Is compulsory ADR coming?

Monday 9 August 2021

On 12 July 2021, the Civil Justice Council (CJC) published its report on compulsory alternative dispute resolution (ADR) following the Master of the Rolls requesting the same in January 2021.

ADR is an umbrella term used to describe methods used to attempt to resolve a dispute without needing to go to a final court hearing; including (but not limited to) negotiation, mediation, arbitration and expert determination.

The report is a shift from the judgement given in the case of ‘Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002’, which established that whilst the court can encourage the parties to engage in ADR, they were unable to compel those who were unwilling.

Halsey has been updated by recent case law which has applied the same precedent, but has gone further to penalise any party who unreasonably refused ADR with a punitive costs order.

The CJC have now found that mandatory ADR is compatible with Article 6 of the European Convention on Human Rights (the right to a fair trial) and therefore seemingly, lawful. As such, additional steps will now be taken to determine which claims will be subject to compulsory ADR in the future.

Legal professionals have long known the benefits of attempting to resolve a matter via ADR prior to litigating in court. Typically, and most importantly, these include less time and costs being expended by the parties if a settlement can be agreed.

However, it should be noted that there are situations when a settlement is extremely improbable, meaning ADR is likely to achieve little other than to increase costs and delay a final decision on the dispute.

The courts are also increasingly becoming alive to litigants “exploiting” ADR processes for tactical and strategical reasons and will penalise such conduct in costs irrespective of the outcome at trial.

By removing the parties’ discretion as to whether to engage in ADR, the CJC are seemingly adopting a one size fits all approach, which may well benefit the majority of cases but could leave some with a delay in resolution and increased costs.

However, what is very clear is that ADR is unlikely to become an option and will become mandatory in the not too distant future. Litigators and their clients should welcome this with open arms.

If you have any questions about alternative dispute resolution and whether this could be an option for you, please contact a member of our Dispute Resolution team via email or on 0113 207 0000.