In an early Christmas present for mediators, the Civil Justice Council Alternative Dispute Resolution (ADR) Working Group has issued an interim report and consultation on mediation in the court system. They have some ideas for encouraging more widespread mediation uptake. They are inviting responses to their questions from interested parties by 15 December 2017.
Most people would agree that mediation has not made sufficient progress in achieving the aim of becoming the dispute resolution method of choice. As a director of a Civil Mediation Council (CMC) registered mediation provider and board member, CTSI certified ADR body under the ADR Regulations 2015, the co-ordinator of the Manchester Civil Mediation Pilot and as a member of the Court of Appeal Mediation pilot, I concur. Despite the incentives, the positive track record, the comparative expense of litigation and possible penalties for refusing to mediate, it is still not gaining sufficient traction to make any inroads into the ever increasing court workload (the statistics show an increase in cases issued in the last quarter).
The working group analyses the position and suggests ways to increase mediation use at pre-action and post-issue stages. They examine whether there should be more compulsion in the use of mediation. The report finds that the current system of encouraging ADR is not working and that the court should promote the use of ADR more actively at and around the allocation and directions stage, or pre-issue.
The fundamental question is whether it is ever right to force people or businesses to resolve matters rather than having their day in court. In my view, as a mediator, I would obviously say yes, not out of self-interest, but because I have seen the damage that litigation can do and the costs that can be racked up. I have also worked in the court system and can see that some matters would be better dealt with in a more consensual, less confrontational way, such as very small claims. Parties can end up with a county court judgment for over-staying in a car park, affecting their credit rating. At the other end of the spectrum, neighbours at war over a fence or gate can incur so many costs that they have to sell their home to pay. Who actually wants to litigate if it can be avoided? Perhaps HM Court and Tribunals Service (HMCTS) should carry out a customer satisfaction survey of litigants at the end of a trial to find out how the experience has been for them and whether they would prefer to use ADR next time.
Earlier intervention: interim orders v final costs sanctions
The Civil Justice Council (CJC) working group says that the threat of costs sanctions at the end of the case is helpful but that the court should be more interventionist at an earlier stage when the decisions about ADR are actually being taken. They think there should be a presumption that in most cases if parties have not been able to settle a case by the directions stage, they should be required to bring forward proposals for engaging in some form of ADR. This is essentially what is happening with the Manchester Civil Mediation Pilot, where the court is issuing Ungley orders, to persuade parties to consider mediation, but not forcing them to do so. However, to date our experience is that parties would prefer to take the risk of costs sanctions at the end of the case, when possibly the refusal to mediate can be obfuscated and avoided in front of a busy judge.
It appears that the longer proceedings go on, the less likely the parties are to mediate. This is illustrated by the Court of Appeal mediation pilot, which only deals with a handful of cases per annum.
There are many ways in which the courts could encourage mediation at an early stage. They could impose a sanction on the solicitor, rather than the client, if the lawyer has stood in the way of settlement. Following the case of Brownlee v Brownlee, the court could place a cap on what each lawyer could charge their own client under their retainer, if they declined to mediate.
The courts could rescind the right to trial costs recovery for either side if there is no formal mediation no later than three months before trial.
A minority of the working group would go further and introduce ADR either as a condition of access to the court in the first place, or later as a condition of progress beyond the costs and case management conference (CCMC). The report states that:
“… what is striking about the regime as a whole is that any real criticism of either or both parties’ use of ADR (or lack of it) is left until after judgment. Why cannot and should not that conduct be capable of critical review by the court at the time the decision is taken? The subsequent decision is, first, only taken in the rare cases which get as far as final costs order and, second, is then inevitably overshadowed by the judgment. The sting of the Ungley, Fontaine and the Commercial Court orders for those who ignore them is only that they must give a written account of their reasons which can inform the court’s ex post assessment of their conduct – should the “end of the day” ever be reached. The conclusion of a well-conducted trial and a carefully prepared judgment are not a hospitable background against which to submit that the whole thing might have been better avoided!”
One answer might be for the courts to make interim costs orders, which have proved an enormously effective instrument of case management since their introduction. The other option would be for the court to simply order mediation in particular cases, or where costs are likely to be disproportionate.
The fact is that the courts already have powers to penalise parties at an earlier stage for refusal to mediate under CPR 44, which provides that:
“… judges power to sanction unreasonable litigation conduct at any time during the life of a claim, if necessary by penalising a winning party or by extra penalty on a losing party who litigated in an unreasonable way”.
The new Pre-Action Protocol for Debt Claims, introduced from 1 October 2017, does not appear to have resulted in increased use of ADR, unless litigants rushed to issue cases before this was introduced.
We have published our response to the consultation.
I suggest adopting a more joined-up approach using the existing ADR Regulations 2015 for Consumer disputes and linking this to the court system so as to introduce a pre-issue requirement to engage in an ADR Process. This is similar to implying into contracts a dispute resolution clause, such as are commonly incorporated into public sector contracts. So, for example, recently in a high profile case, Royal Mail Group Ltd v Communication Workers Union, the Royal Mail relied on such a clause to obtain an injunction to prevent strike action.
At present there is no obligation on a trader to use ADR, even though they have to inform the consumer about it. This is a serious lacuna in the regulations.
As the working group points out, the courts have not yet felt able to impose costs sanctions if the parties do not use such schemes when they are available. If the vastly greater expense of litigation is incurred pursuing a result that could have been achieved much more cheaply under a scheme, a costs sanction should follow. The courts already have the power to support the imposition of a costs sanction where the conciliation option is ignored by a complainant. With small claims, the trader often feels that it is worth the risk to defend proceedings as there may be minimal or no costs payable to the claimant if they lose.
In my experience, traders remain wedded to the idea of litigation as a means to resolve disputes, much to the disappointment of consumers who are generally more open to ADR. Then, once the case goes to court, certainly in the small claims track, the much vaunted free mediation service is rarely used.
There simply aren’t enough “mediators” (16 unqualified mediators nationwide) and mediation only goes ahead if both parties agree and are easily contacted. I also recommend the creation of a “mediation list” in civil claims, operated by district deputy judges who have trained as mediators, much like the financial dispute resolution (FDR) system in the family courts.
The CJC is right to look at the effectiveness of costs sanctions at the end of a case. I am finding that costs sanctions at the end of the case do not result in much more mediation taking place, or to the use of the Manchester Mediation Pilot. Some compulsion may be required to lead the horse to water. Lord Briggs originally envisaged resurrecting the National Mediation Helpline (now metamorphosed into the Ministry of Justice (MOJ) webpage and Civil Mediation Directory administered by the CMC) and the creation of an out of hours court based mediation service, using the court estate when the courts are not being used. We have found that, just like the ill-fated flexible operating hours pilot, there is a reluctance to utilise the courts for this alternative purpose, or to provide any funding. This does not bode well for more integrated ADR in the court service. Mediation is often viewed as a poor cousin to litigation and highly paid judges, who would not dream of sitting for free, promulgate pro bono mediation.
Personal injury claims
As always, personal injury claims are excluded from the pilot. Generally, my experience as a deputy district judge is that mid-value personal injury claims do not go to mediation and the box on the allocation questionnaire is always completed with a “no” to ADR at that stage, simply because “liability is denied” or “quantum is in issue.”
This may explain why only 71 clinical negligence claims went through the NHS Resolution mediation scheme in ten months. It is not just claimants who are resistant to using mediation if the directions questionnaires are anything to go by. If there is one area where there would be a costs benefit for using mediation it would probably be clinical negligence claims, where costs can be high and litigation is diverting much needed funds from clinical care.
The directions questionnaire, or the court’s response to the answers provided and the directions issued, is ineffective. Parties quite often use spurious reasons to justify not wanting to mediate, particularly in personal injury claims, but they face no sanctions as a result. The court is unwilling to order a stay for mediation unless both parties have ticked the box indicating that they would like a stay for mediation.
The CMC is preparing its own response to the consultation. The CMC Board has now approved, in principle, a draft proposal in response to the consultation, namely a “Draft Scheme for Automatic Referral to Mediation” in the form of a flowchart with accompanying notes.
What they envisage is a system whereby a party who agrees to mediate pays a lower issue fee. They consider that there should be a strong expectation that mediation has been offered, or considered pre-issue, and that any failure to do so will be scrutinised and may affect cost sanctions. The claimant should be obliged to state on the claim form whether or not mediation has been offered or considered, and if not, why not, together with explanations. This was apparently proposed in 2008 but not pursued. This should be accompanied by a warning regarding cost sanctions. If the claimant accepts automatic referral to mediation, they would and pay a nominal issue fee (significant discount on the current levels sufficient to cover the admin costs). This incentivises the parties to attempt mediation so that no further costs are incurred if the mediation is successful.
However, one must ask whether HM Courts and Tribunals Service (HMCTS) would be prepared to see a drop in revenue from issue fees. Also, it is unclear what exceptions would be permitted, such as injunctions. What about cases where there is no defence?
This idea is in line with the online court proposal of Lord Briggs in his review of the civil court system. Integrating ADR into the issue process may be the only way to encourage more mediation to take place. That said, I do wonder whether fixed recoverable costs, if implemented, will act as an incentive to use ADR earlier, safe in the knowledge that there is a fixed fee recoverable for mediation and that if the case proceeds, it will be at the parties’ own cost, over a set level.
As a footnote, it is lamentable that Brexit may result in a loss of impetus towards increasing ADR. It was the EU who brought us the ADR Regulations 2015 and the Mediation Directive. There is now an EU wide ADR process encapsulated in the little used EU online dispute resolution (ODR) platform.
We have received approximately five cases through the ODR platform since it was set up in 2016. In those cases, the traders have been reluctant to pay anything for the service.
The EU Parliament recently ratified a resolution on the mediation directive. It recommends that member states step up their efforts to encourage the use of mediation in civil and commercial disputes. This includes through appropriate information campaigns providing citizens and legal persons with appropriate, comprehensive information regarding the thrust of the procedure and its advantages in terms of economising time and money and to ensure improved cooperation between legal professionals for that purpose; it stresses, in this context, the need for an exchange of best practices in the various national jurisdictions, supported by appropriate measures at union level, in order to boost awareness of the usefulness of useful mediation.
It calls on the Commission to assess the need to develop EU-wide quality standards for the provision of mediation services, especially in the form of minimum standards, ensuring consistency, while taking into account the fundamental right of access to justice, as well as local differences in mediation cultures, as a means to further promote the use of mediation.
It backs mediation and declares that overly long proceedings constitute a breach of citizens’ rights.
With Brexit happening, but with a possible transition period when the UK remains in the single market and abides by EU laws and regulations, we could find ourselves following these recommendations. However, many in the UK may be less than enthusiastic about complying. Where the EU goes, the UK normally follows, in the mediation realm anyway; the trend is towards more compulsion. I would urge all interested parties to respond to the consultation by 15 December 2017. Written submissions should be sent to firstname.lastname@example.org