Paving the way for compulsory mediation

Jacqui Joyce reviews the recent report on compulsory ADR by the Civil Justice Council. The Civil Justice Council’s report on “the issues in relation to compulsory ADR” makes it clear it “is not made in the context of any specific proposals for the introduction or extension of compulsory ADR but in order to inform possible future reform and development in this area”. It covers two areas: can the parties to a civil dispute be compelled to participate in an ADR process? (the “legality” question); and if the answer is yes, how, in what circumstances, in what kind of case and at what stage should such a requirement be imposed? (the “desirability” question). Legality The review starts with Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 where the Court of Appeal stated that “it seems to us likely that compulsion of ADR would be regarded as an unacceptable constraint on the right of access to the court and, therefore, a violation of Article 6” (of the European Convention on Human Rights). It then reviews further cases and judicial comment, in particular, the Court of Appeal decision in Lomax v Lomax [2019] EWCA Civ 1467. This held that the court could compel a party to take part in early neutral evaluation (ENE) as: “It does not, in any material way, obstruct a party’s access to the court. “In so far as it includes an additional step in the process, this is not in any sense an ‘unacceptable constraint’…” It also looks at the European Court of Justice’s decision in Alassini v Telecom Italia SpA [2010] 3 CMLR 17, where the court held that Italian telecoms legislation which required customers suing phone companies to attempt mediation did not breach Article 6. It points out that in this case, the ADR process was free and caused no delay to the ultimate resolution. It concludes: “…any form of ADR which is not disproportionately onerous and does not foreclose the parties’ effective access to the court will be compatible with the parties’ Article 6 rights. If there is no obligation on the parties to settle and they remain free to choose between settlement and continuing the litigation then there is not… ‘an unacceptable constraint’ on the right of access to the court.” Sanctions for non-compliance The report considered what could be the appropriate consequences for failing to comply with a court order or rule compelling mediation. It concludes that ADR can no longer be treated as external, separate or indeed alternative to the court process and that orders requiring participation in ADR should be enforced and those who failed to attend should be sanctioned. There is no reason why the sanction should not be striking out the claim/defence. Desirability The report comes to no conclusions on when ADR, particularly mediation, should be compelled. It does, however, state: “…there is much to be said for early ENE in all cases other than the most complex, combined with a straightforward requirement of participation in ADR at an appropriate stage of the procedure.” In my experience, ENE is the form of ADR most lawyers advise their clients not to do. It provides no flexibility to talk around wider issues and reach a practical settlement, such as can be achieved at a mediation. The overall principle is that “litigants should not be required to engage in ADR which is a disproportionate burden on their time or resources”. Mediation The conclusion is: “We think that as mediation becomes better regulated, more familiar and continues to be made available in shorter, cheaper formats we see no reason for compulsion not to be considered in this context also.” There is no elaboration on what is “short and cheap”. The concern is that mediation fees may represent a disproportionate cost in many low-value cases. However, if fixed-cost mediation schemes continue to develop for use in low-value claims, this objection may lose its force. Rather contradictory, the report identifies boundary and contentious probate disputes as areas that may be most suited to compulsion. In my experience, these disputes would not come within the remit of “short and cheap”. The risk of stating that mediation can only be compulsory if it is low-cost is that you get inexperienced mediators, and your results will not be as good and then compulsion will be seen to have failed. Also, there is no comparison of the costs of a mediation to that of a trial. Most mediators’ fees would come within the amount of irrecoverable costs even if a party were to win at trial. The report also highlights concerns that mediation is unregulated. It states that there needs to be “sufficient confidence in the neutral person, the ADR provider”. It assumes that where the neutral is court-sponsored or is indeed a judge it is “plainly easier to justify compulsion”. It references the efforts of the Civil Mediation Council in relation to regulation but goes on to state: “We think that if mediation is to be compulsory, more systematic regulation is required.”  No elaboration is offered as to what that might involve. In my view, this report, so far as it relates to mediation, requires a lot more thought and a look at the real world. You will not get experienced and competent mediators to satisfy “regulation” if you expect them to compromise a successful model and work “on the cheap”. Read the report >>  Jacqui Joyce is a member of The Property Mediators, whose members specialise in mediating property disputes Image by Gerd Altmann from Pixabay