ADR

Question 1

What is the law relating to a party’s obligation to consider ADR?

Answer 1

CPR 1.4(2) encourages the use of ADR

Para 8, PDPAC the parties are obliged to consider whether some form of ADR might enable them to settle their dispute, without commencing proceedings.

Para 14, PDPAC the court may decide that there has been a failure for the parties to comply with PDPAC, where they have unreasonably refused to use a form of ADR.

Para 4.10(9), PD29 the court may give directions requiring the parties to consider ADR.

Question 2

What guidelines will the court follow to determine whether a party has unreasonably refused to consider ADR?

Answer 2

Halsey v Milton Keynes NHS Trust:

Consideration will be given to:

1) the nature of the dispute,
2) the merits of the case,
3) the extent to which other settlement methods have been attempted,
4) whether the costs of the ADR would be disproportionately high,
5) whether any delay in setting up and attending the ADR would have been prejudicial, and
6) whether the ADR had a reasonable prospect of success.

Question 3

If a party believes that they have a watertight case, is this sufficient to refuse ADR?

Answer 3

Swain Mason v Mills & Reeve:

Yes. This demonstrates that the party has sufficiently considered ADR. The party is not obliged to partake in ADR.

Question 4

What happens if a party agrees to ADR but causes the ADR to fail due to taking an unreasonable position?

Answer 4

Earl of Malmesbury v Strutt and Parker:

Where a party causes the ADR to fail, due to taking an unreasonable position, they will be treated the same as the person who unreasonably refused to engage in ADR.

Further, under Thakkar v Patel:

Where a party frustrates the process by delaying or dragging their feet (without good reason), then that conduct will merit costs sanctions.