ADR: Can it really be compulsory?

The Civil Justice Council has recently published its report on the issue of compulsory ADR in civil proceedings in which it concludes that mandatory ADR is to be "encouraged".

The report considers two key questions of legality and desirability in the context of the Court of Appeal judgment in Halsey v Milton Keynes [2004] 1 WLR 3002, which rejected the idea of mandatory ADR. That case, however, has been considered and criticised subsequently – and the Civil Justice Council set up a working party to look at the issue. The final report recommends a change to the status quo.

Can the parties lawfully be compelled to participate in an ADR process?

In the Halsey case, the answer was ‘no’, on the basis this would "impose an unacceptable obstruction on their right of access to the court". The judgment also relied on the European Court of Human Rights' judgment in Deweer v Belgium [1980] 2 EHRR 439 in its conclusion that compulsory mediation was "likely" to be contrary to Article 6 of the ECHR (right to fair trial).

The working party disagreed, and gave examples of areas where compulsory participation in ADR is already required by the civil procedure rules in England and Wales (e.g. some family and personal injury proceedings). The working party also looked at recent decisions of the European Court of Justice where it had been held that compulsory pre-action dispute processes were not contrary to the fair trial right as they served a legitimate purpose and the mandatory nature of the process was a proportionate means by which to achieve the purpose of those processes. It concluded in its report that introducing compulsory ADR (whether through a procedural rule or the empowerment of the court to make an order) was compatible with Article 6 of the ECHR, as long as there were appropriate safeguards. In particular, that the form of ADR should not be disproportionately onerous, and should not in any way foreclose the parties' access to the court.

Is it desirable to have forms of compulsory ADR?

In the Halsey case, the court again said ‘no’, on the basis it was not for the court to compel ADR, only to encourage it. There were concerns that where there was reluctance to participate (assuming parties might be resistant to engaging in a process forced upon them), the effectiveness of the process itself was questionable and would achieve nothing except added costs and delay to the process. There was also a concern the use of mandatory ADR could undermine the value of the adjudication process.

The working party again disagreed and found the concerns expressed in Halsey were not supported by what happened in practice. It concluded compulsory ADR could be desirable and effective for the right types of claim, as long as the parties always had access to the adjudicative process. The working party was also supportive of judge-led ADR.

What next?

The report is a starting point and there will doubtless be more consultation. It echoes views already expressed by Sir Geoffrey Vos that ADR should not be seen as "alternative", but an integral part of the dispute resolution process. Questions remain. Which forms of ADR will be appropriate for what types of claims? Will a form of compulsory ADR place a disproportionate burden on time and resources of litigants? What measures will be put in place to deal with reluctant participants? Will it reduce or increase overall costs? At what stage of the proceedings should the parties engage in ADR? The working party accepted that, having concluded compulsory ADR was both lawful and desirable, some guidance would be needed on factors relevant to determining whether, in a specific case, parties should be ordered to engage in a compulsory ADR process. Further clarity would be needed as to what sanctions would apply in the case of non-compliance. There is, of course, risk that if ADR was to be made compulsory it may be seen (as it is in other jurisdictions) as a procedural hurdle rather than a meaningful process and sanctions would, therefore, be important.

It is likely that the Rule Committee will now review the civil procedure rules in light of these findings. We agree an increased emphasis on exploring opportunities for settlement is a welcome development. It is also important the focus on compulsion should not overshadow the value of all forms of commercial dialogue aimed at resolving disputes outside of the court process. What is certain is there is support for a change in how other forms of dispute resolution are viewed and it may well be that, for litigants, having ‘your day in court’ will become something of a novelty. 

Andrew Howell is a partner, UK head of disputes & investigations, and global co-head of our international disputes group with Taylor Wessing: taylorwessing.com