Court-Ordered ADR: Can I Force My Opponent to Mediate?
A recent change in the law means that English courts may now impose Alternative Dispute Resolution (ADR) on parties to a dispute. It’s a significant development in the landscape, as mediation has traditionally always been a voluntary process.
Before this, it wasn’t possible to compel a reluctant party to mediate, although there were (and still are) stringent penalties for those who unreasonably refuse to do so.
This article takes a detailed look at the different aspects of mediation. We include what’s changed recently, what’s involved in mediation, and other ADR alternatives.
Mediation as a Traditionally Voluntary Process
Mediation is one of several options under the umbrella of Alternative Dispute Resolution (ADR). Other popular choices include adjudication and arbitration.
Mediation has traditionally been voluntary; it’s one of the process’s keystones.
It makes sense that unless all parties are willing to come to the table, any negotiation, even with the input of an impartial mediator, will ultimately fail to achieve consensus without goodwill and/or compromise.
Mediation offers impressive results. An audit by the Centre for Effective Dispute Resolution (CEDR) in 2021 found a settlement rate of 93% of cases. 72% of these settled on the day of mediation.
When Can Courts Effectively Compel Mediation?
The courts support ADR for its time- and cost-saving benefits, but have not compelled it until very recently.
In the landmark case of Halsey v Milton Keynes General NHS Trust (2004), the court was asked to consider whether it could impose costs sanctions on a successful party who had refused to participate in ADR, in particular, mediation.
As a key part of the Court of Appeal’s judgement in this case, the Court held that ADR can be encouraged but not compelled.
The court stated that compelling parties to mediate could infringe their right to access justice as protected by Article 6 of the European Convention on Human Rights (ECHR) to which the UK is currently a signatory.
However, in October 2024, there was an amendment to the Civil Procedure Rules , which stated that active case management involved ‘ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution’.
Specifically, CPR 3.1 (2) (o) provides that the court has the power to order parties to engage in ADR.
Shortly after these amendments, the case of DKH Retail Limited and others v City Football Group Limited [2024] marked a pivotal moment, as the court exercised this power by ordering the parties to mediation.
Unreasonable Refusal to Mediate and Cost Consequences
A court may impose significant costs sanctions on parties that unreasonably refuse to mediate. Legal precedents demonstrate various circumstances where courts have deemed such refusals unreasonable. For exa,ple, remaining silent in response to a mediation request or delaying engagement without justification can be considered unreasonable conduct.
However, there are circumstances in which a refusal to mediate may be reasonable, such as when the dispute requires a final, binding decision that mediation doesn’t offer.
Another may be where it is clear, on the facts of the case, that mediation can never succeed because the parties’ respective positions are just too far apart.
If a refusal to mediate is deemed unreasonable, the court may impose costs sanctions. These can include depriving the successful party of some or all of their costs or awarding indemnity costs against the unsuccessful party.
Early Neutral Evaluation (ENE): An ADR Method Courts Can Direct
Under the Civil Procedure Rules (CPR) rule 13, the court has the power to impose an ENE (Early Neutral Evaluation) on the parties.
ENE is an assessment of the case based on the information submitted by both sides, a dry run with the judge indicating a potential outcome.
In a recent case, Lomas v Lomas (2019), the Court of Appeal ruled that the courts have the power to impose EME when appropriate, without the parties’ consent.
The ENE is a non-binding process, but it can significantly influence the parties by offering a realistic view of the merits of their case. This is particularly effective in disputes where parties are entrenched in their positions or where the case hinges on a specific legal or technical issue. The evaluator, often a judge, provides an independent opinion on the probable outcome, which can encourage negotiation and settlement. The process is conducted on a without prejudice basis, ensuring that any documents prepared for the hearing, such as position statements, are protected
Mediation vs Arbitration: Different ADR Paths, Different Outcomes
Although mediation and arbitration are both processes under the ADR umbrella, they differ in terms of outcomes.
The key distinction is that, in mediation, the parties are encouraged to reach a mutual agreement. In arbitration, an independent arbitrator imposes a final and binding decision, so it is more closely aligned to litigation in that respect.
Arbitration is also more similar to court proceedings as it’s more formal than mediation.
Deciding whether to mediate or arbitrate is a strategic decision that requires expert legal evaluation. It depends on the relative strengths and weaknesses of the case and the desired and possible outcome.
The Role of the Mediator and the Importance of Confidentiality
A mediator plays a vital role in resolving civil disputes. Their job is to broker a deal between the parties that both agree to.
A mediator is impartial and neutral, looking for a fair solution in a friendly environment where the parties can talk freely. Unlike arbitration, a mediator’s role is not to impose a conclusion.
Mediators don’t support one side or the other, regardless of their personal view on the strengths of each party’s argument. The procedure relies on them acting without bias.
Mediation is structured, with the mediator controlling the process, but without the formality of court proceedings. A mediator will identify issues, work through misunderstandings, question the parties, and explore different options for resolution.
A crucial advantage of mediation is its confidentiality. It encourages parties to speak freely without fear that their conversations will later be reprised in court proceedings and protects business interests and commercial relationships.
ADR Across Different Types of Disputes
ADR is common across different types of disputes because of its versatility, relative speed, and lower costs compared to litigation.
It’s particularly prevalent in the construction industry, which is renowned for complex contracts involving multiple parties and is prone to disputes. It’s an environment where parties want to preserve commercial relationships in lengthy projects.
ADR is also frequently used in employment disputes and as an alternative to the family court in divorce disputes and child custody battles. It’s also becoming increasingly favoured in consumer cases as a viable alternative to court proceedings.
Contractual ADR Clauses and Court Enforcement
It is increasingly common nowadays for most commercial contracts to have an ADR clause. Commercial mediation is a fast and flexible alternative to court and serves the often-overriding imperative of keeping a business relationship on track.
A court can enforce a contractually agreed dispute-resolution clause, compelling the parties to mediate under the terms of their original agreement. However, they will only do so if the clause is clearly drafted and without ambiguity.
What to Expect When Instructing Solicitors for Court-Ordered ADR
ADR, as opposed to litigation, is much quicker, and you may secure an appointment within a couple of weeks.
ADR provides opportunities for more creative solutions than those found in the courtroom as the parties can agree to proposals that are beyond the court’s powers to grant, so make sure your solicitor is well briefed about what your goals are and what you would be prepared to accept in terms of a settlement.
It’s ideal to instruct solicitors with mediation experience.
Practical Next Steps If You Want to Push for ADR
You can apply to the court to order ADR even if you have a hearing date looming and the other party is reluctant.
Pointing out the implications of unreasonably refusing to participate in ADR can help encourage a reluctant party to agree..
You should asses whether your case is appropriate for ADR. Not every claim is suitable, and consequently, a refusal to participate may not be deemed unreasonable by the court.
Court proceedings can proceed in parallel to settlement negotiations and ADR.. ADR is an alternative to litigation, but it doesn’t mean that you will or should avoid the courtroom.
Frequently Asked Questions
What Happens if One Party Refuses Mediation?
The main consequence of refusing mediation is cost penalties. Even if you win, you might not recover your costs or be ordered to pay the other party’s costs. Refusing mediation may also delay the resolution of the case, increasing legal costs for both sides. Not showing willingness weakens the prospect of the parties reaching a mutually acceptable solution prior to trial
Can the Court Order Parties To Mediate?
Under changes to the Civil Procedure Rules in 2024, the court has the power to order mediation even if one or both parties are reluctant. Mediation can still be successful even if one party is unwilling. In the first case, after the rule change, when mediation was ordered, the process was successful even though the defendant initially objected.
Is ADR Quicker Than Court?
ADR is much quicker than court, not only in the length of the process but in the availability of a start date. Parties can move to ADR quickly, without waiting months for a court hearing date. Speed protects commercial positions. Entrenched disputes subject to lengthy delays damage business interests.
What Are the Disadvantages of ADR?
ADR may be fast and flexible, but it does have some disadvantages. Choosing your own arbitrator can create inherent bias. In mediation, there is no binding decision, and the parties don’t have to agree, meaning you can still end up in court. In arbitration, decisions are usually binding, but remedies are more limited than in court.
Speak to Helix Law About Court-Ordered ADR and Mediation
In most walks of life, disputes are unavoidable. In the commercial context, intractable disagreements damage business interests and relationships, with litigation often a costly and distant option.
Alternative Dispute Resolution has overtaken litigation in many areas, encouraged by the government and the judiciary. It’s faster, flexible, and cheaper, with different options to suit client needs.
At Helix Law, our commercial team is experienced in dealing with ADR and mediations and are committed to achieving practical, commercial outcomes for clients. Our teams work in disputes nationally and would love to assist you.
