In Lomax v Lomax, the Court of Appeal had to decide the effect of CPR 3.1(2)(m), which refers to the court’s powers as including “…hearing an Early Neutral Evaluation…”.
Rule 3.1 contains the court’s “general powers of management” and sets out a “list of powers” which are in addition to any other powers the court may have.
The list, in subparagraph (2), includes at (m) that the court may:
“…take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case…”
The question for the Court of Appeal to decide was: does CPR 3.1(2)(m) provide that the court can only order an early neutral evaluation (“ENE”) hearing if all the parties agree? Or does it mean that the court can order that such a hearing takes place whether or not the parties agree?
The main action was an Inheritance Act 1975 claim brought by a widow. By an order dated 20 May 2019, Parker J declined to order an ENE hearing on the grounds that the court did not have the power to do so when, as in this case, one party refused to consent to such a hearing.
It was the defendant (the respondent in the appeal) who opposed an ENE hearing. The claimant (the appellant) sought an ENE hearing and submitted that Parker J was entitled to order and should have indeed ordered an ENE hearing to take place, despite the defendant’s opposition.
The appellant also argued that Parker J’s judgment clearly indicated that if she had concluded that she had the power to order an ENE hearing, she would have done so.
Issues considered and decided by the Court of Appeal
Moylan LJ (giving the lead judgment on behalf of the Court of Appeal) analysed the wording of CPR 3.1(2)(m) and found that it did not contain an express requirement for the parties to consent before an ENE hearing could be ordered. So then the question for the appeal judges to decide was whether such a limitation should be implied.
Moylan LJ suggested that ENE did not prevent the parties from having their disputes determined by the court if settlement did not happen at or after an ENE hearing.
Submissions had been made by counsel for the respondent regarding guidance set out in court guides. Moylan LJ rejected these submissions quite easily , making clear that the CPR and accompanying Practice Directions should not be affected by what might be suggested in any court guides.
Moylan LJ also did not accept the submissions made on behalf of the respondent that the rules supported the conclusion that consent had to be implied. He went on to say that, if that had been the intention, then the rules would have surely expressly provided this. In Moylan LJ’s view, the absence of any such express requirement was a powerful indication that consent was not required.
Moylan LJ extolled the value of a judge providing parties with an early neutral evaluation of their case and suggested that many cases had settled as a result. Moylan LJ paid particular attention to early neutral evaluation in financial remedy cases, but other types of cases too. He referred to a reported boundary dispute case in which the presiding judge made clear that it was no longer sufficient to simply advise parties about mediation and costs consequences if mediation was not tried, and the parties should not be left to their own devices. Moylan LJ concluded that it therefore had to be an exercisable power of the court to order an ENE hearing, whether the parties consented to it or not.
Handing down the leading judgment, Moylan LJ found that ENE required parties to focus on whether a case might be capable of settlement and required them to hear a judge’s neutral evaluation. This was because parties can be, and would typically be, ordered to attend the hearing as permitted by CPR 3.1(2)(c), because one of the key purposes of an ENE hearing is for the parties to hear directly the judge’s evaluation of the case. He went on to find that the result of requiring parties to have an ENE hearing can and often will be to achieve settlement, saving rather than adding to costs.
Moylan LJ went on to find that he could see no reason to imply into CPR 3.1(2)(m) any limitation on the court’s power to order an ENE hearing to the effect that the agreement or consent of the parties is required. Moylan LJ made reference to the overriding objective and that a judge’s power to order an ENE hearing was entirely consistent with the overriding objective.
Allowing the appeal, Moylan LJ referred back to Parker J’s clear view that this case would benefit from an ENE hearing and so he ordered that an ENE hearing be listed as soon as possible.
Practical implications for practitioners
Always consider ENE with your client: there can be no harm in doing so, or in potentially proposing it to your opponent(s), perhaps for costs protection.
Clients should be assured that ENE is designed to help with settlement and can be a cost saving device, but that in default of settlement, the court can and will still make a final determination.
Clients should also be advised that a judge can order ENE even if a party does not agree to it and that the court rules expressly provide for this.