ADR - now an integral part of the dispute resolution process
In January 2021 the Master of the Rolls, Sir Geoffrey Vos, chair of the Civil Justice Council and Head of Civil Justice asked the Civil Justice Council (the CJC) to report on the legality and desirability of compulsory alternative dispute resolution (ADR). The CJC report was published on 12 July 2021. It provides much food for thought for mediators, lawyers and parties alike and it could pave the way for a fundamental shift in the dispute resolution process.
The report concludes that to compel parties to participate in ADR does not violate Article 6 of the Convention on Human Rights – the right to access to justice - provided that there is no obligation on the parties to settle and they remain free to choose between settlement and continuing the litigation.
On the desirability question the report identifies a number of conditions subject to which compulsion to participate in ADR could be a desirable and effective development. In designing a suitable scheme, the following factors will need to be considered:
· The cost and time burden on the parties. Litigants should not be required to engage in ADR which is a disproportionate burden on their time or resources. An online process that prompts parties at an appropriate stage or stages to consider settlement and/or making an offer could help to reduce time and cost. Existing compulsory procedures in the family and employment arenas are free to the parties save for the cost of their own time and legal representation. However, privately provided mediation services come at a price. Unless they are publicly funded the fees may represent a disproportionate cost in many low value cases. The continuing development of fixed cost mediation schemes for use in low value claims could be a solution.
· Whether the process is particularly suitable in certain specialist areas of civil justice. In some kinds of cases the value of a neutral third party may lie in their impartiality and ability to manage emotionally charged situations eg in family, employment and boundary disputes.
· The importance of confidence in the ADR provider (and the role of regulation where the provider is private). Where the neutral or ADR process is court sponsored it is easier to justify compulsion. However, mediation in civil disputes has, historically, been less regulated. The Civil Mediation Council has taken steps to establish a scheme of regulation which allows mediators to demonstrate their professional status and it operates a complaint system. The report recommends that if mediation is to be compulsory more systematic regulation is required.
· Whether the parties engaged in the ADR need access to legal advice and whether they have it. Where parties are unrepresented in low value cases there are concerns that ADR will leave them without any legal input to assist in assessing the position or concluding a valid settlement agreement. The ADR pilot scheme to address the backlog of possession cases launched in February 2021 revealed that because no legal advice is available during the mediation duty solicitors were reluctant to advise clients to mediate under the scheme and litigants-in-person were very reluctant to take part.
· The stage of proceedings at which ADR may be required. It is essential to protect vulnerable parties and there might be some value in requiring parties to engage in a form of ADR before embarking on litigation – the CPR protocols already require litigation to be a last resort. The CJC consider that in all but the most complex cases there is much to be said for Early Neutral Evaluation - hearings where a neutral individual with relevant expertise, usually a judge, expresses a view about a dispute or certain elements of it - combined with a requirement to participate in ADR at an appropriate stage.
· Whether the terms of the obligation to participate are sufficiently clear to the parties to encourage compliance and permit enforcement. Clarity as to what does and does not constitute compliance with a duty to participate is essential. This may vary depending on the type of ADR being considered. Thought will also need to be given to appropriate levels of sanction for non-compliance with strike-out being the most obvious.
The report confirms that the existing “nudges and prompts” leading the parties to ADR still have a significant role to play as do the cost sanctions against those who unreasonably refuse to participate. However, it also identifies a need for significant public legal education about ADR, for a proper online resource to be available to the public detailing the various forms of ADR and the ways of accessing them as well as the provision and delivery of appropriate, proportionate and trustworthy ADR services.
The report concludes with 3 observations on areas where it is considered to be unlikely that compulsion will be controversial:
1. Where participation in ADR involves no expense of time and money by the parties – as with answering questions in an online process as to willingness to compromise – as long as the ADR is otherwise useful and potentially productive.
2. Judicial involvement in existing compulsory processes – Early Neutral Evaluation, Financial Dispute hearings in family matters and small claims Dispute Resolution Hearings where the parties are required to attend for the purposes of settlement - is proving highly effective and could be extended to other cases.
3. As mediation becomes better regulated, more familiar and continues to be available in shorter, cheaper formats, compulsion could be considered in this context, also.
Sir Geoffrey Vos, responding to the publication of the report 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”. This report opens the door to a significant shift towards earlier resolution”.
The report lays the groundwork for significant change and in view of the words of the Master of the Rolls the direction of future travel is clear.
For mediators the implications of the report cannot be underestimated. However, there is much work to be done. The industry requires systemic regulation and streamlining of processes to engender the confidence required of ADR providers as well as a programme of public legal education about the various forms of ADR and how to access them. The sooner the industry grapples with these issues the sooner ADR is likely to become fully integrated into the mainstream legal process. Cost is also an issue both for mediators and the court system. When parties pay significant court fees, based on the value of a claim, to pursue it to trial it seems only logical that they should pay an appropriate fee to participate in mediation to seek to settle the claim and so avoid such an outcome: the development of fixed costs schemes as well as flexibility in process and format could be the way forward.
The Civil Justice Council is currently reviewing pre-action protocols and changes have already been made. From May 2021 claimants in personal injury claims arising from road traffic accidents of less than £5,000 must follow a new pre-action protocol – through an on-line portal – which makes clear that parties are expected to attempt to settle the claim and failure to follow the Protocol will result in costs sanctions. It will be interesting to see what changes the CJC propose to the pre-action protocols generally and how it intends to take forward the recommendations in the report.