Under the Civil Procedure Rules 1998 the courts are under a duty to encourage litigants to engage with ADR. With reference to decided cases discuss the response of the courts when either or both parties refuse to do so.
English Legal System – Essay Plan – Due 14th Jan – Word Limit: 1000
Topic: Under the Civil Procedure Rules 1998 the courts are under a duty to encourage litigants to engage with ADR. With reference to decided cases discuss the response of the courts when either or both parties refuse to do so.
Intro: Define terms and briefly introduce topics that will follow
1st para: Define ADR:
2nd para: background of CPR 1998
Cases:
- Halsey v Milton Keynes General NHS Trust: the most important and defining case
- Dyson LJ said:
- “Parties sometimes need to be encouraged by the court to embark on an ADR…..But we reiterate that the court’s role is to encourage, not to compel. The form of encouragement may be robust…”
- the Court of Appeal identified six factors that may be relevant to any such consideration:
- (a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which settlement methods have been attempted;
(d) whether costs of the ADR would be disproportionately high;
(e) whether any delay in setting up and attending the ADR would have been prejudicial; and
(f) whether the ADR had a reasonable prospect of success.
Wright v Michael Wright Supplies Ltd
“Judges should not have to micro-manage cases, coaxing and cajoling the parties to focus on the issues that need to be resolved”
- that the court does not have jurisdiction to order parties to mediate against their will is it would be a violation of Article 6 of the European Convention on Human Right
- Burchell v Bullard, [2005] EWCA Civ 576 Ward LJ said:
- “The parties cannot ignore a proper request to mediate simply because it was made before the claim was issued. With court fees escalating it may be folly to do so… These defendants have escaped the imposition of a costs action in this case but defendants in a like position in the future can expect little sympathy if they blithely battle on regardless of the alternatives”.
In the case of CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd, Mr Justice Coulson:
“The judges in the TCC set great store by ADR. Disputes like this one are time-consuming and therefore expensive to fight out in the traditional way. Even if the court adopts all the various techniques for reducing the trial to a minimum (such as ‘hot-tubbing’ the experts and carefully timetabling the cross-examination), trials are often unwieldy and cost-inefficient. Expert’s fees often account for a large proportion of the costs. A professional mediator, engaged at the right time in the process and in the right spirit of cooperation by the parties, will often be able to resolve the most intractable case and save everyone a good deal of money, time and effort. The TCC lists in London would be impossible to operate without the good work of mediators and others involved in the ADR process.”
When will the courts apply sanctions? Recent case law
In Rolf v De Guerin[2011] EWCA Civ 78, a small building dispute, which Rix LJ described as a “sad case about lost opportunities for mediation”, as Mr De Guerin justification was that he wanted his “day in court”. LJ Rix found that this was not “an adequate response to a proper judicial concern that parties should respond reasonably to offers to mediate or settle and that their conduct in this respect can be taken into account in awarding costs”.
*Parties who express an unwillingness to mediate must at least provide reasons as to why at the time.
Silence in the face of a request to mediate will almost certainly be considered to be both a refusal and an unreasonable refusal. PGF II SA v OMFS Co & Anr
What matters is the actual position at the time a request to mediate was refused. In Corby Group Litigation v Corby District Council Mr Justice Akenhead said this:
“Hindsight shows that CBC [the council] was wrong but one must judge the decision to refuse ADR at the time that it was under consideration. CBC had expert evidence which supported its stance on every material aspect of the Group Litigation issues and the Claimants were adopting what I have described as a “scatter gun approach”. It was not unreasonable to form the view that mediation would not have produced a settlement”.
Recent developments
Phillip Garritt-Critchley v Andrew Ronnan and Solarpower PV Ltd
due to the defendants’ unreasonable failure to mediate – therefore cost sanctions were applied. However, they were allowed to pay such sanctions on an indemnity basis. (the defendants had to pay for the claimants legal fees)
- 4-day trial, but settled before the judgment.
- When asked in correspondence why they were not willing to mediate, the defendants’ solicitors had said that:
“Both we and our clients are well aware of the penalties the court might seek to impose if we are unreasonably found to refuse mediation, but we are confident that in a matter in which our clients are extremely confident of their position and do not consider there is any real prospect that your client will succeed, the rejection is entirely reasonable.”
Summarise these:
In particular HHJ Waksman QC made a number of key findings, including the following:
(i) This was an action of a typical kind where the allegation was whether a binding agreement had been made or not. It was a very fact-intensive and evidence-intensive exercise where the court would have to judge the credibility of the witnesses and look at the importance of contemporaneous documents. Accordingly, the defendants could in no way be certain that their position would be accepted by the court and this was, therefore, a case which was suitable for mediation.
(ii) This was not an all or nothing case on quantum where the parties would have to agree that if liability was established the obvious amount of damages was £X.
(iii) This was a case where there was ample room for manoeuvre within the range of possible quantum scenarios, thereby making it ideal for mediation.
(iv) The defendants rejected mediation on the basis of there being no middle ground on liability. The Judge decided that “to consider that mediation is not worth it because the sides are opposed on a binary issue, I’m afraid seems to me to be misconceived.”
(v) The defendants’ statement that they were confident that no agreement will ever be reached was rejected by the Judge, who stated: “Given the nature of this dispute, it does not seem to me to be realistic for someone… to say that all the odds are so stacked in his favour that there is really no conceivable point in talking about settlement. Indeed, if that had been his view then it is surprising that no application for summary judgment was ever made, which it was not.”
(vi) The defendants’ position that they had “extreme confidence” was not a reasonable position to take and nor was it a satisfactory reason to reject mediation.
(vii) The defendants maintained that there was considerable dislike and mistrust between the parties and that this was highly relevant to the decision not to mediate. The Judge commented that: “it is precisely where there may be distrust or emotion between the parties, which it might be thought is pushing them down the road to an expensive trial, where the skills of a mediator come in most usefully. They are well trained to diffuse emotion, feelings of distrust and other matters in order that the parties can see their way to a commercial settlement.”
(viii) This was not a case where there had been other settlement attempts made so that the party resisting mediation could say: “Well we’ve had very lengthy and detailed round table discussions, they have not gone anywhere and it’s not sensible to spend any more money on the case.”
(ix) In the Judge’s view: “Parties don’t know whether in truth they are too far apart unless they sit down and explore settlement. If they are irreconcilably too far apart, then the mediator will say as much within the first hour of mediation. That happens very rarely in my experience.”
Mason and others v Mills & Reeve (A Firm)
A very rare case: he defendant successfully defended a claim in negligence. Its refusal to mediate, on the grounds that the claimant’s case had been without merit, was held to be a reasonable refusal and no costs sanction was imposed.
