Is ADR compulsory?

This briefing note will examine whether ADR is compulsory in the Courts in England & Wales and what the way forward may look like.

What is ADR?

ADR, or Alternative Dispute Resolution, is an alternative process to resolving a dispute before the Courts. In other words, it is a mechanism to seek to resolve a dispute without the intervention of the Courts.

It can be a formal but non-binding process, such as mediation; formal but binding, such as adjudication and arbitration; or informal, such as a round table meeting or negotiation.

What is the current position?

Currently, the position is that some forms of ADR might be compulsory if it is stipulated and agreed between the parties prior to any potential claim. For example, a contract might have an arbitration clause in it meaning that the Court may not have jurisdiction over the claim in the first place. The contract may also state that parties need to engage in mediation prior to issuing a claim in the Courts.

In both of these examples it can be said that ADR is compulsory, as these are contractual terms agreed by the parties. However, what is the position if there is no such contractual term or the claim is not a contractual dispute?

Currently, the position is that ADR is usually not compulsory. In the case of Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 Lord Justice Dyson, stated that the court has no jurisdiction to force unwilling parties to mediate as it would be contrary to their right to a fair trial under Article 6 of the European Convention on Human Rights.

However, the Court strongly encourages parties to engage in ADR and can even penalise a party on costs if they refuse to engage in ADR without a good reason.

In BXB v (1) Watch Tower and Bible Tract Society of Pennsylvania, (2) Trustees of the Barry Congregation of Jehovah’s Witnesses (No.2) [2020] EWHC 656 (QB), Chamberlain J ordered that the Defendants should pay the Claimant’s costs on the indemnity basis, following the Defendants’ refusal to attend a joint settlement meeting. This was ordered despite the Defendant showing reasonable grounds to defend the claim and the damages claimed by the Claimant were considerably in excess of those eventually awarded.

The way forward?

On 12 July 2021, the Civil Justice concluded that “mandatory (alternative) dispute resolution is lawful and should be encouraged”.

The authors of the report state that the “firm views briefly expressed” in the Court of Appeal’s 2004 Halsey ruling, i.e. that compulsory mediation was not compatible with Article 6 of the European Convention on Human Rights, “have proved to be the beginning of a debate rather than the conclusion”.

The report went on to say that:

“The sanction for failure to participate may be to prevent the claim or defence continuing, either by making the commencement of proceedings conditional on entering ADR, or empowering the court to strike out a claim/defence if a party fails to comply with a compulsory ADR order at a later stage in the proceedings.

“Any strike-out could be set aside if there was a valid reason for non-compliance.” This is a stark contrast to simply a costs sanction.

Although the findings of the report have not been enshrined in law, it may only be a matter of time before the Courts start adopting stricter sanctions for a party who refuses to engage in ADR without a good reason.

How Gherson can assist

Gherson’s litigation team has considerable experience in advising on these matters. If you have a potential claim, or are a defendant to an action, then please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2022

View all news & Insights