ADR – The Changing Landscape of Dispute Resolution

As featured in PI Focus January 2025

Author Tim Wallis[1]

Our work in Dispute Resolution and Alternative Dispute Resolution is changing and it will continue to do so. In the personal injury and clinical negligence sector we have acquired the skills which enable us to deal with change and we shall need to keep deploying them. This article will examine recent changes concerning ADR with reference to this sector, outline how the term “ADR” is used today, review the likely impact of the recent changes and chart the future direction of travel.

Churchill and the CPR changes

Churchill v Merthyr Tydfil CDC[2]

This well reported Court of Appeal decision establishes that, subject to safeguards, the court can order the parties to engage in ADR.

CPR amendments, October 2024[3]

These recent amendments, give CPR “teeth” to Churchill. The addition of ADR to the Overriding Objective is significant and the amendments regarding Active Case Management, General Powers of Management, Directions and Costs/conduct[4] are important to anyone dealing with personal injury or clinical negligence claims. These amendments can be seen as a signal to the judiciary, as well as to practitioners and court users, about how ADR will be used.

To put these major changes in context, they were preceded by the integration of mediation into the procedure for Small Claims in the CPR. The Ministry of Justice have indicated that the possibility of extending that integration to higher value claims will be kept under review. Further, the delays in the civil courts are considerable and seem unlikely to improve quickly.

What does “ADR” mean today?

Before seeking to assess the impact of these changes on practitioners and court users, it may be useful to outline how “ADR” is used today. It is a very broad term, as set out in the Glossary to the CPR, and, because it increasingly encompasses a range of settlement methods or processes, the description the “ADR Toolkit” is often used. ADR can be taken to include the most common method of settlement, namely negotiation, be that by phone, e mail, in-person discussions, or joint settlement meetings. Similarly, it would include another popular settlement tool: Part 36. Often, however, ADR is used to describe an evolving range of non-traditional, non-binding settlement processes, including mediation and neutral evaluation. This range of processes is continuing to evolve and now includes:

• Facilitative Mediation. The type of mediation usually used in this jurisdiction at present. The mediator, a specialist neutral, facilitates communications and negotiations between the parties who then arrive at their own settlement.
• Evaluative Mediation. Here, the specialist neutral may, if facilitative negotiations break down, and by agreement with the parties, also provide an opinion on the likely settlement/outcome. A variation is a “Mediator’s Proposal”: if a facilitative mediation reaches impasse, the specialist neutral may, by agreement, propose a likely settlement figure or range based on what she has learned in the mediation.
• Neutral Evaluation. This is where the parties decide (or are ordered) to ask a trusted, experienced, specialist neutral to evaluate the likely outcome at trial. (The proposed Department of Health (DoH) scheme for clinical negligence claims with a value of less than £25,000 plans to use neutral evaluation.)

The above processes are non-binding. The decision to settle (which mostly occurs when these processes are used for personal injury and clinical negligence claims) rests solely with the parties.

Arbitration, in contrast, is adjudicative and produces a binding result. It is a private form of dispute resolution by an arbitrator acting in a quasi-judicial manner and is governed by the Arbitration Act 1996. Arbitration has not been commonly used in this sector, but there is increasing interest on online arbitration for lower value personal injury road traffic claims (Claims Portal and OIC claims).

There is then a further nuance: these various processes can be used in combination. Examples:

• Med-Arb is where arbitration follows if mediation does not reach resolution.
• Neutral evaluation with mediation denotes a process of neutral evaluation where the evaluator discusses the evaluation with the parties and then turns mediator to help achieve a settlement.

Further information about processes is available online.[5]

A footnote on nomenclature. The “A” in ADR is becoming redundant. Non-traditional ADR has now been integrated into the justice system, woven into the fabric so to speak. So, all settlement approaches, as well as trial, could be said to come within “Dispute Resolution”, but it would probably not be helpful to use that phrase that way. In Churchill, the court used “non-court-based dispute resolution” but that is regarded as problematic because much ADR is in fact court-based. For now, “ADR” lives on, at least in the view of the Civil Procedure Rule Committee and the editors of the White Book.

The impact of the Churchill and CPR changes: 1. Knowledge of ADR Practice is required

The need for practitioners, the judiciary and court users to understand the full extent of the ADR toolkit is highlighted by out of court remarks by Lady Chief Justice Carr. Commenting on the court’s case management powers following Churchill the Lady Chief Justice said:

“… judges are increasingly likely to be called upon – further to the requirement to manage cases – to consider whether to mandate the use of ADR. And not just to consider the question of whether to do so, but also the broader question of which form of dispute resolution to mandate.”

“…the parties will need to play their role. They will need to consider, constructively and further to the CPR’s overriding objective, which process might best suit their circumstances. They will need to inform the court of this view. And, as importantly, judges will need to be familiar with the different forms and their features, so that they can properly assess which is best-suited.”[6]

The impact of the Churchill and CPR changes: 2. Future judicial approach

It would be premature to assess how these changes will be applied by the courts in the future, but there are some early signs. The courts have continued apply costs sanctions where parties have refused mediation[7] and have encouraged parties to mediate for a second time where the first mediation did not result in resolution.[8]See also:

The impact of the Churchill and CPR changes: 3. ADR orders in respect of costs budgets, directions and detailed assessments

ADR can be used for discreet issues as well as a resolution of the entire case, as is apparent from the following cases.

In Hadley v Przybylo[9] Master Victoria McCloud ordered the parties to a personal injury claim to engage in ADR regarding a high value, complex, disputed costs budget. (They did so successfully and agreed all but one item.)

In both Worcester v Hopley and Jenkins v Thurrock Council[10] the focus was on the appropriate order for costs where the claimants’ costs budgets were significantly reduced at a Costs Management Hearing following after a CCMC. The purpose in arranging these hearings separately was to facilitate further discussion and negotiation about budgets. The parties did not do this to the court’s satisfaction and in both cases the claimant suffered adverse costs consequences.

In Elphicke v Times Media Ltd, Master McCloud ordered pre-detailed assessment ADR:

“137.I shall include a provision of my own motion that the parties must engage in alternative dispute resolution as to the costs claimed by the Defendant. Good reason will need to be shown if the form of that dispute resolution is at any less engaged a level than mediation via Costs Lawyers given that the Bill here more than justifies Costs Lawyer input. ….. Any party which decides not to engage in ADR, as above or to ‘call it off’ must be in a position to justify that non-engagement to the Costs Judge and be alert to the provisions of CPR 44.11 and indeed the developing common law since Churchill.”[11]

Considering the current court delays in dealing with such procedural matters and the Overriding Objective as amended, there is considerable scope here for the use of ADR to facilitate the agreement of matters such as directions, budgets and costs bills.

The impact of the Churchill and CPR changes: 4. Knowledge of case law is required when making decisions about ADR

The settlement strategy for each case will need to consider how to use ADR and practitioners will be accountable for their decisions. They need to be prepared to provide written reasons consistent with case law.

The CPR does not specify which forms of ADR parties should use and traditional methods will doubtless be acceptable where they result in resolution within an appropriate timescale. If timely resolution is not achieved, however, such methods may not always be regarded as sufficient. For example (and note here that many pre Churchill cases on ADR will continue to be applicable) in Hickman v Blake Lapthorn[12] the court noted that mediation “… is more likely to be effective than the simpler process of negotiation by discussion and offer and counteroffer”. Also, in Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd (No 2)[13] there had been a face-to-face meeting and a “without prejudice save as to costs” offer, but the court said this was “neutral or marginally in (the refusing party’s) favour in its impact in assessing the refusal to mediate.”

It is always helpful to bear in mind that reasons given not to proceed with ADR are subject to scrutiny by the court. “We are too far apart on liability/quantum” and “The parties have each has made a Part 36 offer and stand by them” are instances of arguments rejected by the courts. 13 [14]

The likely direction of travel – Pre-Action Protocols

The Civil Justice Council Review of Pre-Action Protocols[15] recommends rule changes with a view to parties trying to resolve disputes or narrow issues pre-issue. It seems likely that these recommendations will be implemented. If this comes about, those dealing with claims pre-issue will need to become familiar with the ADR options which they should be considering for each case, how to test them with a cost-benefit analysis and how to deploy them to best effect. For many insurers and defence organisations such changes will require a significant re-appraisal of how they deal with claims.

The likely direction of travel – the Digital Justice System (DJS) and Online Dispute Resolution (ODR)

Sir Geoffrey Vos has outlined his vision for a DJS[17] which has the following objectives:

1. To increase access to justice by allowing claims to be resolved quickly and at proportionate cost online and where possible without the need for legal proceedings.
2. To allow claims to be resolved more efficiently, at lower cost and more quickly.
3. To allow the dispute resolution process to achieve greater transparency and openness – to demystify the complexities of dispute resolution.[18]

His idea, applied to this sector, is to connect the Claims Portal, the OIC Portal, mediation and arbitration portals, and dispute resolution portals that private enterprise can create and has already created. These portals will connect with each other and the courts. The focus will be on pre-proceedings ODR and the application of the full range of ADR processes. The standards, values and rules to enable this transformation will be set by the Online Procedure Rules Committee.

The likely direction of travel – AI

The changes referred above are significant, but nothing like as fundamental as those which will be bought about by AI. AI applications will have a great potential with to assist with claims which are made using digital processes.

Conclusion

The new ADR landscape is no longer about whether mandatory mediation is a Good or Bad Thing. The direction of travel is the increasing integration of ADR methods and processes into a Digital Justice System which will enable earlier settlement of claims as well as resolution of discreet procedural issues. Our change-to-survive skills will be needed and the matters outlined above need to be built into practitioners’ future training plans.

[1] Tim Wallis, Mediator and Solicitor (non-practising), Director, Trust Mediation and Trust Arbitration. Contributor to White Book, ADR section, vol 2. Founder member of Civil Justice Council (CJC), former chair of its ADR Committee, member of CJC ADR Judicial Liaison Committee. Former chair of Claims Portal Limited, Member of International Council of Online Dispute Resolution (ICOSR).

[2] [2023] EWCA Civ 1416

[3] Civil Procedure (Amendment No. 3) Rules

[4] CPR 1.1 (2), 1.4 (2), 3.1 (2), Pt 28 and 29 and Pt 44

[5] For example: /more-than-mediation-the-different-types-of-alternative-dispute-resolution/ and https://learn.cedr.com/blogs/using-mediation-now-what-commercial-clients-are-looking-for-today-in-mediation?utm_campaign=Employee%20Activism%20-%20Campaign%201%2024%2F25&utm_medium=email&_hsenc=p2ANqtz–K5j71lI0TeBAmmYM-myTiOTHkELAKRzxN1CTgzvbmN2MS-vUAuY8x8iAeuiPP5fDsNoBEpblw4SDGw_u-WHlXMl4QqNYk81JRCczBQiBR1kWrjSg&_hsmi=330420231&utm_content=330420231&utm_source=hs_email

[6] Lady chief justice calls for sustainable funding and digital transformation of courts | Law Gazette The Lady Chief Justice speaking at London International Dispute Week, April 2024.

[7] Northamber PLC v Genee World Ltd [2024] EWCA Civ 428; Conway v Conway & Anor [2024] EW Misc 19 (CC)

[8] Heyes v Holt [2024] EWHC 779 (Ch) (at [50]) and Francis v Pearson, [2024] EWHC 605 (KB) (at [87] – [92]).

[9] [2023] EWHC 1392 (KB)

[10] [2024] EWHC 2181 and [2024] EWHC 2248

[11] Elphicke v Times Media Ltd [2024] EWHC 2595 (at pp137) (KB)

[12] [2006] EWHC 12

[13] [2014] EWHC 3148 (TCC)

[14] PGF II SA v OMFS Company 1 Ltd 2013] EWCA Civ 1288 and Garritt-Critchley v Ronnan [2014] EWHC 1774 (Ch)

[15] https://www.judiciary.uk/wp-content/uploads/2023/08/CJC-PAP-report-Aug-23-FINAL.pdf

[17] “The Future of Courts” https://www.judiciary.uk/speech-by-the-master-of-the-rolls-the-future-of-courts/

[18] at para 15.