Alternative Dispute Resolution (ADR) and the Court

Failing to attempt to compromise the claim carries risks which are only just becoming understood. This note looks at the duty to attempt to compromise a claim and the courts’ approach to parties who fail to do so. Although other forms of ADR, such as expert neutral evaluation (ENE) are used to resolve disputes, in most cases mediation is the form of ADR employed. For this reason, this note focuses on the duty to mediate.

The use of ADR is on the increase. Given the Department of Constitutional Affairs’ commitment to the Treasury to cut the number of civil and commercial cases in the courts by 200,000 by April 2006, ten per cent of the cases annually in the High Court and the County Courts, there will have to be an increased use of ADR, and in particular mediation. ADR orders, such as those made in the Commercial Court, strongly encourage parties to mediate. Such an order was made in Shirayana Shokosan Company Limited -v- Danovo Limited (2003) and the wording of the order was endorsed by the Court of Appeal in Halsey -v- Milton Keynes NHS Trust (2004), although they preferred the less robust wording devised by Master Ungley used in clinical negligence cases. The encouragement and facilitation of mediation by the courts has been strongly endorsed and clearly will continue.

The Court of Appeal in Halsey has made it clear that the courts will not order an unwilling party to mediate and there are circumstances in which a party can reasonably refuse to do so. Noting the European Court of Human Right`s cautions approach to any interference with a party’s right of access to a court under Art 6 ECHR, the Court of Appeal concluded that it is likely that compulsion of ADR would be regarded as an unacceptable constraint on the right of access to the court. Even were that not to be the case, they found it difficult to conceive of circumstances in which it would be appropriate to compel a party to use ADR.

Halsey makes clear that a party with a watertight case can reasonably refuse to mediate and will not be penalised in costs for doing so. Tactical requests for mediation by claimants, particularly those with weak or small claims against public authorities affected by the Government’s pledge in 2001 to use ADR in all suitable cases, will not be looked on kindly by the courts.