Recent changes have been made to the Civil Procedure Rules in the latest phase of developments to integrate methods of non-court based dispute resolution into the court system.
The changes have been introduced following the Court of Appeal judgment in Churchill v Merthyr Tydfil [2023] EWCA Civ 1416. Churchill provided authority that courts have the power to stay civil proceedings to compel parties to engage in non-court based dispute resolution processes. While there are no set rules to govern where ADR is suitable the Court of Appeal set out relevant factors to determine suitability.
The new changes weave into the existing rules provisions that expressly signpost and encourage the use of ADR. These include requirements being placed on the Court to consider whether to order, and to encourage parties to participate in, ADR for fast-track, intermediate track and multi-track claims.
Parties will be required to give such matters clear consideration at the case management stage and can expect the Court to be engaged in discussing non-court resolution at various stages in the case. Arguably the rule changes will have (and need to have) as much effect on the judiciary as on practitioners. Until now the encouragement of ADR by the judiciary has been patchy.
The rule changes include:
· CPR 1.1 (2)(f) – The overriding objective of dealing with cases ‘justly and at a proportionate cost’ has been expanded to include an obligation for ‘promoting or using [ADR]’.
· CPR 1.4(2)(e) – a court’s duty to actively manage cases now includes ‘ordering or encouraging the parties to use, and facilitating the use of [ADR]’.
· CPR 44.2(5)(e) - when considering the question of costs the court, along with other factors such as the conduct of a party, will have regard to whether a party failed to comply with an order for ADR or unreasonably failed to engage in ADR proposed by another party.
A further point of note is that the draft rule changes published in April referred to an unreasonable failure to ‘participate’ as opposed to ‘engage’, as now appears. Is there any significance to the change in wording? It appears not. The minutes to the Civil Procedure Rule Committee meeting that considered the changes suggest that the alteration was simply to be consistent with the use of ‘engage’ elsewhere in the rules and not a subtle change in approach.
A key feature of mediation is the confidentiality of the process and the fact mediation privilege is recognised by the courts – what goes on in mediation stays in mediation.
It will be interesting to see if parties in the future are tempted to make costs applications to try to ‘open up’ the mediation process to criticise an opponent for their failure to properly engage.
If so, such attempts should be resisted. A key principle recognised in Churchill was that while the court can mandate attempts at trying to settle in mediation it cannot force a party to settle its case. For the court to retrospectively enter the arena and consider parties’ conduct during the mediation process risks undermining this principle, as well as making parties more guarded in a process which relies on there being safe space to have potentially constructive discussions.
Would it be possible though for a party to make an application to criticise an opponent for a lukewarm response to mediation itself? For example, what about a party that merely gives some initial consideration to the process but isn’t actually willing to attend a meeting, or one that sets so many requirements as to time, place and mediator that it frustrates the process? Could it be said that such approaches amount to ‘engagement’ or not?
Time will tell. The culture change sparked by the Churchill decision and the CPR changes will no doubt have an impact on a greater number of cases than the likely few in which such arguments are raised.
Moving forwards advisers and the parties need to be prepared for the Court to question what has been done or will be done about non-court dispute processes at case management conferences, and to build-in this step in the case timetable. The Courts need apply the rules consistently.
Nick Parker is a mediator and member of ASWM
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