All We Are Saying Is…Give ADR A Chance

Alternative Dispute Resolution is all the rage these days. It is a term describing the process of resolving a dispute without taking cases through expensive, time-consuming, and stressful litigation. Lawyers must consider the overriding objective under the Civil Procedure Rules. They should do this by saving the valuable resources of the court system when taking instructions from clients. Many lawyers when drafting contracts including contractual provisions set out:

• how cases are to be managed during a dispute
• what form of ADR process will be used
• specifying what consent will be required for court proceedings to take place and
• confirming the party’s agreement that the breach of a contractual clause will not automatically terminate the agreement.

However, one firm’s conduct emerged in mid-June and demonstrates the potential consequences for lawyers if they fail to adequately consider an invitation to enter ADR procedures during litigation.

What Happened In The Case?

The Claimant approached the other side and invited them to enter mediation four times to arrive at an amicable settlement. However, the other side seemingly declined all four approaches. The party suggested entering the mediation process had seemingly complied with the overriding objective by reasonably approaching the other party before any court proceedings were entered, court claim forms submitted or any hearings attended. However, despite all the efforts to arrive at a reasonable settlement all was sadly in vain as the suggestion was declined on four separate occasions.

Why Was Mediation Refused?

There were several reasons provided for the party’s refusal to enter Alternative Dispute Resolution procedures such as mediation in this case. They claimed that:

• the case would collapse if it meandered its way to court
• it was a pointless, unproductive, and needless exercise
• as a strategy it would not be cost-effective and
• it would only consider Alternative Dispute Resolution once the disclosure stage of proceedings was reached.

However, the case became interesting when the party who had refused the four offers to enter into mediation then applied to the court to claim its costs on an indemnity basis. The High Court considered the history of events, and the evidence submitted in the case of the refusals and decided that the conduct complained of did not justify an award of indemnity costs. Throughout the case, the party claiming the costs on an indemnity basis was giving the impression that it would be open to considering entering into Alternative Dispute Resolution procedures in the form of mediation if proceedings reached the disclosure of evidence stage.

What Did The Judge Say?

The judge heard the arguments submitted on either side and quickly poured cold water over the argument. He advised the costs claimant that the decision to decline costs on four occasions and the reasons given were unreasonable. This was due in no small part to the fact that the party had been provided with ample opportunity to disclose any evidence and the arena of mediation would have offered the perfect opportunity for the disclosure of evidence, any issues in the case to be identified, and ironed out without the need for litigation.

Pages Turned…Lessons Learned?

Lawyers should encourage clients to consider entering ADR procedures in all cases. The Civil Procedural Rules have ADR baked into them and invite parties to stay proceedings for around four weeks to resolve matters. ADR allows parties to keep their potentially lucrative relationship on track. Lawyers should avoid jumping to conclusions about a negative outcome. They should always act within the overriding objective, saving court resources in terms of time and costs.

ASSESSING FIRMS

#AddleshawGoddard #DLAPiper #DWF #EvershedSutherlandLLP #BrabnersLLP #DACBeachcroft #HillDickinson #JMWSolicitors #PinsentMasons #SquirePattonBoggs #FieldFisher #Kennedys #Mills&ReeveLLP #PannoneCorporateLLP #Weightmans #Clyde&Co

THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES

[1] Rose, Neil – City law firm “unreasonably” refused offers to mediate negligence claim – Legal Futures – 17 June 2022 - City law firm "unreasonably" refused offers to mediate negligence claim - Legal Futures

[2] Civil Procedure Rules

[3] Rule 1 – Civil Procedure Rules

[4] Mahmood, Tariq – Have you just unreasonably refused to mediate? – 30 April 2020 – 33 Bedford Row - Have you just unreasonably refused to mediate? (33bedfordrow.co.uk)

[5] Swain Mason v Mills & Reeve [2012] EWCA Civ 498

[6] Corby Group Litigation v Corby District Council [2009] EWHC 2109 (TCC)

[7] PGF II SA v OMFS & Another [2014] 1 WLR 1386

[8] Burchell v Bullard [2005] 3 Costs LR 507

[9] Rolf v De Guerin [2011] 5 Costs LR 892

[10] Hurst v Leeming [2003] 1 Lloyd's Rep 379

[11] SG v Hewitt [2013] 1 All ER 1118