1. General Matters

Question 1

What does dealing with a case justly and at proportionate cost mean?

Answer 1

1. Ensuring parties are on equal footings and can participate fully
2. saving expense
3. dealing with a case proportionately, i.e.:

a. to the money valuie
b. to the importance
c. to the complexity
d. to the financial position

4. dealing with it expeditiously and fairly
5. giving an appropriate share of the court’s resources
6. enforcing compliance

Question 2

What is the overriding objective?

Answer 2

Enabling the court to deal with cases justly and at proportionate cost

Question 3

When does the overriding objective apply?

Answer 3

When the court exercises any power given to it by the Rules, or when it intereprets any rule.

Question 4

Are the parties bound by the overriding objective?

Answer 4

Yes, they are required to help the court further the overriding objective.

Question 5

What case management duty does the court have?

Answer 5

To further the overriding objective by actively managing the case?

Question 6

What is active case management?

Answer 6

1. Encouraging the parties to cooperate
2. Identifying issues ASAP
3. Prioritising the important issues
   4.Deciding the order of disposing with issues
4. Encouraging ADR
5. Encouraging settlement
6. Fixing timetables
7. Taking cost-benefit anaylsis of any step it proposes to take
8. Dealing with as many aspects of the case on one occasion
9. Dealing with the case without parties needing to attend
10. Making use of technology
11. Giving directions to ensure a quick and efficient trial

Question 7

What is the incentive to cooperate with the CPR?

Answer 7

The fact that there may be consequences as to costs when unreasonable behaviour is caused.

Question 8

What are some good examples of cooperation between parties?

Answer 8

Agreeing extension to period for filing defence, agreement to request stay for settlement, agreement on single joint expert, and the court can approve without a hearing proposals agreed by parties for management of multi-track proceedings.

Question 9

Can the court order parties to use ADR?

Answer 9

Yes.

Question 10

What discretion does a court have regarding claims brought in breach of an agreement to resolve a dispute by way of expert determination?

Answer 10

A power to stay

Question 11

What can the court order in regards to early neutral evaluation?

Answer 11

Its use.

Question 12

What are the advantages of ADR?

Answer 12

• The use of ADR will usually keep down costs, especially if used early and is non-adjudicative.
• It usually can occur very quickly
• There is a wider choice of arbitrator/mediator/independent evaluator
• There is a choice in the control of process to suit each parties needs
• There is flexibility in ADR’s process
• ADR is confidential
• A wider range of issues/outcomes may be considered
• ADR can assist in preserving a relationship between parties
• There is a problem-solving approach, rather than the entrenchment experienced in litigation
• Risk management, as there may be a prospect of success in litigation but to the extent that it is a toss-up

Question 13

What criteria may you use for the selection of an ADR option?

Answer 13

• How important is it to minimise costs? (Court-based mediation may be free, negotiation is cheaper than mediation, although negotiation, mediation, early neutral evaluation, or expert determination can be cost-effective)
• How important is fast resolution? (if important, non-adjudicative options may be better).
• How much control does the party want? (ADR is based on agreement so there is substantial control in non-adjudicative options)
• What are the main objectives of the party? (if it’s a sum of compensation, then any ADR may be appropriate. Cases involving non-pecuniary remedies may be better for non-adjudicative options)
• Is a future relationship important? (If so, then nonadjudicative may be better).
• Is the view of an expert important to key issues? (if s, then neutral evaluation or expert determination should be considered).
• Would neutral assistance be valuable? (parties in an adversarial process may find it difficult to admit defeat, even where better for them, so a mediator may help to discuss the pros and cons of your case more objectively).

Question 14

When may ADR not be appropriate?

Answer 14

• If a party requires a legal precedent, such as on an interpretation of a clause in a standard contract
• If a court order is important in the case (i.e. declaration of legal rights or technical order such as amendment of register of members of a company).
• Whether it is important to make an interim order
• Where evidential rules are important (such as where one party is not forthcoming with relevant evidence)
• The strength of the case (if a party believes that his case is strong and, as such, need not go to court (this belief must be objective), he may wish to go to court. However, the costs implications may be high and the strength of the case is only one factor to consider when refusing ADR. It may be appropriate in a very strong case to apply for summary judgment)
• If a case is particular complex (though this may lead to disproportionate costs, and so practical outcomes may be better, as achieved through ADR. Plus ADR could be a good way to control or better serve each party’s need in the case)
• High levels of animosity (although a skilled mediator or robust neutral evaluation may assist. Adr may be appropriate even where trust has broken down. Furthermore, court should not be used as a weapon of senseless war)
• Power imbalance (a non-adjudicative ADR process may not be appropriate where one party has more resources than the other, or may have improper control (i.e. through DV).
• Where the allegations are quasi-criminal
• Having their day in court (though this should be balanced against costs and success chances)
• Where enforcement may be an issue (though if enforcement might be an issue, ADR may be best used after issue of proceedings so the outcome can be recorded in a consent order that may be enforced more easily)

Question 15

What are the roles and responsibilites of key players in relation to ADR

Answer 15

The roles and responsibilities of key players are:
* To assist the court in furthering the overriding objective, which includes:
* A positive duty to assist the court in saving expense
* A duty to ensure that a case is dealt with expeditiously and fairly and in a proportionate way
* This applies to both interactions with the court but also between parties and the principals and their lawyers.
* Estimated costs for ADR should cover settlement negotiations, including Pt 36 and other offers, advising the client, as well as drafting a settlement agreement/Tomlin order.

Question 16

What are the main elements of the role of a lawyer in relation to ADR?

Answer 16

• Ensuring the client is aware of ADR alternaltives
• Providing objective information on relevant ADR options, including pros/cons, or giving advice on where to get further information
• Advising on pre-action obligations relating to consideration of ADR
• Advising the client on obligations relating to overriding objective on ADR
• Ensuring the client is aware of the penalties of unreasonable refusal to use ADR
• Giving appropriate advice on funding and costs re ADR, though this is not a barristers’ duty unless instructed so
• If adr is selected, getting instructions on the form of ADR, objectives to be achieved ect
• If adr is not selected, ensuring objective reasons are identifies and sufficient evidence of those reasons retains
• If appropriate, assisting the selection of a third party to conduct ADR
• Advising on strengths/weaknesses of a case as part of assessing a case of use of non-adjudicative ADR
• Considering and advising on offers in relation to non-adjudicative ADR
• Advising on and drafting terms of settlement

Question 17

What is the relevance of the Churchill and Halsey cases?

Answer 17

The court can direct the parties to consider ADR at a case management hearing (order approved in Halsey) and, as per Churchill, can now order parties to engage in ADR, or grant a stay.
The power to order a stay/direct adr can be exercised lawfully subject to these provisos:
The order did not impair the very essence of the claimants right to proceed to a judicial hearing and was proportionate to the legitimate aim of resolving it fairly, quickly, and at reasonable cost.

Question 18

What must happen before a case is allocated to a track?

Answer 18

Before the case is allocated to a track, the court will required the parties to file a directions questionnaire in form n181 (fast track and multi-track) or n180 (small claims track cases). The directions questionnaires require the representatives to confirm hey have explained to their client the need to try and settle the claim, the options available, and the possibility of a costs sanction.

During filling out of the form, each party can inform the court whether they would like a stay or explain why it’s not possible to do so right now. Parties are also asked whether they have complied with the full pre-action protocol and, if not, why not.

Question 19

Does the court have to accept the reasons given by the parties as to why they haven’t engaged in ADR/complied with the PAP?

Answer 19

The court does not have to accept the reasons by any of the parties for refusing to settle the action or considering adr. If the court considers those reasons to be weak and inadequate, it will direct the parties to attend a case management conference, to consider whether adr should be attempted. The court can direct the parties to attempt to settle by adr even if one party objects.

Question 20

What happens during a stay?

Answer 20

The power to stay can be exercised to stay until a specified date or event. When the stay no longer applies, the proceedings resume automatically from thestage reached before the stay. During a stay, no steps in the action are required or permitted. There is nothing to stop a party from complying w/ directions from before a stay was instituted but compliance cannot be enforced during this period.

Question 21

How long is a stay?

Answer 21

Any stay would last for a month unless a court extends this (it often does). Any extension will not be longer than for four weeks unless the court is provided with clear reasons to justify a longer one.

Question 22

On whose request can the court grant a stay?

Answer 22

The court can grant a stay of its own motion or at the request of one or more of the parties at any time. If the court has granted a stay at track allocation stage, then the case will not be allocated to the appropriate track until the end of the stay.

Question 23

Can the court act to allow parties to engage in adr without a stay?

Answer 23

Yes. In multi-track cases, the court can set a sensible timetable to allow the parties to take part in adr as the case progresses instead of granting a stay.

Question 24

What must happen if a stay for adr is attempted?

Answer 24

If a stay for adr is attempted, the parties must keep the court informed about the outcome. If this results in settlement, the parties will need to formally dispose of the court proceedings, perhaps by way of a consent order or a Tomlin order.

An application for a consent order to give effect to any settlement is treated as an application for the stay to be lifted. If no settlement is reached, the parties must apply to the court to lift the stay and ask for directions for the litigation.

Question 25

What can happen if a party unreasonably refused to consider ADR?

Answer 25

The court has a power to deprive a winning party of some or all of their costs if they have acted unreasonably in refusing to agree to ADR. A judge must not be particularly disposed to awarding costs against a public body for refusing to engage in ADR.

Question 26

What does Halsey say on costs for non-engagement of ADR?

Answer 26

The court has a power to deprive a winning party of some or all of their costs if they have acted unreasonably in refusing to agree to ADR. A judge must not be particularly disposed to awarding costs against a public body for refusing to engage in ADR.

The leading case of Halsey v Milton Keynes NHS Trust held that the general rule that costs follow the eventy should not be departed from unless it is shown the successful party acted unreasonably in failing to agree to use ADR. In doing so, the court will consider all the circumstances of the case, including (but not limited to):
* the nature of the dispute
* the merits of the case
* the extent to which other settlement methods have been attempted
* whether the costs of the adr process would be disproportionately high
* whether the delay in setting up and attending adr would have been prejudicial
* whether the adr process has a reasonable prospect of success.

Question 26

Is it unreasonable to refuse to go to adr where the defendant believes the claim to be a nuisance, unfounded claim?

Answer 26

IIf defendants face what they consider to be unfounded claims wish to contest them the courts are slow to characterise conduct as unreasonable as to deprive defendants of their costs if they are ultimately successful.

However, the courts have held that no defence, however strong, justified on its own a failure to engage in any kind of ADR.

A defendant who refused mediation where there was no merit but agreed to forgo its costs if the claim was dismissed is unlikely to be found acting unreasonably.

Question 27

When deciding whether a party acted unreasonably, will the court take into account any offers made?

Answer 27

The court will take into account the fact settlement offers have been made but have been rejected by the successful party. Furthermore, if reasonable offers have been made by the successful party and rejected by the unsuccessful party, this may show the unsuccessful party had an unreasonable view of the merits and therefore the successful party may not have been unreasonable in refusing to agree to it.

Question 28

Can a party offer without prejudice discussions instead of ADR?

Answer 28

Yes. It may not be unreasonable for a party with a strong case to refuse to engage in mediation where they offer without prejudice discussions and there was no good reason where that shouldn’t be tried, particularly where it was quicker and cheaper.

Question 29

Can a party refuse an alternate ADR process while already engaged in another?

Answer 29

It may not be unreasonable for a party where, while commencing JR proceedings where they are also pursuing a complaint to the independent adjudicator, they refuse mediation as adjudication is a form of ADR.

Question 30

Can a sucessful party be penalised even where they have made an effective part 36 offer?

Answer 30

A successful party may still be penalised in costs if they reject mediation, even if they have made an effective part 36 offer or unreasonably refused an offer made outside the regime of part 36.

Question 31

Can a party act reasonably in rejecting ADR close before a trial?

Answer 31

Yes. An example may include the fact that courts have found previously that parties have not been unreasonable in refusing mediation that was proposed two months before trial.

Question 32

Who is the burden on and what is the burden for on when a unsuccessful party may ask to reduce the successful party’s costs because of unreasonable behaviour?

Answer 32

The burden is on the unsuccessful party to show that an ADR process such as mediation would have had a reasonable prospect of success.

Question 33

In what situations has the court refused to penalise a party for refusing to agree to mediation?

Answer 33

• where the relationship between parties was so bad there was not a realistic prospect of success
• where there was ‘insufficient room for manoeuvre to make mediation a venture which might have real prospects of success in achieving compromise’
• where one party had a strong case and the conduct of the other party indicated that they were not willing to accept a nuisance payment and there was no evidence, even with a mediator, they would have settled a claim at that level
• where a party’s attitude/character was such that he was incapable of a balanced evaluation of the facts
• where the unsuccessful claimant’s case was unfounded and the defendant refused mediation/adr because they believed it had been proposed to extract a nuisance payment

Question 34

Are the factors in Halsey exhaustive?

Answer 34

No, all the facts and circumstances of the case must be considered.

Question 35

Is there a difference between failing to initiate ADR and refusing ADR?

Answer 35

The court makes a distinction between cases where the successful party rejects an offer of ADR and cases where there has been a failure by the successful party to initiate ADR.

In Vale of Glamorgan Council v Roberts, the court distinguished Halsey on the basis that those guidelines do not apply where the successful party merely failed to initiate ADR, and that it would go too far to disallow costs just because they did not initiate suggestions for mediation.

It may be different, however, if a party deliberately exaggerated the value of the claim and failed to initiate ADR. However, the court refused an adverse costs order against a successful claimant who had exaggerated his claim but did negotiate realistically and promptly to accept an offer.

A failure to engage in the pre-action protocol is likely to be visited upon with costs.

Question 36

In what circumstances is silence in the face of an invitation to ADR is unreasonable?

Answer 36

Generally, silence in the face of an invitation to ADR is unreasonable. There may be rare cases where ADR is so obviously wrong that subjecting silence to unreasonableness would be formalism, or where the failure to respond was a mistake the onus would be on the respondent to prove why they hadn’t responded.

The practice direction and preaction protocols also provide that a party’s silence in response to an invitation to participate might be considered unreasonable by the court and could lead to the court ordering that party to pay additional costs.

However, silence in the face of an offer to mediate where the parties were already undergoing a different form of ADR is not unreasonable.

Furthermore, no adverse costs order was made in a case of silence where a complex point of law needed to be decided and mediation would have served no purpose.

Recent developments have demonstrated the court is more sceptical about arguments raised retrospectively to justify refusal to engage in adr and that silence, as a general rule, is unreasonable, regardless of whether an outright refusal, or a refusal to engage in the type of adr suggested, might have been justified.

Question 37

What should a party do where it believes it should refuse an offer of ADR?

Answer 37

• do not ignore the offer
• respond promptly giving full and clear reasons as derived from Halsey as to why ADR is not appropriate. This should be in an open letter or in a letter marked without prejudice except as to costs
• if lack of evidence or information is an obstacle, this must be canvassed with the other party in correspondence, and consideration should be given to whether the evidence or information can be obtained before or during the adr process. If court proceedings have already commenced, a judge may be prepared to make an order against a recalcitrant party directing further information to be disclosed
• letters replying to requests to engage in adr should be written with care. Correspondence should not be written in a way that closes off exploration of adr processes at a later date.

Question 38

Can a party decide on ADR before a dispute?

Answer 38

An advance commitment in a contract may provide for the timing of ADR. A clause may set out which ADR method, who to approach, and what steps to take before litigation. Provided this is sufficiently clear and is contractually binding, a court would likely enforce the clause. Alternatively, a party can make a general commitment to use ADR.

Question 39

What are the advantages of pre-selecting ADR options?

Answer 39

• easier to make an agreement to deal with a dispute constructively before a dispute
• provides more control re proportionate actions
• pre-selection gives more certainty to the actions to take to resolve a dispute
• a person can be identified in advance
• easier to ensure confidentiality
• easier to maintain a constructive approach

Question 40

What are the advantages of early ADR?

Answer 40

• best time to save costs
• adjudicative ADR is effectively a direct alternative to litigation and so should be selected early
• non-adjudicative adr is most effected if incorporated in a case quickly
• adr may assist in clarifying issues even if no settlement
• a constructive approach may lead to non-entrenchment by parties.

Question 41

What are the disadvantages of early ADR?

Answer 41

• time and money may be wasted
• unsuccessful adr may exacerbate the dispute
• may be difficult to evaluate the case properly
• the adr process may be used tactically rather than genuinely

Question 42

What obligations are there re ADR at the pre-action stage?

Answer 42

There are obligations to consider the use of adr at the pre-action stage, which need to be taken seriously lest an adverse costs order is made. Essentially, each party should consider and make or respond to a proposal for the use of ADR at the pre-issue stage.

Question 43

What obligations are there re ADR on issue of proceedings?

Answer 43

There is a general need to review the position on ADR before issuing proceedings, and this can be done so soon after issue too in completing the directions questionnaires.

Question 44

What will the directions questionnaire ask re ADR?

Answer 44

The directions questionnaire makes it clear the court will want to know steps taken in relation to settling the case, with the representatives asked to confirm that ADR options and the possibility of cost sanctions have been discussed.

Question 45

What may happen re ADR once the direction questionnaires have been filled in?

Answer 45

On the basis of statements of case and the questionnaires, the judge can make a decision about appropriateness of ADR. The judge can ask for further information. Upon allocation to multi-track, the court will give case management directions, including directions relating to use of ADR. It is desirable that, where appropriate, proposed directions include directions to enable mediation such as disclosure to allow for mediation, with further directions for the event that no settlement is reached.

Question 46

How may the court look to facilitate adr use?

Answer 46

The majority of cases in which proceedings are issued settle before trial. Furthermore, processes such as disclosure and use of expert evidence can be aimed at what might facilitate an ADR process.

Additionally, interim orders can be used to support ADR through:
* ordering that a party/their representative attend court, and this may be used to support the use of ADR
* on application for an interim order, the court may give directions to support the use of ADR
* the court can order a preliminary trial of an issue if the rest of a case might then settle
* a court can give specific guidance, alongside reminders about potential cost implications if guidance is not followed
* an order may support the use of adr in complex cases
* several models for interim orders have been developed to support adr, for example for a party to give a witness statement as to why adr is not appropriate

Question 47

When is it reasonable to refuse adr?

Answer 47

It may be reasonable for a party to refuse to agree to use adr until after a key court decision, such as the consideration of a strike out app.
It may be reasonable to refuse adr before issues are clarified in statements of case or before witness statements are available.
However, it is not inherently reasonable to refuse adr until after all of the stage of litigastion up to and including the exchange of witness statements, so long as steps could have been taken to facilitate earlier adr use.

Question 48

What factors should be taken into consideration when deciding whether ADR is appropriate at a particular time?

Answer 48

Several factors need to be taken into consideration when deciding on the timing of the use of ADR. The decision on whether ADR is appropriate at a particular time is an objective one as regards how the case should most appropriately be pursued.
The factors to take into consideration include:
* the overriding objective (whether the case can be dealt with justly and proportionately, by saving expense, and by dealing with it expeditiously and fairly. Perhaps also the fact of allocating an appropriate share of the court’s resource)
* the position regarding costs
* the timeframe for reaching resolution (if it’s swifter for ADR)
* whether the issues are sufficiently clear
* the availability of information (which does not need to be formal evidence)
* the availability and importance of evidence (where issues are strongly contested/there is a low level of trust, it may be necessary to wait for exchange of evidence to use ADR. Full evidence need not be had, so long as the client can make an informed decision. Also, evidence needs to be available for adjudicative adr, however, so this may affect whether it should be used.)
* the importance of interim applications (an adjudicator may have some powers to make one, but mediator cannot make one so in cases going to mediation an interim order may have to first be sought)
* the strength of a case