What is alternative dispute resolution?
Alternative dispute resolution (ADR) is an alternative method of resolving disputes between parties, with the aim of avoiding court proceedings and saving costs. Mediation is one of the most commonly used forms of ADR, but other ADR methods include expert determination and without prejudice meetings or more informal negotiation.
The courts have always encouraged parties to use ADR and to treat courts as the last option to resolve disputes.
For many years, solicitors have been obliged to advise clients of the necessity to consider ADR or risk being subject to cost sanctions if court proceedings are issued unnecessarily or suggestions by one party to the dispute to engage in ADR are unreasonably refused by the other.
When is ADR effective from
Since May 2024, a pilot scheme has been in place, automatically referring small claims (valued under £10,000) to mediation for certain types of claims.
Now following the decision of the court in the case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 141 the court rules have been changed effective from October 1. This means that courts can now order parties to engage in ADR providing that doing so is proportionate to achieving the purpose of settling any dispute quickly, fairly and at reasonable cost, and provided that the order does not impair a party’s fundamental right to a judicial hearing.
What are the new ADR rules
The revised court rules now allow, for the first time, the ability for the court to order ADR. They have also extended the overriding objective of the court to include “promoting or using alternative dispute resolution” and “ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution”.
When managing how a case proceeds, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution.
Furthermore, the court must, when considering any order for costs, consider the conduct of the parties and will take into account “whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to participate in alternative dispute resolution”.
It is not yet clear in practice how the court will decide when or if to order the use of ADR, but the changes signal that the court is likely to take a more pro-active approach to requiring parties to engage in ADR, albeit whether and when ADR will be appropriate depends on the specific factors in, and the type of claim.
What are the benefits of ADR
Engaging in ADR should always be a prime consideration for parties involved in disputes. Resolving issues outside of court, or at an early stage of proceedings, can lead to substantial cost savings.
Additionally, ADR can often be more flexible and tailored to the parties’ needs. As well as maintaining a business or other relationships that may otherwise be irretrievably damaged by the process of court proceedings
Our dispute resolution team has experience of ADR in many forms and in many types of cases, from high value commercial disputes to property and will disputes. Our team will always encourage clients to consider ADR and mediation as a cost effective solution for resolving disputes suited to the individual circumstances and can advise on whether and when it may be appropriate to try to engage in ADR to achieve the best result.
If you wish to discuss anything mentioned in this article or any dispute resolution matters you may have please contact Helen Hall or a member of our dispute resolution team.
What is alternative dispute resolution?
Alternative dispute resolution (ADR) is an alternative method of resolving disputes between parties, with the aim of avoiding court proceedings and saving costs. Mediation is one of the most commonly used forms of ADR, but other ADR methods include expert determination and without prejudice meetings or more informal negotiation.
The courts have always encouraged parties to use ADR and to treat courts as the last option to resolve disputes.
For many years, solicitors have been obliged to advise clients of the necessity to consider ADR or risk being subject to cost sanctions if court proceedings are issued unnecessarily or suggestions by one party to the dispute to engage in ADR are unreasonably refused by the other.
When is ADR effective from
Since May 2024, a pilot scheme has been in place, automatically referring small claims (valued under £10,000) to mediation for certain types of claims.
Now following the decision of the court in the case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 141 the court rules have been changed effective from October 1. This means that courts can now order parties to engage in ADR providing that doing so is proportionate to achieving the purpose of settling any dispute quickly, fairly and at reasonable cost, and provided that the order does not impair a party’s fundamental right to a judicial hearing.
What are the new ADR rules
The revised court rules now allow, for the first time, the ability for the court to order ADR. They have also extended the overriding objective of the court to include “promoting or using alternative dispute resolution” and “ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution”.
When managing how a case proceeds, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution.
Furthermore, the court must, when considering any order for costs, consider the conduct of the parties and will take into account “whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to participate in alternative dispute resolution”.
It is not yet clear in practice how the court will decide when or if to order the use of ADR, but the changes signal that the court is likely to take a more pro-active approach to requiring parties to engage in ADR, albeit whether and when ADR will be appropriate depends on the specific factors in, and the type of claim.
What are the benefits of ADR
Engaging in ADR should always be a prime consideration for parties involved in disputes. Resolving issues outside of court, or at an early stage of proceedings, can lead to substantial cost savings.
Additionally, ADR can often be more flexible and tailored to the parties’ needs. As well as maintaining a business or other relationships that may otherwise be irretrievably damaged by the process of court proceedings
Our dispute resolution team has experience of ADR in many forms and in many types of cases, from high value commercial disputes to property and will disputes. Our team will always encourage clients to consider ADR and mediation as a cost effective solution for resolving disputes suited to the individual circumstances and can advise on whether and when it may be appropriate to try to engage in ADR to achieve the best result.
If you wish to discuss anything mentioned in this article or any dispute resolution matters you may have please contact Helen Hall or a member of our dispute resolution team.