Costs News

15 July 2021
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Compulsory ADR is lawful and should be encouraged, heavyweight report concludes

A Civil Justice Council report said this week that compulsory alternative dispute resolution (ADR) is lawful and should be encouraged.

It said that so long as parties remained free to choose to continue their litigation in the courts, there was no breach of the right to a fair trial set out in article 6 of the European Convention on Human Rights.

The statement marks a significant departure from the Court of Appeal’s 2004 Halsey ruling – which said compulsory mediation was not compatible with article 6 – and its authors said it would be “helpful” if an appellate court and/or Parliament could address the issue afresh “as soon as possible so that procedural reform can proceed with some certainty”.

The report was commissioned by the Master of the Rolls, Sir Geoffrey Vos (pictured), and written by Lady Justice Asplin, the lead judge for ADR, William Wood QC of Brick Court Chambers, Professor Andrew Higgins – associate professor in civil procedure at Oxford University – and Mr Justice Trower.

They continued: “It is, we think, now accepted that the Strasbourg authority cited in Halsey does not mean that compelling parties to engage in ADR will necessarily violate article 6.

“Moreover, there is a tension between treating an order to mediate as a breach of article 6 but then giving the court power when dealing with costs to penalise a party financially for unreasonably failing to mediate.

“That was an approach which Lord Dyson held to be permissible in Halsey, and has been followed in other cases, although in our experience, the use by courts and tribunals of their powers to impose costs sanctions for unreasonable conduct has been mixed.

“However, one might view the distinction between orders for compulsory ADR, which are unlawful under Halsey, and orders which require parties to attempt ADR under threat of costs sanctions, an approach which Lord Dyson held to be permissible, and which was considered permissible in Mann v Mann and Bradley v Heslin, to be a relatively fine one.”

The report said that if ADR was no longer ‘alternative’, then parties could “surely be compelled to participate in ADR as readily as they can be compelled to disclose documents or explain their cases”.

It continued: “The sanction for failure to participate may be to prevent the claim or defence continuing, either by making the commencement of proceedings conditional on entering ADR, or empowering the court to strike out a claim/defence if a party fails to comply with a compulsory ADR order at a later stage in the proceedings.

“Any strike-out could be set aside if there was a valid reason for non-compliance.”

The report did not make detailed proposals for reform but included three “observations” on the form compulsory ADR might take.

“First, where participation in a suitable and effective form of ADR occasions no expense of time or money by the parties, making it compulsory will not usually be controversial.

“Second, we foresee that greater use of compulsory judge-led ADR processes will prove acceptable, given they are free and appear effective in the contexts in which they are already compulsory.

“Third, compulsory mediation may be considered, provided it is sufficiently regulated and made available where appropriate in short, affordable formats.”

The report stressed that the existing “nudges and prompts” in the courts that lead parties towards ADR “still have a significant role to play”, while “outside the court system there is plainly a need for significant public legal education about ADR, however elusive that goal can sometimes seem”.

Lady Justice Asplin said: “Our conclusions place another useful and powerful tool in the box. They also provide the opportunity to initiate a change of culture in relation to dispute resolution which will benefit all concerned.”

Sir Geoffrey said: “As I have said before, 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.”

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