Mandatory Mediation – A New Wave of ADR?

by Dr Karl Mackie CBE

The publication by the Civil Justice Council of “Compulsory ADR”, (July 2021) a paper by four distinguished lawyers reviewing the questions of whether the courts compelling a mediation or other ADR process can be lawful – and if so when that might be desirable (what circumstances, case type, stage of proceedings) – is a momentous moment for mediation and civil justice in England and Wales.

It opens up the possibility of an intense reflection on how to reform the justice system through closer integration within the system of ADR methodologies and understanding.

The Report has been preceded in recent months by strong statements from the Master of the Rolls and Lord Chancellor, to the effect that the justice system needs rethinking to ensure it is fit for purpose for effective dispute resolution.

Furthermore, the ‘Alternative’ in ADR needs to be dropped in favour of a more integral approach to thinking around which DR processes make the most sense for a particular matter or sector.

The Report spends a significant amount of space reviewing the original decision of the Court of Appeal in the case of Halsey v Milton Keynes [2004] 1WLR 3002, where Dyson L J ‘s (as he then was) judgement concluded that parties to a dispute could not be compelled to participate in an ADR process though judges could encourage them strongly in that direction.

The reasoning at the time was principally argued on the basis that such a mandatory requirement could breach Article 6 of the European Convention on Human Rights in potentially fettering the right of access to a public trial.

This finding was probably obiter rather than a direct precedent (the case was about offers between the parties to mediate and whether this could attract costs sanctions for unreasonable refusal), and in any case, Lord Dyson himself subsequently questioned its technical correctness.

The case was also about the questions in a court’s consideration of cost sanctions for unreasonable refusal to mediate, and the court spelt out some of the circumstances when this might be inappropriate.  I remember at the time, from the perspective of CEDR’s mediation caseload, the chilling effect that the Halsey case had on the field, suddenly halting what, following the Woolf reforms, had been steadily rising numbers.

Parties were no doubt pushed back both by the prospect of an Article 6 point, but also by the rather detailed forensic complications suggested within the detail around when a refusal might be reasonable or not, and who would bear the burden of proof.

As the Report notes, there has been much more experience since then with ADR practice, in the UK and other jurisdictions.  The authors note much of this and also deal with the intrinsic legal analysis, to reach the conclusion that parties can indeed be compelled to participate in ADR and that such a procedural requirement can be seen as a desirable development within certain jurisdictions.

While there has not been an appeal case strictly reviewing the Halsey point re mediation, the recent consideration by the Court of Appeal of whether a judge could order an ‘ENE’ (Early Neutral Evaluation) without party consent under the Civil Procedure Rules, Lomax v Lomax [2019] 1 WLR 6527 held that this was a valid exercise of judicial power, another point of support for a changed outlook.

There are several other sources quoted in the Report that justify a reappraisal of the original Halsey stance –  the more regular adoption internationally of compulsory ADR and its judicial acceptance – in Ontario, Italy, US and EU judgements; the enigma of having alongside non-compulsion a regime of imposed costs for unreasonable conduct in refusing mediation offers; the emergence of procedures in specialist jurisdictions that are in effect, or come close to being, compulsory ADR – Mediation Information and Management sessions in family practice, ACAS Early Conciliation certificates in the employment tribunal system, use of judicial nudges in Financial DR and HDR cases.

Also, the fact that civil procedure – not least disclosure – already imposes requirements on parties that can impose significant time and costs before parties are allowed to proceed to trial.

The authors also quote from several senior judges, including those who sat in Halsey, subsequently questioning the reasoning applied in the case.

While ADR practice has developed significantly since those Halsey-an days as shown in the biennial CEDR Mediation Audits, and is conducted in many commercial/civil cases as if it were required as part of case management, there are still very large tracts of civil justice where ADR may not have fulfilled its full potential to contribute to faster or better justice.

This Report’s outline of the case for a rethink to embrace ADR more within standard procedural options, is therefore a very welcome development.

And it flags up some serious options with this new viewpoint, such as ADR being more than a choice within case management, but also as a possible condition precedent to issuing proceedings or for claims being debarred for failure to follow the required ADR procedure.

When and in What Circumstances Should Integral (A)DR be Utilised?

The ‘devil is in the detail’ once one moves beyond the arena of high principle, and indeed the second part of this Report only flags up the direction of thinking and some broad observations rather than give detailed guidance on when compulsory ADR should be used.

But in contemplating that mandatory ADR could in theory be used as a condition precedent even to enter litigation in certain circumstances, this opens up the field for very significant choices to consider.

There will be much to work through in the coming months over this question of if, when and how to apply more forceful mediation or ADR requirements within the civil justice system – even though the principle has been strongly endorsed now.

The second part of this Report flags up some of the questions and complexities around this, but admits to only slim coverage of this question at this stage.  It does state the perhaps obvious principle that compelling ADR would not be controversial if there are no time or money implications for the parties, a perhaps unlikely scenario.

Some of the ADR community have already argued for some time that mediation as a first stage should be the default mode in litigation, parties having to argue before the court a rationale for opting out of the requirement to mediate (similar to the Ontario system).

More likely is a sector-by-sector review depending on the justice track in question, and taking into account the typical cost, issue and people dynamics within fields like property, debt recovery, family proceedings, or personal injury.

Nor, finally, should one ignore the fact that some of this debate or policy decision-making, will be strongly influenced by the fact of a pandemic and a period when courts and other forums are struggling with capacity and the challenges of adapting to accelerated technology usage.

The 5 Cs in the ‘New Wave for (A)DR’

Alongside serious consideration of the new ‘Compulsory’ option for ADR to be effectively integrated in the justice system, and what ‘compulsory’ might mean, I believe that there are 5 other ‘Cs’ which in practice will inevitably be in play in any thinking around this development:

Crafting

Any reforms will need to be subject to careful analysis that takes on board in-depth knowledge both of mediation and of the dynamics of legal processes – both general and specific within sectors.

For example, what role should judges or other officers of the court play in ADR practice or case oversight?

What are the implications for case sectors with a significant number of litigants in person and/or high-risk issues?

How will costs be managed?

Should conduct in an ADR process be open for later review?

What is the potential liability/reward for ADR professionals in these systems?

What technology or in-person requirements are needed?

Much of this will need to be crafted and tested with stakeholders.

Cost-Effectiveness

A particularly dominant feature of crafting for a publicly funded justice system, is always going to be whether the system is cost-effective and indeed capable of contributing to cost savings in the administration of justice.

This has always been a difficult area to measure when one introduces new stages, and with a process known for needing patience and persistence to work. But it will be vital in any review of when and how ADR is deployed, and the metrics for success.

Competence

If there is going to be widespread use of ADR, whether delivered by judges, court officers, or outside mediators, there needs to be recognition of what should count towards ADR competence in specific sectors, how training is supplied, and how quality of work is overseen including feedback, quality improvement, and complaint handling.

Care 

While there is a substantial body of experience in ADR well beyond that available at the time of the Halsey judgment, there should be recognition that the early stages of any radical change towards automatic referral or mandatory models, will particularly demand monitoring and feedback mechanisms to ensure intelligent refinement of processes before defective processes or unforeseen/unwanted client and legal profession reactions become baked in.

And clients will need assistance in understanding how the process integrates within the justice system.

Choice 

Part of the strength of mediation has always been about the self-determination of parties in terms of their acceptance of outcomes.

Mandatory mediation is more acceptable because it is not depriving parties of ultimate access to a trial and can still ensure quality dialogue takes place.

That quality is vital for mediation to continue to be seen as a critical early piece of the dispute processing spectrum.  It will also be vital for the ADR process to be crafted to ensure it delivers value and opportunities such as better case insight for lawyers and clients, even if not succeeding in creating settlement, so as to avoid any likelihood of it becoming a ‘box-ticking’ exercise.

Part of the quality of mediation is that it helps parties clarify the real issues in a case, so timing choice is a key ingredient in process crafting too.

Finally, it is worth focusing briefly on another key choice point in a revised civil justice approach, hinted at obliquely in the Report commenting that ADR by judges will not be so controversial or add in the same way to parties’ costs.

For many years, judges in some key continental European jurisdictions have seen it as part of their role to help parties settle cases where this is possible.  There is likely to be a line of thinking which will build on the refreshing of the justice system in England and Wales, to advocate for more experimentation with proactive judicial ‘nudging’ in the system.

This has already got some legs with calls for more ENE, and within family and employment work.

Whether the courts will extend further into this route, and against the background of a possible pandemic backlog, will be worth watching out for.

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