ADR and the Courts
If you are thinking about taking a case to court, or if you are responding to court action by someone else, you need to give some thought to ADR. It is government policy to encourage people to try to resolve a dispute before taking it to court.
This is what you need to know:
Legal Aid
The Funding Code is the guide to how and when you might get legal aid. It has two main provisions which promote the use of ADR, a carrot and a stick:
- Many forms of ADR, such as ombudsman schemes or community mediation, are free to the complainant. Where there is a cost, as with commercial mediation or arbitration, your solicitor or advisor can claim this as a disbursement under Legal Help or under a Legal Aid certificate. Section 3C – 049 to 054
- Funding for representation may be refused if there are ‘complaint systems, ombudsman schemes or forms of ADR which should be tried before litigation is pursued’. Criterion 5.4.3. This does not affect funding for legal help – this means that you can get legal aid to pay for advice and initial help from your solicitor or legal adviser, but legal aid for you to take your case to court might be refused if you haven’t considered ADR.
Pre-action protocols
Pre-action protocols set out a step-by-step procedure for trying to clarify and resolve disputes before making an application to court. There are a total of ten Pre-action protocols covering different topics such as housing disrepair and personal injury claims. There is also a general practice direction that covers pre-action conduct in every other type of dispute. Each protocol (except for construction disputes) has a section which requires both sides to think about whether they could use some kind of ADR to settle the dispute before going any further.
The pre-action practice direction states:‘Starting proceedings should usually be a step of last resort, and proceedings should not normally be started when a settlement is still actively being explored. 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 (see paragraph 4.4(3)).’
This means that you may need to provide evidence to the court that you have thought about whether some form of ADR might be helpful. The practice direction gives four types of 'ADR' as an example:
- Discussion and negotiation
- Mediation
- Early neutral evaluation
- Arbitration
For example, if you haven’t tried mediation, and the judge thinks mediation might have been suitable, you will need to give a good reason why you thought it wouldn’t work in your case. If you can’t do this, you may find that the court will order you to pay the other side’s costs, even if you have won the case.
Civil procedure rules
Courts are required to ‘actively manage cases’, and the Civil Procedure Rules state that this means ‘encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate, and facilitating the use of such procedure.’ This means that a judge may suggest that you should try mediation if he or she thinks it might help in your case. The judge can't force you to use mediation if you don't want to. If you agree, the date of your court hearing may be postponed so that mediation can take place. Civil Procedure Rules Part 1.4
When deciding on costs, courts must take into account 'the efforts made, if any, before and during the proceedings in order to try to resolve the dispute'. In practice this has meant that if you refuse to mediate, and the judge thinks that your refusal is unreasonable, you may end up paying the other side’s costs, even if you win the case (see the next section on 'Court cases'). Civil procedure Rules S 44.5 (3)
Court cases
The most important case on using ADR is the The Halsey Case 2004. The judgement offers guidance on how courts should approach ADR, including the statement that ‘all members of the legal profession who conduct litigation should now routinely consider with their clients whether disputes are suitable for ADR’.
The judgement makes two key things clear:
- Courts cannot compel parties to use mediation or another form of ADR, as this would be contrary to article 6 of the European Convention on Human Rights.
- Courts can deprive a winning party of the costs of the case, if they have unreasonably refused to consider mediation or ADR. It is up to the losing party to show that the winning party was unreasonable.
July 2009
