A step towards mandatory Alternative Dispute Resolution?

Alternative Dispute Resolution (“ADR”) has been a consensual process since the 1998 Civil Procedure Rules gave ADR much greater importance.   ADR is a means of attempting to settle a claim without the need for a matter to proceed to trial.

ADR is designed to: (1) try and keep cases out of court; (2) to try and speed up the process; and (3) to reduce costs. Whilst at present neither a party nor a court can impose an ADR process, it is positively encouraged.

The most common forms of ADR are negotiation, mediation and arbitration.  Whilst ADR is not compulsory, the court has the power to make a costs order against parties when it thinks that they have unreasonably refused to engage in ADR.

Recently, the Civil Justice Council have published a report exploring the possibility of making ADR compulsory. The report is intended to inform possible future reform and development in this area, but no specific reforms have been proposed at this time.

The report considers two key questions of legality and desirability in the context of Halsey v Milton Keynes [2004] 1 WLR 3002:

1. Is it legal to compel parties to participate in ADR? Previous case law and commentary was unclear as to whether mandatory ADR infringes the right to a fair trial under Article 6 of the European Convention on Human Rights. However, the recent report concludes that mandatory ADR is compatible with Article 6 and is, therefore, lawful subject to appropriate safeguards in place. The report also considers the sanctions on a party for failing to participate in mandatory ADR. In principle, the sanctions could include permitting the court to discontinue proceedings, making commencement condition on entering ADR or permitting strike out applications where ADR has been ordered and not compelled with.
2. In what circumstances is compelled ADR desirable? The report concludes that compulsory ADR could be desirable and effective for the right types of claim, provided the parties always have access to the adjudicative process. It confirms that we “are capable of overcoming the objections voiced in the case law and elsewhere and could be introduced”. It is also supportive of judge-led ADR.

The report is a starting point and more consultation is inevitable, but it certainly echoes views already expressed by the Master of the Rolls, Sir Geoffrey Vos that “ADR should not be considered an ‘alternative’ but an integral part of the dispute resolution process”. Whilst we do not expect compulsory ADR to be introduced within the near future, we do expect in the medium term detail of what types and value of claims it will apply to.

If you would like advice about a dispute, please get in touch and contact our dispute resolution team. To speak to a member of the team and discuss your options and potential liabilities, call 01202 525333 or send an email.