Litigation – A step towards compulsory alternative dispute resolution
From the 1st October 2024, the Civil Procedure Rules (“CPR”), which govern the way in which parties conduct civil claims, have been amended to include additional powers to enable the courts in England and Wales to order that parties engage in alternative dispute resolution (“ADR”).
Previously, there has been no obligation on the parties to engage in ADR, such as mediation, before bringing a claim to court. However, in 2023, the Court of Appeal decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ. 1416 (“Churchill”) set out that the courts have the power to ‘stay’ a claim to allow the parties to engage in ADR (meaning to effectively put the claim on pause), however, this was limited as to not jeopardise the claimant’s right to proceed to a hearing and where ADR was not disproportionate.
There has long been discussion and rumour of the introduction of compulsory ADR in civil litigation, and this principle has now been implemented within family proceedings under the Family Procedure Rule 28.3(7) to include that any failure by a party, without good reason, to attend non-court dispute resolution, may result in no order as to costs being made. In practice, this means that parties who unreasonably refuse ADR in family proceedings, who are subsequently successful in their claim, could not recover their legal costs from the losing party. Given the introduction of compulsory ADR in family proceedings, the same principle has now been determined in relation to civil claims.
Key Changes to Civil Procedure Rules (CPR)
Following the decision of the Court of Appeal in Churchill, the CPR has been amended (as of the 1st October 2024) to implement the practical steps that the courts can take to order parties to engage in ADR. The most notable changes are: –
- CPR 1(f) – when “dealing with a case justly and at proportionate cost includes, so far as is practicable … promoting or using alternative dispute resolution”
- CPR 3.1 (2)(o) – the court’s case management powers now include a provision to enable the courts to “order the parties to participate in ADR”
- CPR 28 – which sets out what directions may be applicable in both fast track and intermediate track cases includes “whether to order or encourage the parties to engage in alternative dispute resolution”.
- CPR 29 – case management for multi-track cases (costly and complex cases) now includes “When giving directions, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution.”
- CPR 44 – when considering costs in a claim, the courts must now consider “whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution”
The effect of the changes made to the CPR and the likely practical implications are that the courts are now more likely to consider the parties’ engagement with ADR at an early stage in proceedings. Where the courts feel that the claim is suitable for ADR and that it is proportionate (to the overall claim itself and from a costs perspective – as ADR can be costly to the parties) they now have the power to order parties to engage in ADR and failure to do so may result in costs sanctions on the party that refuses to engage.
Generally, practitioners have always advised parties to engage in ADR at an early stage and so the changes are a natural and structured progression of the general consensus. ADR can, in the right circumstances, be a useful tool to encourage the parties to reach an amicable settlement, with litigation as a last resort. The changes to the CPR remain at the courts’ discretion and so only through the coming months and years will we see how far the courts are willing to push their new powers to order ADR.
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