Alternative dispute resolution (ADR) refers to the ways in which a dispute may be resolved without going to court. For example, ADR can include mediation (where an independent third party helps the parties reach a compromise). It can also include other methods, such as early neutral evaluation, arbitration and even, without prejudice negotiation.
Is ADR a legal requirement?
There is at present no general rule in law compelling parties to use ADR to resolve their dispute. Instead, the Civil Procedure Rules (which govern the conduct of litigation in the Courts of England and Wales) strongly encourage parties to utilise ADR and enables the Courts to levy (potentially significant) cost sanctions against parties who unreasonably refuse to use ADR. This is particularly so in the case of unreasonably refusing to engage in mediation.
In addition, there is usually a significant benefit to the parties engaging in ADR, as it greatly increases the chances of the parties determining the outcome of their dispute on terms they are both happy with.
Could it become a legal requirement?
The Master of the Rolls (Sir Geoffrey Vos) commissioned a report by the Civil Justice Counsel in January to look into and decide whether ADR could be made compulsory for all litigants.
The report concludes that mandatory ADR is compatible with Article 6 of the European Human Rights Convention and is, therefore, lawful (Article 6 is the right to a fair trial).
Lady Justice Asplin, chair of the Judicial/ADR Liaison Committee and lead judge for ADR, stated:
“We have concluded that ADR can be made compulsory, subject to a number of factors. More work is necessary in order to determine the types of claim and the situations in which compulsory (A)DR would be appropriate and most effective for all concerned, both in the present system and in relation to online justice”
Sir Geoffrey Vos, added:
“As I have said before, 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’.”
This report opens the door to a significant shift towards earlier resolution. The full report can be read here
Watch this space!
