Alternative dispute resolution (ADR) during COVID-19

With the court doors having shut to a number of litigants following the outbreak of Coronavirus, now more than ever parties and their lawyers are turning their minds to alternative dispute resolution (ADR). There are plenty of forms of ADR which can be conducted effectively during this crisis, including virtual mediation. ADR remains a powerful tool for concluding cases swiftly and at comparatively minimal cost which in this time of uncertainty is crucial.

The Jackson ADR handbook joins the CPR and the Chancery Guide in making clear that judges and parties must consider ADR prior to and at all stages of litigation with a view to achieving the new Overriding Objective of enabling the court to deal with cases justly and at proportionate cost.

Para. 8 of the Practice Direction on Pre-Action Conduct provides: “Starting proceedings should usually be a step of last resort… Although ADR is not compulsory, the parties should consider whether some form of ADR procedure might enable them to settle the matter without starting proceedings. The court may require evidence that the parties considered some form of ADR.”

While not perhaps compulsory in a literal sense any party refusing or ignoring an offer of ADR is running a very great risk with regards to the costs of the litigation.

The Practice Direction at paragraph 8.2 goes on to summarise some of the options for resolving disputes without litigation:

1. Discussion and Negotiation;

2. Mediation (a form of negotiation with the help of an independent person);

3. Early Neutral Evaluation (where an independent person, for example a lawyer or an expert on the subject, gives an opinion on the merits of the dispute and now sometimes confusingly used judicially to refer to a quasi-FDR hearing); or

4. Arbitration

Alternatives to the conventional court hearing

1. Mediation

Costs, as ever, will be modest compared with full-scale litigation but requires attendance by parties and their advisors at a mediation. “In person” mediations tend to involve each of the parties and their respective advisors sitting in separate rooms and the mediator shuttling between the rooms. If both parties agree the mediator may conduct what is known as a “ joint session” where all the parties get together to discuss an aspect of the case or set out their positions (in practice the joint session has in large part fallen out of favour where the parties are known to each other but is still popular where they are not). When a mediation is conducted remotely, the parties and their advisors will connect via a video conference which the mediator can simply join. 

When assessing the suitability of mediation, the following factors should be considered per Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002, where the Court of Appeal suggested:

1. The nature of the dispute;

2. The merits;

3. Failure of other settlement attempts;

4. Costs of mediation;

5. Delay; and

6. Whether any prospect of ADR succeeding.

2. Arbitration

Arbitration requires the parties to enter a binding agreement whereby they nominate a mutually agreed arbitrator to determine the case finally. It is a complete alternative to litigation. This is particularly attractive in the wake of the pandemic. The parties are free to design a process that is proportionate and appropriate to their case; they can choose the arbitrator, the timetable, the venue (which at the present time is likely to be online), the level of disclosure and the nature of the hearing and procedure (for example one could decide to dispense with oral evidence). An arbitration award is binding and like a court order is only appealable in certain circumstances and thus it brings finality which is not guaranteed with mediation. Indeed an arbitration award is in some regards less vulnerable to appeal than an order of a Court.

3. Remote Hearings

In the wake of the Coronavirus pandemic, the courts have been trying their best to adhere to the government’s social distancing guidelines whilst at the same time carrying on “business as usual”. The Lord Chief Justice has issued guidance in respect of civil and family hearings which makes clear that the courts will try and conduct hearings remotely using video or telephone facilities or by paper. Contested hearings will be conducted remotely if they can but this may not always be possible or practical. In practice the courts are adjourning trials but judges are still willing to conduct directions hearings and pre-trial settlement hearings remotely.

4. Early Neutral Evaluation (“ENE”)

ENE is a term which has come to mean two distinct things. Before it was a court process it was always understood to be an option whereby a neutral lawyer, sometimes a retired judge, (or perhaps surveyor in some property disputes) would provide the parties with an independent assessment on a non-binding and without prejudice basis. It is particularly well suited to claims and cases where there is little or relatively little dispute as to the facts. The evaluator will be chosen by the parties and will be a specialist in the area concerned thereby giving confidence to the parties.

Contact Fortitude Chambers to discuss this or any other legal issue with our barristers.