How “Alternative” Is Alternative Dispute Resolution?

A look into Alternative Dispute Resolution in the face of the Civil Justice Council (CJC) published report titled: Compulsory ADR (June 2021)

What is Alternative Dispute resolution?

Firstly, Alternative Dispute Resolution (“ADR”) refers to the methods available to parties to settle their dispute outside of the courtroom and without progressing all the way to trial or a final hearing. This can be via the various methods of negotiation, conciliation, mediation, and arbitration.

Why consider ADR in litigation?

Whilst at present there is no general rule in law compelling parties to use ADR to resolve their dispute, ADR is usually encouraged to look at other ways the parties can resolve the matter in order to understand each other’s position and come to their own solutions. This is worth considering when litigation can be a lengthily process that can come with the considerable stress and cost implications that often accompany taking a dispute to trial.

It is the parties as well as their representatives’ duties to assist the court in furthering the overriding objective as per 1.3 of the Civil Procedure Rule (“CPR”), which includes dealing with a case justly and at proportionate cost. ADR can assist in achieving this goal by saving expense and ensuring that the matter is dealt with expeditiously and fairly.

Similarly, the Court has a duty to manage cases to further the overriding objective as per CPR 1.4, including encouraging the parties to co-operate with each other and encouraging the parties to use an alternative dispute resolution procedure if considered appropriate.

Therefore, it is in the parties’ interests to consider entering into ADR at some juncture in the proceedings, especially where cost implications are also factored in. In Burchell v Bullard [2005] , the court reprimanded a party for ignoring an offer to mediate made at the pre-action stage of litigation proceedings. It is therefore clear that a failure to engage with the ADR on unreasonable grounds can be considered by the court when determining costs and have a negative impact for the unwilling party in refusing to participate in attempts to settle.

Whilst it is therefore easy to see the benefits of engaging in ADR, even if the matter is not bought to a close, it is encouraged for parties to at least consider the same – but just how necessary is this requirement?

A question that The Civil Justice Council’s report on Compulsory ADR aims to answer.

Enter Compulsory ADR (June 2021)

The report was commissioned by the Master of the Rolls to investigate the legality and desirability of compulsory ADR. The report therefore addresses two questions: can the parties to a civil dispute be legally compelled to participate in ADR? Secondly, if so, in what circumstances should such an order be desirably imposed?

The report considers relevant case law, including Halsey v Milton Keynes General NHS Trust [2004], to find that as long as the prescribed ADR is not disproportionately onerous and does not dismiss the parties’ effective access to the court, it will be compatible with Article 6 of the European Convention on Human Rights: the right to a fair trial.

The Civil Justice Council found that when answering the second question of the circumstances where such an order can be desirably imposed, it is legal to impose ADR should the Court give due consideration to and be satisfied of the following circumstances:

• The cost and time burden on the parties;

• whether the process is particularly suitable in certain specialist areas;

• the importance of confidence in the ADR provider;

• whether the parties engaged in the ADR need access to legal advice;

• the stage(s) of proceedings at which ADR may be required; and

• Whether the terms of the obligation to participate are sufficiently clear to the parties to encourage compliance and permit enforcement.

Giving regard to the above factors, it has been said that “If ADR is no longer “alternative” or external to civil justice, then parties can surely be compelled to participate in ADR as readily as they can be compelled to disclose documents or explain their cases”. Thus meaning that Alternative Dispute Resolution is now another “useful and powerful tool in the box” of the Courts, according to Lady Justice Asplin.

The report concluded that providing “the parties [are] free to return to the court if they wish to seek adjudicative justice then we think that the greater use of compulsion is justified and should be considered”.

The Implication

The CJC’s report has confirmed that, in certain circumstances, a court ordering compulsory ADR is not only lawful and compatible with Article 6, but could also be “an extremely positive development” that would potentially lead to the resolution of disputes earlier in proceedings.

Sir Geoffrey Vos, Master of the Rolls and Chair of the CJC and Head of Civil Justice said:
“ADR should no longer be viewed as ‘alternative’ but as an integral part of the dispute resolution process; that process should focus on ‘resolution’ rather than ‘dispute”

Whilst the form compulsory ADR could take ought to be illuminated further, it seems that as long as the Court Ordered ADR is inexpensive, readily available and not extremely time consuming, Court Ordered ADR should be seen as an uncontroversial, legal, desirable and arguably welcome development to be encouraged.

As to next steps, more work is needed to determine the types of claim and the situations in which compulsory ADR would be appropriate. But for now, it has been said that “a well-functioning civil justice system should offer a choice of dispute
resolution methods, and that adjudication in the courts should always be available;
but that is not incompatible with compulsory ADR.”