The ball's in your court…or is it?
Can I be forced to mediate and reflections on how to make the most of ENE
Introduction
Whilst the courts have long encouraged parties to resolve disputes via mediation, judges were unable to order them to do so – until now.
On 29 November 2023, the Court of Appeal decided in Churchill v Merthyr Tydfil County Borough Council that judges do have the authority to order parties to pursue mediation, as long as they take into account whether that is proportionate and whether it will adversely impact a claimant’s right to a court hearing.
Alternative Dispute Resolution ('ADR') is something all litigants need to bear in mind – the Civil Procedure Rules, which govern the conduct of claims, set out the court's expectation that parties should make every effort to settle their case before it is heard by the court – but charities are perhaps particularly motivated to pursue ADR. The Charity Commission's 'CC38: Charities and litigation, a guide for trustees' provides that:
Whilst ADR is therefore always 'front of mind', and in many cases does lead to early resolution via mediation, some claims develop in a way which means mediation may not be suitable.
'Unless time constraints for bringing or responding to an action prevent it, the commission will expect trustees to explore and, if appropriate, rule out all other reasonable options open to them to resolve the issue, such as alternative dispute resolution or agreeing a legal compromise.'
How might this fit in with the Churchill decision? Here, we consider how the courts might actually approach 'compulsory mediation', and put this into the context of other Alternative Dispute Resolution ('ADR') options such as Early Neutral Evaluation.
I'm considering ADR – what are my options?
Mediation is just one possibility for those looking to resolve a dispute before trial. One important alternative – or something to pursue further down the line, should an early mediation fail – is Early Neutral Evaluation ('ENE').
Mediation and ENE have some similarities, but important differences:
- Mediation involves an independent mediator carrying out 'shuttle diplomacy' ie going back and forth between the parties exchanging offers. Mediators' styles vary, but as a rule they are acting as a facilitator, trying to bring the parties closer together (with concessions on both sides) in order to arrive at a mutually agreeable outcome. At least until now, mediation sits outside the court process; mediators have no formal standing and the parties make their own arrangements at whatever stage of the claim they choose. Anything discussed at mediation remains confidential between the parties and the mediator so a judge does not know what happens at mediation or what was aid, only that there was a mediation.
- Early Neutral Evaluation (like its sister process 'Financial Dispute Resolution' or FDR) is generally court-assisted, involving a judge who will not be involved the case going forward. It can take place either on paper, or in person at Court. If on paper, the parties will provide the judge with position statements and a bundle. At Court, the parties generally conduct a 'mini trial' in the morning, exchanging submissions but there is no cross-examination or experts.
There is therefore an important distinction between the two, in that mediation is primarily facilitative, and ENE evaluative: a judge tells the parties who they think is more likely to win.
The outcome is that the judge considers the matter and gives as far as possible their view as to how they see the merits of the case and what they would decide were they hearing the matter at trial. The parties then use the judge's remarks as a springboard for negotiation (often with the judge remaining available to assist if needed).
There is therefore an important distinction between the two, in that mediation is primarily facilitative, and ENE evaluative: a judge tells the parties who they think is more likely to win. Depending on the type of case and the type of claimant, this can mean that a case is more likely to settle at ENE than at mediation, or vice versa.
Can I be forced to mediate?
Until recently, judges were able to order parties to undergo ENE or FDR against their will but, because of the way case law had developed, were not able to make a similar order to mediate. In November 2023, however, the Court of Appeal changed the position:
The court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made does not impair the very essence of the claimant’s right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
The Court of Appeal's decision means that judges can now order parties to mediate and can impose sanctions if they fail to do so, in the same way that parties can be sanctioned for breaching the court order.
'Non-court-based dispute resolution process' includes mediation. The Court of Appeal's decision means that judges can now order parties to mediate and can impose sanctions if they fail to do so, in the same way that parties can be sanctioned for breaching the court order.
One unresolved question is what sanctions will be imposed if a party is ordered to mediate and refuses to do so. Would there be a purely financial consequence? Would staying the claim until the parties do mediate, or even striking out the claim completely, constitute 'impair[ing] the very essence of the claimant’s right to proceed to a judicial hearing'?
What if I don't want to mediate?
This decision is relatively new and it will be some time before we get a sense of how often parties will actually be 'forced' to mediate if they do not want to. Much will depend on the circumstances of the individual case and the party or parties' reason(s) for refusing, of which some are better than others:
- There are occasionally parties who resist any form of ADR because they believe strongly that they will win at trial and therefore that there is no reason for them to make any concession at all.
This is risky. As noted above, the Civil Procedure Rules require parties to consider whether ADR would be suitable in their case and, if asked, to provide evidence showing that ADR was considered. The Rules also say expressly that unreasonable refusal to consider ADR can be a factor when it comes to costs orders.
Therefore, even if the party who refuses to pursue ADR does win at trial, the court may still penalise them by limiting the amount of costs they are entitled to recover from the losing party.
- Sometimes parties feel that ADR is unlikely to succeed until later in proceedings, for example after disclosure and/or witness evidence has been exchanged. The court may well be receptive to this as long as the parties make clear that they do intend to attempt ADR before trial and they genuinely think the prospects of mediation succeeding will be enhanced at a later date.
- The purpose of ADR is to further the overriding objective of resolving cases 'expeditiously and fairly' and at 'proportionate' cost. In some cases, although they are likely to be rare, the cost of a formal mediation involving mediator, barristers and solicitors is not proportionate to the value of the claim or the cost of going to trial (for example if the trial is one day or less). An alternative in this situation would be to propose a cheaper alternative such as a solicitor-only roundtable meeting.
- Sometimes it is clear from correspondence that the parties are a long way apart on the facts and/or the law. This will mean very different risk assessments and therefore views on what would constitute an acceptable settlement. Mediation, which focuses on negotiation rather than argument and counter-argument about the merits, may not be the best way to close that gap.
The best way of averting a 'forced mediation' is likely to be proposing an alternative.
One school of thought is that, in practice, judges will be reluctant to order mediation if any or all parties are opposed to it. Mediation is most likely to succeed when all parties want it to work and are prepared to make concessions if necessary to achieve that. Imposing mediation on a party against their will may simply make them even less prepared to cooperate and less open to settlement, in all likelihood rendering the mediation a waste of time.
However, given the Civil Procedure Rules' emphasis on ADR, the best way of averting a 'forced mediation' is likely to be proposing an alternative.
Why choose Early Neutral Evaluation?
ENE can be better suited to some cases than others. The judge in an ENE will not review disclosure in detail or hear live witness evidence, so may be reluctant to express a firm view on disputed facts.
A claim for rectification or construction of a will, for example, generally involves relatively limited documentary and witness evidence. A judge is therefore likely to be able to review all the papers within the time allowed and feel able to indicate how the trial judge will apply the law to that evidence.
Similarly, 1975 Act claims sometimes involve limited dispute about the underlying facts; the claim focuses on how those facts should be balanced against each other and mapped onto the size of the estate. This is an evaluative exercise which is well-suited to ENE or FDR.
However, even in case where facts are disputed, there can be a psychological aspect to ENE which can lead to a breakthrough where mediation would have failed.
ENE can play an important role where a party is unable or unwilling to accept fundamental legal or factual problems with their case.
Probate claims are sometimes seen as not suitable for ADR because they tend to revolve around witness and expert evidence, which cannot be tested in an ADR context. But ENE can play an important role where a party is unable or unwilling to accept fundamental legal or factual problems with their case. Emotions can run particularly high in probate claims; often, family members are not only convinced that right is on their side, but reluctant to listen to arguments to the contrary from solicitors representing 'the enemy'.
This can be a real barrier to mediation if the family member therefore believes their case is many times stronger than it is and refuses to contemplate settling within the charity's more realistic parameters. The more formal process of attending court for an ENE, and hearing an independent judge express the same factual/legal doubts about their case, can be an important 'wake up call'.
ENE can also be used creatively. In a recent case, for example, Withers successfully proposed a 'binding ENE', akin to an arbitration: the parties agreed to abide by the judge's indication rather than proceeding to trial.
Top tips
- Alternative dispute resolution can (and should) be attempted in every case, but that does not always mean mediation. Sometimes another form of ADR will be more appropriate.
- ENE is used most often to get a judge's view on discrete points of law, but it can also be useful psychologically where a party has a poor case (legally or factually). The party may well refuse to acknowledge the problems when pointed out by solicitors, but listen to a judge.
- If there is a gap in the evidence, a judge will be less likely to give a firm indication. An ENE will therefore be most productive if it takes place after the parties have exchanged all factual/witness evidence. In some claims this may be relatively early; in a probate claim it is likely to be several months into proceedings.
Key contact
Rosalind Russell
Associate | London