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Civil Litigation > Pre-Action Conduct and ADR (W2) > Flashcards

Pre-Action Conduct and ADR (W2) Flashcards

1
Q

Adjudicative ADR options

A
  • Arbitration
  • Med-arb
  • Expert determination
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2
Q

Non-adjudicative ADR options

A
  • Negotiation
  • Mediation
  • Early neutral evaluation (ENE)
  • Conciliation
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3
Q

C1-001: What are the Practice Direction and Pre Action Protocols?

A

Explain the conduct and steps the court would normally expect parties to take before commencing proceedings.

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4
Q

C1-002: Objectives of Pre-Action Conduct and Protocols

A

So the court have sufficient information to:

(a) understand each other’s position
(b) make decisions about how to proceed
(c) try to settle without proceedings
(d) consider ADR
(e) support efficient management of proceedings
(f) reduce costs of resolving dispute

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5
Q

C1-003: Pre-Action Conduct and Protocols Proportionality

A
  • Must not be used as a tactical device to secure an unfair advantage over another party
  • Costs incurred by following them should be proportionate. Where they are disproportionate, they will not be recoverable.
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6
Q

C1-004: Steps before issuing a claim in court

A
  • Where there is a relevant pre-action protocol, parties should comply with it.
  • Where there is not, parties should comply proportionately with the Practice Direction
  • Claimant should write to defendant with concise details of claim
  • Defendant should respond in a reasonable time: 14 DAYS in a straight forward case, NO MORE THAN 3 MONTHS in a very complex one.
  • Parties should disclose key documents relevant to issues in dispute
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7
Q

C1-004: what should the claimant’s details of claim include

A
  • basis on which the claim is made
  • summary of the facts
  • what the claimant wants from defendant
  • if money, how the amount is calculated
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8
Q

C1-004: what should the defendant’s response include

A
  • whether the claim is accepted
  • if not: reasons why
  • explanation as to facts and parts of the claim that are disputed
  • whether the defendant is making a counterclaim
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9
Q

C1-005: Experts

A
  • The court must give permission before expert evidence can be relied upon
  • The court may limit the fees recoverable
  • Parties should consider using a single expert jointly instructed, with costs shared equally
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10
Q

C1-006: Settlement and ADR

A
  • Litigation should be last resort
  • Parties should consider ADR
  • Parties should continue to consider possibility of settlement at all times, incl. after proceedings issued
  • If proceedings are issued, parties may be required to provide evidence that ADR has been considered.
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11
Q

C1-008: Compliance with the Practice Direction and Protocols

A
  • Court will take into account non-compliance when giving directions for arrangement of proceedings and when making orders for costs
  • Court is not likely to be concerned with minor or technical infringements, esp. when the matter is urgent
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12
Q

C1-008: When may the court decide there has been non-compliance?

A

When a party has:

(a) not provided sufficient information
(b) not acted within a time limit
(c) unreasonably refused to use ADR or failed to respond to an offer to do so

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13
Q

C1-008: What can the court order for non-compliance?

A

(a) parties are relieved of obligation to comply/further comply
(b) proceedings are stayed
(c) sanctions are to be applied

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14
Q

C1-008: Examples of court sanctions for non-compliance

A

(a) order that party at fault pays costs
(b) order that party at fault pays costs on indemnity basis
(c) if party at fault is claimant that has been awarded money, order depriving that party of interest for a specified period or awarding interest at a lower rate
(d) if party at fault is defendant and claimant has been awarded money, an order awarding interest at a higher rate

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15
Q

C1-009: Limitation

A

If a claim is issued after the relevant limitation period has expired, the defendant will be entitled to use that as a defence to the claim.

If proceedings are started to comply with statutory time limit before the parties have followed Practice Direction procedures, parties should apply to court for a stay so they can comply.

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16
Q

C2-001: Personal injury Protocol

A
  • Likely to be allocated to the fast track
  • If at any stage the claimant values the claim at more than the upper limit of the fast track, claimant should notify defendant as soon as possible
  • Where one or both parties consider the Protocol not to be appropriate to the case, the court will expect an explanation as to why it has not been followed/been varied
  • Where either party fails to comply, court may impose sanctions. Consider whether they have complied in substance and the effect of non-compliance on the other party.
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17
Q

C2-002: Reasonable response (personal injury)

A

Protocol recommends that defendant be given 3 months to respond to a claim before proceedings are issued. May not always be possible, so as soon as practicable.

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18
Q

C2-006: Letter of Notification (personal injury)

A
  • if they wish to notify defendant before sending detailed Letter of Claim
  • should advise defendant of any relevant info available
  • does not start the timetable for the Letter of Response
  • should be acknowledged within 14 days of receipt
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19
Q

C2-007: Rehabilitation (personal injury)

A
  • parties should consider as early as possible whether claimant has reasonable needs that could be met by medical treatment/rehabilitation and discuss how these needs might be addressed
  • any immediate needs assessment/report obtained for rehabilitation purposes shall not be used in litigation except by consent and the person conducting them will not be a compellable witness at court
  • consideration of rehabilitation should be an ongoing process
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20
Q

C2-008: Letter of Claim (personal injury)

A
  • C should send D 2 copies
  • should be sufficient info for D to assess liability and estimate likely size of the claim
  • clear summary of facts on which claim is based and nature of injuries suffered, and way in which these impact on C’s day to day functioning
  • once sent, no further investigation on liability should be carried out within the Protocol period until a response is received from D as to whether they dispute liability
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21
Q

C2-010: Response (personal injury)

A
  • Must reply within 21 calendar days of the date of posting the letter identifying the insurer
  • Where there has been no reply by D/insurer within 21 days, C entitled to issue proceedings and compliance will be taken into account when assessing D’s costs
  • D will have a max of 3 months from date of acknowledgement of Letter of Claim to investigation and should reply by no later than end of that period stating if liability is admitted
  • where accident occurred outside England and Wales and/or where D is outside the jurisdiction, time periods are extended to 42 days, and 6 months.
  • If D denies liability, their version of events should be supplied and any material documents
  • Any admission made by any party under the Protocol may be binding on that party in litigation
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22
Q

C2-011: Experts (personal injury)

A
  • encourages joint selection of experts
  • promotes practice of C obtaining a medical report, disclosing it to D who then asks questions and/or agrees it
  • before any party instructs an expert, they should give the other party a list of the name(s) of one or more experts whom they consider are suitable to instruct
  • if they obtain medical reports through medical agency rather than dr/hospital, other party’s consent to this should be sought and list of names provided
  • within 14 days of providing a list of experts, the other party may indicate an objection. If expert is named in Letter of Claim, party has a further 14 days after the 21 day period has expired.
  • if D objects to all listed experts, parties may then instruct experts of their own choice and it will be for the court to decide if anyone acted unreasonably
  • questions put to the expert should be put within 28 days of service of the expert’s report and should only be for clarification
  • costs of the report will usually be paid by instructing first party and costs of questions by the party which asks them
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23
Q

C2-013: Negotiations following an admission (personal injury)

A

Before proceedings are issued, C should send D:

  • medical reports
  • schedule of past and future expenses and losses, with as much detail as reasonably practicable

C should delay issuing proceedings for 21 days from disclosure of the above unless such delay would cause claim to become time-barred to enable attempted settlement.

CPR Part 36 enables Cs and Ds to make offers to settle pre-proceedings. Parties should always consider if it is appropriate to make a Part 36 offer before issuing proceedings. Party making offer should provide sufficient info to enable offer to be properly considered.

24
Q

ADR: Negotiation

A
  • Communication process intended to reach a compromise/agreement
  • The starting point when trying to resolve a dispute
25
Q

ADR: Mediation

A
  • Intended to facilitate resolution of disputes through impartial 3rd party
  • Generally, each party will be present, usually with legal representatives, in different rooms.
  • Mediator will move between rooms delivering settlement offers and guiding each party to reflect on the offers
  • Mediator has no authority to make any decision which is binding on the parties
  • Confidential
26
Q

ADR: Arbitration

A
  • Dispute resolved by impartial adjudicator
  • Decision agreed will be final and binding
  • Long and formal process governed by rules and statute
  • Privacy
  • Flexibility
  • Ability to choose a specialist to determine the dispute
27
Q

When are the two stages at which the question of whether to arbitrate arises?

A

(a) When negotiating a contract, may decide to include an arbitration clause to cover disputes that arise in the future
(b) When a dispute has arisen

28
Q

ADR: Med-arb

A
  • Parties agree that initially they will try to resolve dispute by mediation
  • If this does not reach a satisfactory resolution, the matter will move on to arbitration
29
Q

ADR: ENE (Early neutral evaluation)

A
  • Independent party is appointed by the parties
  • Independent party provides a non-binding assessment of the matter(s)
  • Parties have to pay their costs
  • Impartial opinion might influence the parties in further settlement discussions
  • Independent party will usually be an ‘expert’
30
Q

ADR: Expert determination

A
  • An independent expert on the subject matter is appointed by the parties
  • An inquisitorial process which ends in a binding determination.
  • The procedure is determined by contract between the parties
  • Powers of the expert are usually set out in a separate ‘terms of reference.’ The expert has no authority to make an order as to costs unless the parties grant them it
  • Suitable for disputes requiring technical knowledge
  • May not be suitable if parties wish to be fully heard and there are issues of credibility
31
Q

ADR: Conciliation

A
  • No clear meaning but involves an independent neutral 3rd party helping parties to resolve their dispute
  • Often forms part of a statutory scheme or other regulatory scheme which provides who the conciliator should be and the process involved (unlike mediation, where these matters are purely a decision for the parties)
32
Q

Reasons to use ADR

A
  • Court expects parties to act reasonably in considering and engaging in ADR
  • Preserves/creates better relationship between parties, can explore emotional dimensions if needed
  • Greater privacy/confidentiality
  • Less disruption e.g. in searching for documents, attending court
  • Greater range of solutions/outcomes
  • Can agree a settlement that reflects risks to both sides
  • Parties have greater control over the process
  • Greater involvement of the parties, more opportunity to have their say
33
Q

Cases not suitable for ADR

A
  • Need for urgent court-granted relief (e.g. an urgent injunction)
  • Relationship between parties makes it difficult for them to agree anything at all
  • Court’s involvement needed to ensure appropriate evidence is obtained
  • Legal precedent needs to be established
  • Need for a court order
  • Dispute concerns public law rights
  • Multi party dispute and the court’s powers to join various parties and/or claims are needed
34
Q

Other provisions which have implications for ADR being considered

A
  • Guidance accompanying Precedent H (costs budget) states that the following should be included in the budget: (i) settlement negotiations and advising the client on them, (ii) drafting a settlement agreement/Tomlin order, (iii) advice to the client on settlement
  • Directions Questionnaire (Fast/multi track) requires legal representatives to confirm they have explained to clients the need to try to settle, the settlement options and possible costs sanctions. Parties must state why settlement might not be achieved at this stage in proceedings.
  • At a case management conference, the court is likely to want to know what steps the parties have taken to explore ADR.
35
Q

How can the court encourage parties to consider ADR?

A
  • Provide information about ADR
  • Encourage parties to engage in ADR
  • Make an order as to costs
  • Order a stay so parties can explore ADR
  • Direct the parties to consider ADR and require an explanation of the parties’ thinking
36
Q

Ordering a stay so the parties can explore ADR

A
  • Directions Questionnaire (Fast/multi track) includes the option to request a stay for settlement
  • If all the parties request a stay, or the court considers it appropriate, a stay of 1 month will usually be granted
  • This period can be extended by the court, e.g. on the application of the parties (CPR 26 PD 3.1)
  • Extensions will generally be for no longer than 4 weeks and may only be ordered by the court.
  • If no settlement is reached by the end of the stay, the claim will be allocated to a track and/or appropriate directions given by the court for the future conduct of the claim (CPR 26 PD 3.2).
  • If settlement is reached within the stay period, the claimant must notify the court (CPR 26.4(4)/26 PD 3.4)
  • A stay following DQS is common but the court has the power to stay the proceedings at any stage.
37
Q

Halsey reasonableness factors: where the successful party in the litigation would normally be entitled to its costs but that party has refused to engage in ADR

A
  • Burden of proof on the unsuccessful party to show why the court should depart from the general rule on costs
  • (a) Nature of the dispute - how suitable it is for ADR
  • (b) Merits of the case - a refusal to engage in ADR may be more justifiable if the party believes its case to be very strong. This only applies if the party’s belief has reasonable grounds.
  • (c) Extent to which other settlement methods have been attempted e.g. Part 36 offers
  • (d) Whether the costs of ADR would be disproportionately high
  • (e) Whether any delay in setting up and attending the ADR would have been prejudicial - particularly if it is very close to trial
  • (f) whether ADR had a reasonable prospect of success
38
Q

Other considerations raised by Halsey

A
  • It is about whether a party should be penalised for refusing to engage in ADR; the court does not take the same approach when considering what consequences should be for a party who has simply failed to suggest ADR. The court will not refuse to award costs simply because the successful party did not positively suggest ADR.
  • Silence in the face of an ADR offer is likely to be considered unreasonable and sanctioned
39
Q

What should a party do upon receipt of an offer to engage in ADR?

A

(a) Consider with its legal advisors the merits of the offer;
(b) Respond promptly in writing, setting out reasons for its decision, noting the principles in Halsey;
(c) If it does not wish to engage in ADR, explain in what different circumstances it would agree to ADR;
(d) Make that letter with ‘open’ or ‘without prejudice save as to costs’
(e) Consider making a separate note of any reasons for refusal that it is unwilling to express to the opponent at that time, a form of which can be later shown to the court if necessary

40
Q

Court’s direction for the parties to consider ADR

A

“At all stages the parties must consider settling this litigation by any means of Alternative Dispute Resolution (including Mediation); any party not engaging in any such means proposed by another must serve a witness statement giving reasons within 21 days of that proposal; such witness statement must not be shown to the trial judge until questions of costs arise”

41
Q

Closest that the court can get to compulsion to partake in ADR: directions potentially suggested for the Commercial/Mercantile Court

A

“On or before [] the parties shall exchange lists of 3 neutral individuals who are available to conduct ADR procedures in this case prior to []… Failing such agreement by [] the parties either to agree a short list of 3, or to send to the Court their lists (limited to 3), for the Court to select the neutral individual or panel with all parties being bound by that selection.
The parties shall take such serious steps as they may be advised to resolve their disputes by ADR procedures before the neutral individual or panel so chosen by no later than []… If the case is not finally settled, the parties shall inform the Court by letter… what steps towards ADR have been taken and (without prejudice to matters of privilege) why such steps have failed. If the parties have failed to initiate ADR procedures the Case Management Conference is to be restored for further consideration of the case.}”

42
Q

Mediation contract clauses

A
  • Some commercial contracts include mediation clauses.
  • Historically, ADR clauses have been difficult to enforce as agreements to negotiate were too uncertain to be enforceable
  • Cable & Wireless v IBM: held that as parties had identified a particular and well-known procedure from an ADR service provider, there was sufficient certainty
43
Q

Free mediation service

A
  • All claims for less than £10,000 which would normally be allocated to the small claims track (CPR 6.26) will be referred to a free and confidential small claims mediation service operated by HMCTS
  • The referral will only be made by the court if all parties indicate on the directions questionnaire that they agree to mediation (CPR 26.4A)
44
Q

Mediation: confidentiality

A
  • Genuine negotiations aimed at settlement will attract without prejudice privilege and therefore be protected from use as evidence in proceedings
  • Privilege may only be waived by all parties
  • Common practice for mediation agreements to state that the mediator cannot be called to give evidence
  • Confidentiality, unlike privilege, cannot be waived without the mediator’s agreement
  • There are limited circumstances in which the court can permit evidence of confidential matters even if one or more parties does not agree
45
Q

Mediation - preparation

A
  • Agree and prepare mediation bundle, often incl. case summary
  • Parties will often exchange position statements
  • Separate note might be prepared for the mediator but which is not to be shared with the other party
  • Solicitor should carry out analysis and advise on legal alternatives if the case does not settle, incl. prospects at trial and costs, and help explore what might be an acceptable settlement as well as discuss and advise on who should attend: ideally a representative of each party with authority to settle and lawyers
46
Q

Mediation - Introduction and joint session

A
  • Each party is likely to make an opening statement
  • The mediator will generally make an opening address dealing with:
    (a) Objectives of the mediation
    (b) His/her neutral role and impartiality
    (c) Procedural rules
    (d) Confidentiality and privilege
    (e) Status of any agreement reached
47
Q

Mediation - Break out sessions

A
  • Mediator moves between rooms. Needs to be clear whether info can be shared or is confidential
  • Client should play lead role in mediation
  • Legal representative should be to help identify settlement opportunities and to assist in risk assessments, sometimes known as BATNA (best alternative to a negotiated agreement) and WATNA (worst alternative to negotiated agreement)
48
Q

Mediation - Outcomes

A

(a) Settlement of all issues - Settlement agreement will be drawn up, usually by solicitors. Some mediation agreements provide that they will not be binding until it is reduced to writing and signed by both parties
(b) Settlement of some issues and provision for dealing with remaining issues
(c) Parties decide to terminate the mediation and use alternative means to settle
(d) Mediator decides to terminate process

49
Q

Mediation - Enforcement of the settlement agreement

A
  • Will depend on whether or not it arose in the context of ongoing litigation
  • If proceedings have already been issued, the agreement can be incorporated into a ‘consent’ order and enforced as a court order
  • If it was agreed before proceedings were issued, then it will need to be enforced as a contract
50
Q

ENE - Further considerations

A
  • A judge can provide an ENE in relation to a dispute before the court if asked to do so (CPR 3.1(2)(m))
  • Likely to be particularly useful in disputes where one party has an unrealistic view of its prospects of success
  • No procedural requirements beyond those agreed by the parties
51
Q

Difference between arbitration and expert determination

A
  • The Arbitration Act 1996 does not apply to expert determination; the process is based on agreement between the parties
  • The court has no supervisory role in expert determination
  • Court is only likely to get involved to provide interpretation of provisions of the agreement or if there is a dispute about whether the expert has acted in accordance with the agreement; such proceedings will generally be commenced under Part 8 procedure
  • An expert can be liable for negligence/breach of contract
52
Q

Consequences of a party commencing proceedings despite an expert determination agreement covering the dispute

A

(a) Innocent party may be entitled to damages for breach of contract
(b) Court might stay the proceedings. Burden is on the party who wants to avoid the stay to justify why the claim should be allowed to continue despite the agreement (DGT Steel and Cladding v Cubitt Building)

53
Q

Circumstances where it might be acceptable to not comply with the pre-action protocol/Practice Direction

A

(a) Where a limitation period is about to expire - might have to issue proceedings before time to comply. Parties must comply to the extent possible and will ordinarily apply for a stay
(b) Where there is another reason for urgent proceedings or element of surprise e.g. application for a search order

54
Q

When does the Pre-Action Protocol for Personal Injury claims apply?

A
  • To personal injury claims
  • which do not fall under another pre-action protocol
  • and which are likely to be allocated to the fast track (a value of up to £25,000 – the ‘spirit’ of the protocol should also be followed in higher value claims)
55
Q

When does the Practice Direction apply?

A
  • To all cases

- But where a specific protocol applies, that overrides any conflicting provisions in the PD

Civil Litigation (20 decks)

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