This autumn has heralded 2 major changes in the way that courts approach Alternative Dispute Resolution (“ADR”).
Parties to litigation have long recognised the advantages of Alternative Dispute Resolution, particularly mediation, in resolving their disputes without proceeding to a trial in Court. In a mediation, an independent third party mediator, who is often trained in negotiation and settlement techniques, acts as a go-between to facilitate an agreement, usually as an effective alternative to costly and time-consuming litigation. Although mediation does in itself involve expense, by reaching agreement, the parties can avoid the expense and risk of the court process and obtain a solution more quickly than going through the courts. Agreed outcomes in ADR can include ways forward that cannot be ordered by a court, for example an on-going trading relationship between commercial parties or agreements on boundaries in land disputes. The agreement is often confidential, so avoiding the possibility of publicity that can follow court action.
Amendments to the Civil Procedure Rules (“CPR”) came into force on 1 October 2024 to promote the use of ADR. The CPR are a procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost. That now includes “promoting or using alternative dispute resolution”. The court’s case management powers have been expanded to include ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution. When the court gives directions, the Judge will now consider whether to order or encourage the parties to participate in ADR. The CPR do not specify what type of ADR may be ordered, so it may be that court will consider not only mediation, but other ways of resolving disputes, including public authority complaints procedures, Ombudsmen, and Early Neutral Evaluation.
Orders are often made requiring a party who does not engage in ADR to explain their reasoning. If a party fails to comply with an order for ADR, or unreasonably fails to engage in ADR, then that conduct can be taken into account when the court decides who should pay the costs of the litigation. The court will now also have regard to that conduct when it decides the amount of costs that must be paid.
From 5 November 2024, for new money disputes for under £10,000 and claims filed using Online Civil Money Claims, parties will be required to attend a mediation appointment. A claim for this amount is usually treated as a small claim and small claims mediation has previously been offered on a voluntary basis, provided that both parties agreed to participate. The new compulsory scheme has been operating as a pilot since May 2024 and found to be effective so is now being extended. The mediation will usually be a short, free, telephone appointment lasting an hour.
For more information about ADR and how it could help you, contact our Dispute Resolution team on 01484 821 500 or email disputeresolution@ramsdens.co.uk
The above article is for illustrative purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any part of the information given.