The trend to encourage mediation

Access to Justice

Lord Woolf's Final Report on Access to Justice (p 11), explained that for some time before the Civil Procedure Rules ("CPR") came into force, the courts had encouraged parties involved in litigation to use ADR, particularly mediation.

Civil Procedure Rules

The Civil Procedure Rules ("CPR"), practice directions and pre-action protocols have built on these early developments. CPR 1.4(1) obliges the court to further the overriding objective of enabling the court to deal with cases justly by actively managing cases, and Rule 1.4(2)(e) defines "active case management" as including "encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure".

CPR 26.4(1) provides that "a party may, when filing the completed allocation questionnaire, make a written request for the proceedings to be stayed while the parties try to settle the case by alternative dispute resolution or other means".

The term "alternative dispute resolution" is defined in the Glossary to the CPR as a collective description of methods of resolving disputes otherwise than through the normal trial process." In practice, however, references to ADR are usually understood as being references to some form of mediation by a third party.

Costs

The general rule is that the unsuccessful party is ordered to pay the costs of the successful party (CPR 44.3(2)(a)). There have been several cases in which mediation has been the factor displacing this rule, especially where there has been a refusal of mediation by the party who ended up winning in court.

Genn Report

Professor Hazel Genn's report "Court-based ADR initiatives for non-family civil disputes: the Commercial Court and the Court of Appeal" (March 2002) surveyed the effectiveness and attitudes towards mediation, specifically in court based initiatives.

Recognition by the Courts

The virtues of mediation in suitable cases are recognised in the following court guides:

Judges in the Commercial Court routinely make "ADR orders" in the form set out in Appendix 7 to the Admiralty and Commercial Court Guide.

ADR Pledge

We are also mindful of the position which has been taken by Government on this issue. Thus, in March 2001, the Lord Chancellor announced an "ADR Pledge" by which all Government departments and Agencies made a number of commitments including that: "Alternative Dispute Resolution will be considered and used in all suitable cases wherever the other party accepts it".

DCA Report

In July 2002, the Department for Constitutional Affairs published a report as to the effectiveness of the Government's commitment to the ADR pledge. The report stated that the pledge had been taken very seriously, and identified a number of initiatives that had been introduced as a direct result of it.

The Report noted various initiatives encouraging the use of mediation, including the following on the part of the National Health Service Litigation Authority ("NHSLA"):

  • "The encouragement of greater use of mediation, and other forms of alternative dispute resolution, is one of the options considered by the NHSLA, who are responsible for handling clinical negligence claims against the NHS. The NHSLA is working with the Legal Services Commission to develop a joint strategy for promoting greater use of mediation as an alternative to litigation in clinical negligence disputes. Since May 2000 the NHSLA has been requiring solicitors representing NHS bodies in such claims to offer mediation in appropriate cases, and to provide clear reasons to the authority if a case is considered inappropriate."

Cases supporting use of mediation

Strong support for the use of ADR in general , and mediation in particular, has been given by the courts in cases including the following:

In Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 (11 May 2004) the Court of Appeal considered whether and when a party who succeeded in court might nonetheless be penalised in costs for an unreasonable refusal to mediate.

In Burchell v Bullard & Ors [2005] EWCA Civ 358 (08 April 2005) the Court of Appeal decided that the unreasonable refusal of an offer to mediate before court proceedings had even started could merit a sanction against the refusing party in costs. Importantly, the Court of Appeal also concluded that the refusing party cannot rely on its own obstinacy as a basis for saying the mediation would have had no reasonable prospect of reaching a settlement. Furthermore, the refusing party may not even be able to rely on its solicitor's or expert's advice either, where the result shows that mediation ought reasonably to have been attempted.

Summary

It is therefore clear that parties should take the following steps in any dispute:

  • consider the use of mediation at the earliest practicable stage
  • propose or agree to mediation where it would have reasonable prospects of success, which will be the case more often than not
  • avoid refusing mediation purely on the basis of professional advice or because of their own obstinacy.
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