From 01 October 2024, the Civil Procedure Rules (CPR) (the Rules that govern all civil disputes in England and Wales) have been amended to include a requirement for the parties to engage in Alternative Dispute Resolution (ADR).
The overriding objective of the CPR now includes:
“promoting or using Alternative Dispute Resolution” and the court’s case management duty is extended to include, “ordering or encouraging the parties to use, facilitating the use of, Alternative Dispute Resolution”.
In respect of costs, Part 44 of the CPR has been amended to include, “whether a party has failed to comply with an order for ADR or unreasonably failed to engage in ADR”.
ADR is not precisely defined but will include all non-court based methods of dispute resolution including mediation, arbitration and without prejudice settlement meetings.
The amendments to the CPR follow the Court of Appeal decision in Churchill v Merthyr Tydfil County Borough Council (2023) EWCA CIV 1416.
In that case, which involved the encroachment of Japanese Knotweed, Mr Churchill sought to issue proceedings and engaged in pre-action correspondence. The Council advised Mr Churchill to use their complaints procedure and if he did not they would be applying to the court for a stay and for their costs.
Mr Churchill issued proceedings in nuisance against the Council and did not follow their complaints procedure.
At first instance, the Council duly obtained a stay in order that the parties could engage in ADR following the decision in Helsey v Milton Keynes General NHS Trust (2004) EWCA CIV 576.
The Court of Appeal stated that it was possible to stay proceedings for the parties to engage in a non-court based dispute resolution process provided that the stay did not impair the very essence of the Claimant’s right to proceed to a judicial hearing and was proportionate to achieve the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
In the circumstances, the CPR will expect parties to engage in ADR as well as the other parts of the overriding objective which include dealing with cases (a) justly and at proportionate costs; (b) within a reasonable time; and (c) by proportionate use of court and parties’ resources.
The existing pre-action protocol expect the parties to have exchanged early disclosure items in order that they can understand each parties’ position and try to settle the issues without proceedings including the consideration of ADR.
In certain circumstances, despite the requirement to engage in ADR and to consider ADR both before the issue of proceedings and throughout, in many cases a Claimant will have little choice but to issue proceedings in order to preserve its position or if required to obtain urgent relief such as with regard to injunctions and judicial reviews.
Notwithstanding, parties must have regard to the new changes to the CPR. In particular, an unreasonable failure to engage in ADR is likely to have costs consequences whether a party ultimately wins or loses.
Should you require any further information regarding commercial, civil or property litigation matters, please do not hesitate to contact Mr Bill Dhariwal on DDI: 01489 864 117 or E: bill.dhariwal@lawcomm.co.uk
The contents of this article do not constitute legal advice.
