Over the last year or so the role of Alternative Dispute Resolution (ADR) in the UK civil justice system has been increasingly under the spotlight. Advocates of compulsory ADR have been vocal in their support for out-of-court resolution options becoming a fully embedded, mandated part of the court system, rather than an alternative to it. Recent developments (both at home and abroad) do suggest a move towards a civil justice system which places out-of-court resolution at its heart, with dispute resolution no longer viewed as an “alternative” but rather a central part of the judicial process.
The case for compulsion
Foremost amongst the advocates in favour of compulsory ADR is Sir Geoffrey Vos, who, since becoming Master of the Rolls and Head of Civil Justice in England and Wales in January 2021, admits to "have been sounding off on this subject quite a bit". Sir Geoffrey views the role of judges as having evolved to the point where “We are not just there to referee a fight, we are there to break it up”.
Under Sir Geoffrey’s direction, the CJC prepared a report, Compulsory ADR, which analysed (beyond the limited extent to which the system already does so in certain areas): (i) whether parties to a civil dispute can be compelled to participate in ADR (the “Legality” question); and (ii) if yes, in what circumstances, which kind of case and at what stage (the “Desirability” question).
The CJC concluded that:
- Re Legality – “appropriate forms of compulsory ADR, where a return to the normal adjudicative process is always available, are capable of overcoming the objections voiced in the case law and elsewhere and could be introduced” (the most notable objection being that compulsory ADR may breach Article 6 where it places an “unacceptable obstruction” between parties and the courts, as noted by the Court of Appeal in Halsey v Milton Keynes General NHS Trust  1 WLR 3002)
- Re Desirability – in relation to the key objections commonly raised against compulsory ADR, most notably (i) that it is antithetical to the voluntary nature of ADR and might not work (because the parties are unwilling to engage) and (ii) that it undermines the purpose of the court in dispensing justice (which is the foundation on which effective ADR ultimately relies): “(W)e think we have identified conditions in which compulsion to participate in ADR could be a desirable and effective development. In doing so we recognise that the compulsory ADR processes which are already part of the civil justice system…at a number of points are successful and are accepted."
While stopping short of making detailed proposals for reform, the CJC report did make three specific observations on compulsory ADR:
- Where it is suitable and effective and involves no expense of time and money, it won’t usually be controversial;
- Particularly if there is sufficient regulation and it is made available in short, affordable formats;
- Greater use of compulsory, judge-led ADR processes will likely prove acceptable given, in the contexts in which they already compulsory, they are free and appear effective.
Further to the CJC report, in August 2021 the Ministry of Justice issued a "major call for evidence" seeking feedback on how disputes might be settled away from the court room, including questions relating to making ADR compulsory. In March 2022 the MoJ published its Summary of Responses, which noted a “mixed” response to compulsory ADR; the majority of supportive responses coming from the consumer and public services sector, insurers and mediators/mediation bodies, especially in civil cases, while the legal profession, academia and the advice sector were largely opposed. While, again, the Report didn’t make policy proposals/recommendations, it was said to “inform the government’s developing work on how to utilise dispute resolution processes”.
Amongst the criticisms which may be aimed at compulsory litigation are:
- That it may simply add to the costs of litigation and create further procedural hoops for the parties to jump through, without materially increasing the likelihood of an out-of-court settlement. In theory, the CJC’s endorsement of compulsory ADR is subject to the caveat that it is only justified where the obligation imposed is proportionate to the dispute. In practice, in many cases (particularly high value, complex commercial cases between sophisticated parties) compulsory ADR, particularly very early in the process may simply add costs without realistically increasing the chances of settlement. It may even result in parties’ positions becoming more entrenched early in the process, such that a settlement later on is more difficult than it might otherwise have been.
- That, post-Halsey, an unreasonable refusal by a party to a dispute to adequately consider ADR is likely to be penalised in costs, so the current rules are sufficient. Lawyers already know that litigation ought to be a last resort, and that ADR should be considered both pre-action and throughout proceedings. It is not clear therefore how making dispute resolution “compulsory” will change things. Parties which have no intention to settle are likely to only pay lip service to “compulsory” ADR, attending any mandated ENEs/settlement discussions without any intention of settling, while incurring the minimum of expense in doing so. Where compulsory ADR could be useful, however, is in smaller disputes between less sophisticated parties, including those involving litigants in person, who may not appreciate the importance of early engagement in ADR processes (which may partly explain the decision to pilot the SCPD in a limited number of small claims courts before considering extending it to the Business & Property Courts).
- That a push to compulsory ADR could lead to a “settle at all costs” culture that makes lawyers afraid to fight, giving clients a raw deal. Where one party has a strong case, relative to the other, it may be that they would get a better settlement further down the line (whether post-disclosure, witness statements or expert reports) than they would were they forced to settle pre-action, before more of the strength of the respective parties’ positions have been established.
- That some categories of claim are or may be impossible to settle. It is difficult, if not impossible, to imagine compulsory ADR being applied/applicable to freezing orders, claims relating to fraud or persons unknown, insolvency claims and various other types of claim. The SCPD does expressly exclude certain types of claims (notably personal injury and housing disrepair small claims) and it is likely that, were the scheme to be extended to the Business & Property Courts, there would need to be several carve-outs for claims to which compulsory ADR would/could not apply.
Compulsion in action
Even before the pandemic the English civil justice system was under strain, for reasons including budget cuts, court closures and greater claim volumes. It is in this context that the £1 billion promised by the Chancellor in his Autumn 2021 Budget to increase HMCTS’s capacity and efficiency (including over £200 million to complete the court reform programme by 2024-25) should be viewed.
Key to this domestic court reform programme is limiting the number of matters of disputes which require judicial involvement (and which ultimately proceed to trial), central to which is the ADR process. Amongst the tangible changes already underway/in place are:
- The Small Claims Paper Determination Pilot (SCPD), introduced in the 143rd PD Update. The SCPD will operate for two years from 1 June 2022 until 1 June 2024 (unless extended) in six pilot courts: Bedford, Luton, Guildford, Manchester, Staines and Cardiff. It will enable courts to direct that small claims (excluding claims outlined in PD 51ZC, such as personal injury small claims and housing disrepair cases) be determined without a hearing, without requiring the agreement of all the parties.
- The Master of the Rolls’ core proposal for a new streamlined online system, targeted initially at the “bulk end of the market” but with the potential to be extended to commercial disputes in the Business and Property Courts, which incorporates compulsory dispute resolution processes at multiple points throughout the court process.
- The Civil Justice Council's proposed reform of the civil pre-action protocols, most notably its proposal to make mandatory the parties’ good faith obligation to try to narrow or resolve a dispute in order to even commence proceedings.
At an international level, as we summarised recently, there is considerable support within the UK mediation community for the ratification of the Singapore Convention. If ratified, the Singapore Convention would likely streamline the mediation enforcement process; opening up a direct route to the enforcement of a contract without first having to obtain a judgment/arbitral award, and ultimately bolstering the reputation and effectiveness of the UK’s dispute resolution options.
Where to next?
One of the difficulties of analysing the role and future direction of ADR in the civil justice system is that it is very context specific. How and when to employ compulsory ADR is hugely dependent on the type and nature of the claim in question; what may be effective in one area may be detrimental in another.
Ultimately, there is no “one size fits all” answer to whether ADR should be made compulsory. Its relevance and effectiveness must be considered in the context of the different categories of civil claim.
What is clear, however, is that there is a real push for ADR to be a central part of the court process, with compulsory dispute resolution a requirement, rather than an option, in appropriate circumstances. It is difficult to see this process reversing any time soon.