Civil Justice Council supports mandatory ADR

The Civil Justice Council (CJC) has published a report which concludes that compulsory alternative dispute resolution (ADR) is compatible with the European Convention on Human Rights (ECHR) and has the potential to bring about a beneficial change in the culture of dispute resolution.

The report considers both the legality of compulsory ADR under English and international law, and the circumstances in which it would be desirable for an element of compulsion to be imposed.

Legality

The legality of compulsory ADR turns on whether or not forcing the parties into an unwanted alternative procedure constitutes an unacceptable obstruction of their right of access to a court, and thus of the right to a fair trial guaranteed by Article 6 of the ECHR.

The report reviews English and ECHR caselaw on this point and concludes that compulsory ADR is lawful provided the ADR procedure is not unduly onerous (and in particular, that any associated cost and delay are proportionate) and leaves the parties free to decide whether to settle or to continue to trial. The authors suggest that in most cases an amendment to the Civil Procedure Rules would be sufficient, although in some cases (e.g. in Tribunal claims) a statutory change might be required.

Desirability

The report notes that much of the debate over the desirability of compulsory ADR is focused on proposals for compulsory mediation, whereas in fact there are a number of other ADR methods that might be suitable. The report identifies two recurring concerns in the debate:

• That parties who are only willing to use ADR under compulsion will not properly engage with the process, so that it will be ineffective and serve only to increase cost and delay; and
• That keeping more cases out of the courts undermines their constitutional role.

The report concludes that neither concern is decisive. The question of efficacy is difficult to study empirically, but in the majority of overseas jurisdictions that use compulsory mediation, there appear to be no significant differences in settlement rates between voluntary and compelled mediations. Anecdotally, English mediators also report that parties who are initially reluctant to mediate often become engaged as the process goes forward and eventually do reach a settlement. As to the constitutional point, the authors suggest that this should not be a real concern so long as the chosen ADR method does not force the parties to reach an actual settlement against their will, but preserves the option of returning to the courts if ADR is unsuccessful. Indeed, greater use of compulsory ADR could help to safeguard the role of the courts by keeping caseloads manageable.

Success factors

The report identifies a number of factors that it suggests need to be present in order for a compulsory ADR scheme to succeed. Based in part on an analysis of existing compulsory or near-compulsory schemes in England and overseas, these include:

• The chosen form of ADR must not be disproportionately burdensome in terms of cost or time;
• Specialist areas in which a typical dispute is highly emotionally charged – such as neighbour disputes, financial settlements in divorce, and industrial disputes - often benefit particularly from ADR due to the presence of a skilled neutral;
• The neutral must be one in whom the parties can have confidence, which is likely to require systematic regulation if ADR is to be compulsory;
• Thought must be given to whether or not the parties should be encouraged to seek legal advice, as there is evidence that not doing so reduces engagement in ADR;
• It is important to identify the stage at which it is most appropriate to compel ADR. The authors suggest that early neutral evaluation could usefully be required in all but the most complex cases, with an additional obligation to participate in some form of ADR at a later stage in the procedure;
• The obligation to participate in ADR must be backed up by sanctions for either failing to comply or complying in only a perfunctory fashion. Strike-out or costs sanctions are suggested as the most obvious (but not necessarily the only) options.

The report also identifies a need for greater public education about ADR in order to encourage engagement with and confidence in any mandatory system. It concludes that, in the first instance, the best models for compulsory ADR may be online settlement questionnaires that are designed to identify a party’s appetite for settlement, and various forms of early neutral evaluation. However, the authors suggest that expanding a compulsory scheme to include mediation could be considered at a later date, once the public is more familiar with the process.

Comment

This report is a welcome contribution to the debate about civil justice reform. Greater use of compulsory ADR in the English courts, taking into account the success factors the authors have identified and without removing the parties’ right to bring their case before a judge if ADR fails, could contribute to more effective case management and resource allocation. Early neutral evaluation in particular, is a regular feature of a number of civil law systems and seems to play a useful role in encouraging parties to take a realistic view of their case from the outset.

The conclusions reached by the authors of the report have been welcomed by the Master of the Rolls, Sir Geoffrey Vos, who is chair of the Civil Justice Council and Head of Civil Justice. However, they deliberately do not amount to a fleshed-out proposal. Further work will be required before any new scheme of compulsory ADR can be introduced. In the light of the report’s conclusion that compulsory ADR is already lawful (subject to preserving the right of access to the courts if the ADR process does not result in a settlement), that task is likely to fall to a working group under the auspices of the Civil Procedure Rules Committee rather than requiring legislative change.

For further information, please email the authors or your usual CMS contact.