The update to the Civil Procedure Rules concerning the use of alternative dispute resolution

The English courts have traditionally been less willing than the courts in other jurisdictions, notably US and Australian courts, to drive the use of alternative dispute resolution (ADR). Dyson LJ’s comment in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 that compelling parties to mediate would violate their right to a fair trial exemplified this reticence.

However, this approach is changing.

In Churchill v Merthyr Tydfil Borough Council [2023] EWCA Civ 1416, the Court of Appeal held that a court could ‘lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process, provided that the order made does not impair the very essence of the claimant’s right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost’ (at Paragraph 74 (ii)).

The ADR changes in the CPRs

Following the Churchill decision, the Civil Procedure Rule Committee has proposed and consulted on amendments to the ADR provisions in the Civil Procedure Rules (CPRs) intended to clarify the power of the courts to compel parties to engage in ADR (in addition to using costs sanctions where there is an unreasonable failure by parties to do so).

The amendments include:

• Changes to CPR 1.1 regarding the overriding objective to add that dealing with a case justly and at proportionate cost necessarily includes, so far as practicable, using and promoting ADR methods;
• Changes to CPR 1.4 and 3.1 to clarify that judges may order as well as encourage parties to participate in ADR procedures;
• Changes to CPR 28 and 29 to add that courts must consider whether to order or encourage parties to participate in ADR for fast-track, intermediate track and multi-track claims; and
• Changes to Part 44 to make clear that the failure to comply with an order for ADR or an unreasonable failure to participate in ADR proposed by another party is to be considered when deciding to make any order about costs.

Commentary

The Churchill decision, and the detailed CPR rule changes to give effect to it, make obvious sense. A court ordering ADR is clearly not something that will, in many circumstances, have any adverse effect on the ability of parties to obtain justice given that a requirement to engage in ADR leaves the court process open if ADR fails. Where it is obvious to the court that ADR is likely to assist the parties to the dispute in resolving some or all of their differences, it is clearly sensible for the court to have the power to do this.

However, ADR is a means to ensuring disputes are resolved fairly and efficiently. It is not an end in itself. In some cases, parties to litigation disagree about important points of principle that cannot be resolved through dialogue, which will sometimes have occurred extensively before litigation is commenced. In such cases requiring ADR may serve only to waste time and costs rather than to ensure cases are resolved fairly and efficiently, as can occur in some US states where the courts are zealous in imposing ADR.

Given that the overriding objective of the CPRs is intended to articulate the purpose or ‘end’ of the CPRs, it is not clear that including the use or promotion of ADR in the overriding objective itself is a sensible step, notwithstanding the ‘so far as practicable’ qualification. The fact that ADR is practicable does not mean it is necessarily useful.

It is therefore important that the courts do not treat the amendments to the overriding objective as requiring them to impose ADR in all cases where this is possible, but instead use judicial discretion to identify those cases where compelling ADR has a real prospect of enabling the parties to resolve or narrow the dispute between them. This will require fact driven judgments to be made on a case-by-case basis as to whether to order ADR, when to order ADR and what form of ADR to impose.

Using the Churchill decision and following the CPR rule changes in this way should further enhance the reputation of the English courts as a premier forum for the resolution of complex high value disputes.