ARTICLE
26 November 2024

CPR Amendments: How Courts Are Mandating Alternative Dispute Resolution In Civil Cases

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In December last year, the Court of Appeal determined in Churchill v Merthyr Tydfil CBC that there was judicial support for ordering alternative dispute resolution (ADR)...
United Kingdom Litigation, Mediation & Arbitration

In December last year, the Court of Appeal determined in Churchill v Merthyr Tydfil CBC that there was judicial support for ordering alternative dispute resolution (ADR) by establishing that in principle the court may stay proceedings should parties fail to meaningfully engage in ADR. A summary of the decision can be found here.

Courts have the power to order parties to engage in 'ADR', and so on this point, Halsey v Milton Keynes NHST was wrong. After Halsey, Courts could only "robustly recommend" ADR, occasionally imposing a costs sanction on a party if a matter eventually reached trial, for having unreasonably refused to use it.

Post Churchill, the Civil Procedure Rules Committee (CPRC) considered that an improved framework was necessary (and urgent) and in April 2024 it had agreed on draft amendments to the CPR and published these for consultation. The new rules came into force on 1 October 2024.

The Amendments

The full text of the relevant amended Rules (which are CPR 1, 3, 28, 29 and 44) can be found here. The three main areas of change are as follows:

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Effect of the Amendments

These amendments to the CPR, alongside the Court of Appeal decision in Churchill and the parallel developments over small claims introduced on 22 May 2024 will not limit access to the courts but they will require parties to consider engaging sooner in ADR, and in particular, mediation.

Courts will be able to order mediation at any point during the life of any case, rather than relying on the potential pressure to mediate generated by the prospect that a case will reach trial and costs sanctions then applied by a judge retrospectively for unreasonably refusing to mediate.

Such sanctions under CPR 44.(5)(e) remain available and in Northamber v Genee the Court of Appeal sanctioned a party for failure to mediate following Churchill.

Parties are more likely to agree to use mediation as a matter of course to avoid the risk of a costs sanction at a directions hearing or on a specific application by an opponent. In other jurisdictions parties pre-empt compulsion by consent.

In addition, where one mediation which failed, courts have already strongly recommended, in Francis v Pearson and Burston that a second mediation because new material may have emerged to change perceptions.

ADR Orders made since 1 October Amendments

Last month, in Elphicke v Times Media Ltd (Formerly Times Newspapers Ltd), the court ordered (of its own motion) the parties to engage in mandatory pre-detailed assessment ADR of the costs of the claim following discontinuance by the Claimant. The Court also ordered that "Good reason would be required if the form of ADR was at any less engaged a level than a mediation via costs lawyers...and that any party not engaging in ADR would have to be able to justify that to the costs judge, and to be alert to r.44.11 and the developing law since Churchill v Merthyr Tydfil."

ADR

ADR includes neutral evaluation (as well as mediation) and there may be matters more suited to that form of ADR than mediation. Although some parties to mediation invite the mediator to use their evaluative skills, instead of simply facilitating the discussions, it is not aways the case, especially when the mediator does not necessarily have a particular expertise.

There will be matters where early ADR is suitable, even where minimal disclosure has taken place because once the parties have invested in legal costs (and potentially expert costs) it can become more difficult to explore ADR as the parties have become more entrenched and less capable of finding a resolution.

It is not always necessary to stay proceedings for ADR but parties benefit from investing time to prepare properly for mediation.

Conclusion

The new CPR Rules empower the Courts to be more proactive in ordering parties to engage in ADR and help parties facilitate when it may be most effective and whether it be limited to one or more issues. This is a benefit to both Claimants and Defendants who may hope that relations can be maintained and/or who may have limited resources available, whether in terms of time or money. Where parties dismiss ADR and provide the court with a reasoned explanation, they may still be encouraged to use ADR.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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