conway v Conway & Anor [2024] EW Misc 19 (CC), serves as a timely reminder of the importance of parties engaging in alternative dispute resolution (“ADR”) prior to proceeding to a potentially protracted trial.
A recap on ADR
ADR is a platform for opposing parties to settle a dispute outside of Court, usually with the assistance of an external independent third party. The benefits of ADR are predominantly centred around the reduction of trial costs, a lesser burden on court time and a more amenable way for parties to resolve a dispute whilst maintaining any pre-existing relationship.
Parties are encouraged to engage in ADR under the Civil Procedure Rules, and the overriding objective to enable the Court to deal with cases justly and at proportionate cost.
The Claimant’s offers of mediation
Mediation is just one of the many forms of ADR. In this case the Claimant made a total of three offers of mediation to the Defendants.
This included a pre-action mediation offer made by the Claimant’s solicitor prior to the issue of proceedings, which the Defendants did not acknowledge. A further offer of mediation, which the Defendants rejected on the basis that mediation was not suitable and that to engage in mediation would increase costs and delay any such outcome which nonetheless would not be enforceable. A final offer of mediation by the Claimant after the first day of the trial was met by a response that the suggestion was “absurd” and an eight-day trial ensued.
Judge Mithani KC’s remarks
The facts of the specific property dispute are outside the scope of this article, save to say that Judge Mithani KC found in the Defendants’ favour and dismissed the claim.
In the concluding segment of his judgment, Judge Mithani KC commented:
“One matter that seriously concerns me is why the Defendants did not agree to mediation when it was put to them. The importance of mediation can never be over-emphasised…The Defendants will have to advance compelling reasons why the offer of mediation was rejected out of hand by them.”
Despite being the successful party at trial, Judge Mithani KC subsequently applied a 25% reduction to the Defendants’ recoverable costs as a penalty for their unreasonable failure to engage in the Claimant’s numerous offers of mediation. It was noted that the Defendants were misguided to reject the earlier mediation offer outright, as they could not be completely confident of their prospects at trial and therefore should not have dismissed the potential benefits which mediation brings. Albeit the Claimant’s suggestion that the reduction to the Defendants’ costs should be 100% was deemed excessive by Judge Mithani KC.
The continued importance of ADR
This judgment is indicative of the approach being taken by the Judiciary to the growing importance of active participation in alternative dispute resolution and the possible implications of failure to proactively attempt to settle outside of Court.
Judge Mithani KC referred to Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 in his judgment which, contrary to the previous position, found that the Judiciary can stay proceedings to compel parties to explore alternative methods of dispute resolution before progressing with litigation, subject to important caveats. The Court of Appeal, therefore, recognised that a blanket application of mandatory ADR is not desirable as it will not always be proportionate to the legitimate aim, but perhaps paved the way for judgments like that of Judge Mithani KC.
These collective judgments illustrate that the ADR landscape is ever evolving, and it remains to be seen how the future Judiciary will utilise their discretionary application of ADR and penal costs.
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