REUTERS | Toby Melville

Alternative dispute resolution reform: one size does not fit all

In 2016, the Civil Justice Council (CJC) established an Alternative Dispute Resolution (ADR) Working Group, whose broad mandate is “to maintain the search for the right relationship between civil justice and ADR” and to promote debate over possible changes.

Its mission is driven by the view that more than 20 years of attempts to make ADR culturally “normal” and fully integral to the civil justice system have not been successful and that its use remains patchy across the system.

The working group released an interim report in October last year, putting forward various recommendations to encourage the more effective use of ADR and proposing questions for further debate. A written consultation process ran up to December 2017 and a workshop discussion was subsequently held on 6 March 2018.

Horses for courses

The working group’s review is very wide ranging in the issues it is considering. It spans the use of court protocols, rules and powers (both before and during proceedings), improving the offerings provided by ADR providers, legal professional training and public legal education. The breadth and depth of the review is to be supported and welcomed.

However, more than any one particular issue being considered, perhaps the most striking takeaway from the consultation responses and the discussions to date has been the reinforcement that, when it comes to considering what further encouragement of ADR is needed and appropriate, it is very much a case of “horses for courses”, by reference to the particular sector or category of dispute being considered.

Until one sits down to discuss such issues with other stakeholders from across the full spectrum of the civil disputes landscape, it is easy to forget just how varied that landscape is. The lively discussion at the workshop highlighted that divergent views as to whether particular proposed measures were achievable or even desirable were clearly a reflection of the wide variety of disputes and courts in which participants were involved, each with their own particular features. What might be perceived as an obvious solution in a certain category of disputes may be, at best, ineffective or, at worst, detrimental in another category.

A key relevant factor which differs across the spectrum of civil disputes is obviously whether the parties and their advisers tend to be regular, sophisticated users of the court system (and therefore familiar with at least the concept of ADR) or those who have little or no prior experience of it. However, a range of other factors can be relevant to whether a particular measure to encourage ADR will be suitable, including features that will influence both:

  • At what stage of proceedings the parties can be expected to have sufficient detail of the issues to allow them to mediate sensibly.
  • Where in the proceedings costs typically begin escalating.

Those factors might include how complex the factual and legal issues typically are; how dependent those issues are on lay or expert evidence; how document-heavy cases tend to be; how often cases involve litigants in person or vulnerable parties; and what proportion of time and costs are spent on liability versus quantum issues.

The author’s perspective is from the end of the spectrum dealing with larger, complex claims, including in the Business and Property Courts (B&PCs). Briggs LJ (as he then was) concluded in his final report in the Civil Court Structure Review that the extent to which mediation has reached a satisfactory steady state in the civil justice system is “at best, patchy”. However, he observed that the deficiency appeared to be primarily in cases in the mid-range of claim values and observed that the position in higher value cases was more satisfactory. The responses to the recent consultation and the participation at the workshop would seem to support that assessment: ADR (primarily in the form of mediation) at the higher value end of the spectrum is generally regarded as adequate in terms of its availability and frequency of use.

To the extent that concerns are expressed about the use of ADR by those practising in this area, they tend to relate more to logistical aspects of how and when mediation is conducted (such as the limited pool of suitably experienced mediators and issues regarding the scheduling of ADR within court timetables), rather than underuse of mediation per se. Certainly, disagreements between parties regarding mediation in such cases are usually less likely to be as to whether the matter should be mediated and more likely as to the most appropriate timing of mediation, or what information/preparation will be required. Or, in some larger or more complex cases, as to whether a second mediation would be worthwhile.

Accordingly, many of the concerns expressed in the working group’s interim report as to the underuse of ADR are not necessarily applicable to this area of the disputes landscape and many of the suggested corrective measures are not warranted (particularly suggested options involving compelling parties to engage with an ADR process to some extent, or creating a presumption in favour of mediation at particular stages. The issue of whether there is a role for some such measures in other specific dispute types or tribunals is beyond the scope of this blog post).

However, it is worthwhile highlighting one of the interim report’s proposals that seems to have attracted surprisingly little attention but could have a substantial impact on civil case management if implemented across the board. That is a suggested change regarding the court’s power to impose costs sanctions for unreasonable conduct in respect of ADR (most often an unreasonable refusal to mediate).

“Mid-stream” costs sanctions?

The court’s existing power to impose costs sanctions at the conclusion of the case is an important tool in the encouragement of ADR.

However, the interim report raises the question of whether the fact that such reviews are conducted only at the end of the case limits the usefulness of this tool, and whether the reasonableness of a party’s decision regarding ADR should be open to being reviewed and judged at the time it is made. That is, it proposes that it should be possible for case management judges to critically assess a party’s ADR stance and impose sanctions “midstream” (or at least to be able to judge the issue and “put down a marker” for the judge deciding costs at the end of the proceedings).

The rationale behind the suggestion is understandable and is, at first glance, intuitively attractive. The time at which the parties make their decisions regarding ADR is during the preparation of the proceedings, and the court’s assessment of the reasonableness of those decisions should be by reference to the circumstances and facts available at the time the decision was made. Given that, there is logic in the suggestion that the court should make its assessment at that time, rather than potentially years down the track when the case may look very different and when, even with the best intentions to put itself in the shoes of the parties at the earlier date, the court may be influenced by hindsight.

However, while a contemporaneous judgment of the parties’ ADR stances might appear to be superficially attractive, there are a number of reasons why that approach may not be achievable without a substantial downside that outweighs the benefit.

First, several consultation responses and workshop participants highlighted concerns as to the practical capacity of the courts to deal substantively with disputes over ADR during the case management process. The courts and parties are already frequently hard pressed within the limited timeframes of case management conferences to deal properly with all the various issues requiring the court’s attention, often including time-consuming issues involved in the disclosure process.

If that was the only concern, and the will was there, such resourcing obstacles could no doubt be overcome. However, there are arguably more substantive objections to the concept of midstream judgments of the parties’ ADR engagement. The working party’s interim report notes that:

“Just as the parties and their solicitors are able to make objectively reasonable decisions about ADR during the proceedings so a court should be able to decide whether they have in fact done so.”

However, the difficulty is that the court is very unlikely to be able to put itself properly in the parties’ shoes at that time, because it will not have the degree of visibility that the parties have due to privilege / without prejudice constraints. Particularly in large, complex cases, there will usually be many contingencies, factors and underlying interests that will feed into the decision as to whether and when a case can best be mediated. Fully explaining those factors will often require reference to what has passed between the parties in without prejudice discussions or correspondence, particularly when the court considers (under the Halsey guidelines) whether a mediation would be futile, either because of bad faith by the opposing party or an intractable obstacle to negotiation.

Parties could easily find themselves in the invidious position of having to choose whether to waive those protections pre-trial or allow the court to proceed to assess the reasonableness of their conduct (and potentially order or recommend costs sanctions) on the basis of incomplete information. In either case, the position would be even more problematic if, as in many cases in the B&PCs’ specialist lists, the judge making the assessment was the docketed trial judge.

The courts have rightly recognised the need to be very cautious about enquiring into the substance of the mediation and its surrounding without prejudice negotiations. That stance should be maintained. It is not incompatible with robust challenge from judges in the course of case management about the timing of ADR processes and the practical matters that enable an effective mediation to take place.

Further, if a court was to critically assess a party’s refusal to mediate at a particular stage and judge this as unreasonable (whether ordering a sanction at that time or putting down a “marker” for later), one might ask, “What then?” The party would be in the somewhat strange position of having been sanctioned by the court for failing to take certain action in circumstances where it still could, if it wished, take that action (with the only reason that it has not been ordered to do so being that the court does not have the power to make the order). If the party felt that there were strong reasons why a mediation was not appropriate (or not appropriate at that time) and maintained its stance, this could be perceived as tantamount to it defying the court. Again, this would be particularly problematic if the judge in question was to be the trial judge. Some might suggest that the situation would, if not in name, feel to the party in question rather indistinguishable from being compelled to mediate.

While the above concerns would not be exclusive to larger, more complex cases, they would potentially be more acute in such cases given the complexity of factors that inform the decision of when to mediate.

The mantra of “one size does not fit all” is a frequently used introductory remark in discussions and reviews about ADR. However, that is not always fully reflected in the substance of conclusions and recommendations applying “across the board” (perhaps unsurprisingly given the complexities arising from the broad range of dispute types). It is therefore to be hoped that the working group’s conclusions will acknowledge this complexity and ensure that any final recommendations in respect of court rules and procedures with respect to ADR are tailored and limited to the specific courts or dispute types for which the change is needed and practicable.

Herbert Smith Freehills Jan O’Neill

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