26/02/2019

In November 2018 the Civil Justice Council Working Group on alternative dispute resolution (ADR) published their final report addressing the following 3 questions:

  1. The awareness of ADR, not only with the general public but also legal practitioners;
  2. The availability of ADR, both in terms of funding and logistics; and
  3. The encouragement of ADR – including the thorny question of whether mediation should be compulsory.

The report’s 24 recommendations include the following:

Awareness

  • Promoting ADR, ideally as part of a wider campaign of public legal education. According to the report, a survey of Court users’ found that a high number of litigants did not know about ADR, despite 68% having said they would have preferred to avoid court proceedings.

Availability  

  • Alternative and cheaper mediation models, such as 3 hour telephone mediations, should be promoted and accredited. It was noted in this regard that, although there is a one hour free telephone mediation available for small claims, there are a lack of options for claims in the next bracket up, where the costs of the mediator and the venue may make it an unattractive option.

Encouragement 

  • The claim form should include a statement from the Claimant that the Claimant has not only contacted the Defendant but understands that litigation should be a last resort and is fully aware of the alternatives to litigation;
  • The directions questionnaire, which currently asks parties not seeking a stay for ADR to explain their decision, should make it clear that only certain specific reasons will be acceptable;
  • A review of the Halsey v Milton Keynes General NHS Trust guidelines, which the report states “effectively forms a list of permissible opt-outs [from ADR]”. In Halsey, it was found that a court should impose a costs sanction against a successful litigant on the grounds that they have unreasonably refused to take part in ADR. However, the Court in that case also identified a non-exhaustive list of considerations when determining this issue, including the merits of the case; the cost of mediation; delay; and prospects of success. Pursuant to Halsey the burden of proof is on the unsuccessful party to show that the winning party was unreasonable. The report describes these guideline as being “too generous to the refusing party”;
  • The possible implementation of a Notice to Mediate system similar to that operated in British Columbia. This system works by one party delivering a formal Notice to Mediate to all other parties, after which they must jointly agree on a mediator within 14 days after delivery of the notice (or 21 days if there are 5 or more parties). In the absence of such an agreement, a mediator will be automatically appointed. Mediation must then occur within 60 days of the appointment.

The report stated that it did not consider compulsory mediation to be appropriate and noted that a judge-ordered mediation would risk wasting time and costs if it did not take place at the optimal time for the parties.    

What is currently not clear from the report is the consequences if a party rejected or refused to accept the Notice to Mediate. The sanctions mentioned by the report included striking out the defaulting party, however this is arguably tantamount to making mediation compulsory (albeit without the need for an expensive and time-consuming Court application). Such an approach would be unpopular given the current costs of mediation unless a more cost-effective approach could be found, and the risk in that scenario would be that the parties were simply engaging in an exercise of “ticking the box” rather than a genuinely consensual approach.

Another possible sanction mentioned was costs orders. However, as the Court already has the power to make adverse costs orders arising from an offer of mediation which was unreasonably refused, it is not clear how the Notice would distinguish itself from the current state of play.

Conclusion

There is clearly still more to be done to encourage the use of ADR, which can be extremely successful as an alternative to litigation. The CEDR Mediation Audit 2018, for example, noted that the success rate of mediation remains high, with an aggregate settlement rate of 89%.

Mediations can be successful even when one party is initially reluctant. The advantages of the process include that the parties both feel that they have had their “day in Court”. Its ultimate success, however, is reliant on a number of factors, including the willingness of the parties to genuinely compromise and the issues at stake. The view remains in this jurisdiction that the process will be most valuable when it remains consensual.