The Desirability of Compulsory ADR

by Tony Allen

The CJC Report Compulsory ADR, published in June 2021, takes 70 paragraphs to reach its firm conclusion that for a court to order parties to engage in ADR, even if opposed by them, does not infringe the ECHR Article 6 right to have civil rights determined by “a fair and public hearing within a reasonable time by an independent and impartial tribunal”.

Put domestically, it asserts that the Court of Appeal decision of Halsey v Milton Keynes NHS Trust in relation to this point is wrong.  The rest of the report goes on to discuss whether such orders are desirable, a different question, with its associated questions of how and when to order ADR if it is indeed desirable to do so.

This article looks at the latter aspect of the report, fully accepting (as many, including me, have argued for a long time) that its rejection of the decision on Article 6 in Halsey is absolutely right.

It has always been questionable to suggest that to divert a claim away from mainstream litigation for a short period to enhance the possibility of settlement can in any way be said to infringe Art 6 rights to a trial.  This is precisely what the pre-action protocols have done since 1999, compliance with which delays safe issue of proceedings by many months at considerable cost to both parties.

Mediations can be convened and concluded in a far shorter period than what protocol compliance requires.  The suspicion is that judges at the time of Halsey may have thought that ordering mediation was somehow ordering parties to settle, a serious misunderstanding that has taken years to dissipate.

Before leaving the “lawfulness” question, however, it is important to note that the Report sees such lawfulness as justifying not just costs sanction for failure to comply – presumably during the life of the litigation, not just retrospectively at the end of a (rare) civil trial – but also the right to stay and even strike out a claim or defence for non-compliance.

It would even justify imposing mediation as a pre-condition for issuing proceedings.

These are quite draconian powers, but of course, they are all case management powers that exist already under the CPR for other kinds of default, and they are already utilised in various types of civil proceedings.

These include Employment Tribunal applications, FDR hearings in family cases, dispute resolution hearings in some County Courts – who said that local rules were abolished by the CPR? –  and for RTA small claim protocol cases.

So how does the CJC report approach the desirability of court-ordered ADR in its remaining 48 paragraphs?

Might mediators – indeed any readers – hope for a sense of enthusiasm and a review of how desirable for the benefit of all litigants it might be to give them a real chance of early settlement without being dragged into the toils of litigation?

Unfortunately no, as the authors set off in firmly defensive mode, by trying to answer three judges and an academic who have in the past opposed compulsory dispute resolution.

It is as if the report sets simply to prove a negative – that compulsory ADR is not undesirable.  Perhaps this is anticipating the need to persuade reluctant judges rather than examining the merits of being able to order mediation or other processes.

Lord Dyson (who delivered the unanimous judgment in Halsey) recanted over legality but asserted undesirability in a speech in 2010, quoted at some length by the CJC Report.  The CJC Report also refers to the travails of the ARMS pilot at Central London County Court (CLCC), though it does not also remind us that this was launched under a rule signed off by Lord Dyson as the new Master of the Rolls at almost exactly the same time as he told the legal world in Halsey that to order ADR was unlawful!

Refuseniks at Central London were consequently able to cite the Court of Appeal in support of their refusal.

Quotations from Jackson LJ and Lord Briggs follow.

The former robustly supported costs sanctions, but the quotation simply asserts his view that compulsory ADR is undesirable, though without explaining it. He even suggests that where defendants cannot normally recover costs because of qualified one-way costs shifting (QOCS), a claimant who unreasonably refuses to mediate might lose that protection.

A passage from Lord Briggs’ Civil Justice Review is cited next, commenting that “the civil courts have declined, after careful consideration over many years, to make any form of ADR compulsory.”

As the legal basis for declining to order has (wrongly, it now seems) been in place since Halsey, it is doubtful whether there has been much “careful consideration” of the topic by judges since then.

The reasons he gives for undesirability rely essentially on the need for a good court system to declare and enforce the law, and that other dispute resolution processes need recourse to such a system to underpin how claims resolve extra-judicially.  This seems a rather strange way to explain non-compulsion, as (A)DR has always operated in the shadow of the law – “if you don’t shift towards me, I will revert to court to get more”, with an unfettered right to start or resume litigation if settlement is not achieved.

Furthermore, most mediators would actually agree with the quotation from Professor Hazel Genn (another voice resisting compulsory mediation) when she said “mediation without the credible threat of judicial determination is the sound of one hand clapping”.

Do these comments betray a hidden misunderstanding that to order mediation leads to compulsory settlement and a barring of the court door?

If so, the CJC Report thinks that they are clearly wrong.  Mediation and ENE have never slammed the court door shut.

In passing, it is intriguing to note how judicial thinking has moved on since Lord Briggs’ Civil Structure Review in 2016.  He said then (as quoted by the CJC Report) “the civil courts exist primarily, and fundamentally, to provide a justice service rather than merely a dispute resolution service”.

Contrast that with the recent statement of the new Master of the Rolls, Vos MR, who recently is quoted as saying: “ADR should no longer be viewed as alternative, but as an integral part of the dispute resolution process: that process should focus on resolution rather than dispute”. 

How quickly views and culture can change.

The CJC report seeks to answer the two main objections raised by the above – firstly whether dispute resolution is less effective when compulsory; and secondly whether it is constitutionally undesirable (even if technically legal) for courts to divert cases away for possible settlement.

Rightly, neither is rated as valid by the Report.  There is no convincing evidence as to the first proposition, and nothing has emerged from the existing manifestations of compulsory extra-judicial dispute resolution in this jurisdiction (MIAMs, FDRs, the ET and ACAS, etc) to support this, let alone in other common law jurisdictions where compulsion has been in place for many years without adverse reaction.

On the second proposition, with (A)DR giving free access back to judicial determination, it is hard to see how it could be constitutionally objectionable to encourage parties to try to settle. One might observe that if every case which currently settles were to be tried instead, the civil courts system would be utterly swamped.

It only manages to function as it does because so few cases actually reach the court door.  As a further gloss triggered by those last words, it is to be hoped that the bad old days of court-door settlements have largely gone as a general result of the CPR.  Indeed, one of the very positive advantages making mediation desirable (and even perhaps compulsory) is its effect in creating an artificial court door for which parties can prepare and be ready to settle far earlier than the trial date.

Dispute resolution outside the courts must of course be delivered by competent neutrals and be cost-effective, as the CJC report emphasises.

Accessible online processes for lower value cases are already installed or being put in place, and all agree that the Small Claims Mediation Service needs to be enhanced.

But as to higher-value cases, the cost of pausing to mediate, especially bearing in mind the high chance of settlement, pales into insignificance against the costs of a trial at the end of the labyrinthine litigation process.

In the clinical negligence sector, for instance, where mediation is mobilised regularly, and most claimants are represented by lawyers on conditional fee agreements, there is no sign of resistance because of cost.

Where breach of duty and causation are admitted, and where a party is demonstrably indigent, NHS Resolution pays for the full cost of the mediation.

In any event, where there is an institutionally funded defendant faced by a claimant legal team on conditional fee agreements, the cost of mediation is again in no way disproportionate to what is at stake in higher-value cases.  The balance is narrower for middle ground values, where perhaps fixed costs may be introduced.

As to reliable mediators, there is a large market of mediators and a number of highly reputable mediation provider organisations, all carefully monitored, at least as to higher-value cases, by experienced law firms.  There is very little evidence of mediator unreliability or incompetence. The CMC will undoubtedly broaden its registration and supervision roles but this does not yet feel like an inherently unsound situation for the public when viewed pragmatically.

Two side themes enter towards the end of the CJC Report which give rise to concern.

Firstly, a sudden suggestion that a broad use of early neutral evaluation (ENE) is a good idea.  Whether the report means judicial evaluation is not made clear, but private evaluation has never caught on in this jurisdiction and whether private or judicial, it is difficult for this to be done accurately other than late in the life of a claim when most if not all of the evidence is in place and can be placed before the evaluator in what is bound to be somewhat adversarial way.

Evaluation is just as backward-looking and rights-based as trial would be, and will still keep the actual parties at a distance from each other.  Maybe a simple case can be resolved by this means, but the less material there is for an evaluator, the less correct that evaluation is likely to be.  The Civil Mediation Council’s response to the CJC Report gently questioned the over-involvement of judges in the dispute resolution process.

They suggest that not everyone makes a good mediator, including judges (though there have been some excellent ex-judge mediators!).  This is a view taken by Thorpe LJ in one of the very few published judgments dealing with ENE, albeit the parallel Family Division process of judicial financial dispute resolution (FDR).  In Rose v Rose [2002] EWCA Civ 208, he said:

The art of mediation depends upon qualification and training. Years of experience in a specialist litigation field are no substitute for that training and qualification.  Very few of the judges whose duty it is to conduct FDR hearings will have had any training and qualification as mediators. However, those who have long experience in a specialist field of litigation are supremely well qualified to offer what is widely known as early neutral evaluation. That is precisely what Bennett J offered, having prepared himself by extensive pre-reading and by drawing on the expert submissions of leading counsel both written and oral. In many cases the neutral evaluation will be supplemented by an objective risk analysis of the costs incurred, and the costs to be incurred by proceeding to full trial, against the value of what is truly in issue, drawn from a comparison of the applicant’s lowest target and the respondent’s highest offer. Beyond those methods there may be dangers in judges over-estimating their ability to bring about a compromise by the use of other forms of mediation for which they have received no training.

The second matter of concern is what the report calls “coping with perfunctory performance” which seems to give rise to the possibility of judicial policing of those who turn up to tick a box and do not try to settle.

This is dangerous territory.

Mediators currently can assure parties that refusing to settle cannot be held against them in later litigation.  Furthermore, mediators are willing to shoulder the responsibility for persuading parties to stay long enough to ensure that their interests are not best served by settlement. There is a real risk that judicial policing of parties alleged by their opponent to have been unreasonable during a mediation will of itself create pressure on parties to settle when they have a good reason not to do so.

One thing on which Halsey was absolutely right and properly authoritative still is the privacy of the mediation process.  Lord Dyson said (at para. 14)

We make it clear that it was common ground before us (and we accept) that parties are entitled in an ADR [sic] to adopt whatever position they wish, and if as a result the dispute is not settled, that is not a matter for the court … if the integrity and confidentiality of the process is to be respected, the court should not know, and therefore should not investigate, why the process did not result in agreement.

Finally, in what seems slightly to contradict the earlier suggestion that mandatory dispute resolution should be proportionate in cost and time, the conclusion suggests that it should largely be free.

The CMC is very concerned about this, underlining the need for a properly trained mediator to be properly remunerated for the skills they have to learn and deploy.

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