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by Tony Allen on 08/08/24
1. What are the Amendments in their Final Form?
The full text of the relevant amended Rules (which are CPR 1, 3, 28, 29 and 44) will not appear on the official CPR website until they come into effect in October 2024.
To summarise the three main areas of change:
1. The first and most striking are the insertions into CPR 1, where the overriding objective of civil justice is enshrined, and against which judges often measure the exercise of discretions given to them. The familiar objective – “enabling the court to deal with cases justly and at proportionate cost” – is said to include “so far as is practicable” such matters as equal footing, speed, economy, appropriate resources, and rule compliance. Now it is expanded to include “using and promoting ADR”[1]. For use and promotion of ADR to have become an objective of civil justice is startling indeed[2]. CPR 1.4, dealing with the court’s duty of active case management, is now said to include “ordering or encouraging[3] the parties to use an ADR procedure if the court considers it appropriate and facilitating the use of such procedure[4].
2. The second set of amendments relates to clarifying the court’s management powers over ordering ADR, set out in CPR 3, 28 and 29.
CPR 3.1(2)(o) and (p) now read:
“(o) order the parties to participate in ADR;
(p) take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.”
CPR 28 (which deals with matters to be dealt with by directions in fast track and intermediate track cases) now includes “whether to order or encourage the parties to participate in ADR”[1].
CPR 29 (which deals with case management in multitrack cases, so all litigation of significant value and complexity not covered by other Court Guides) requires directions hearing in every case and now provides:
“(1A) When giving directions, the court must consider whether to order or encourage the parties to participate in ADR[2].”
This latter provision is expressed very strongly. “Must” is not a frequently used verb in the CPR.
3. The third instance of amendment relates to the costs provisions in CPR 44, in which the way litigation is conducted is identified as a possible basis for sanctioning unreasonable behaviour. The conduct of parties is now said specifically to include:
“whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution proposed by another party[1].”
Note that the word “participate” in the original draft has been changed to “engage” as a result of the consultation. CMC/CEDR/Ciarb pointed out in their response that “participate” might allow an intrusive judge to feel entitled to assess the nature of a party’s participation during a mediation behind the veil of privilege and confidentiality and suggested “failed to agree to participate” as an alternative. “Engage” connotes “initial engagement” and answers the point. Arguably, this amendment encapsulates settled law since 2002 set out in such court decisions as Dunnett v Railtrack and indeed in Halsey itself.
2 . Where to From Here?
These amendments to the CPR, alongside the Court of Appeal decision in Churchill, coupled also with the parallel developments over small claims introduced on 22 May 2024 can only have a dramatic effect on the position of ADR, and mediation in particular, in civil justice. Next to the rapid development of mandatory mediation for small claims, we now have mandatory consideration of ADR (which in the main means mediation) at directions stage in multitrack cases. Although the same peremptory language is not used in the Business and Property Courts Guides, few parties have felt it wise to ignore the theoretically non-compulsory terms of Commercial Court ADR (now NDR) Orders ever since they were conceived in 1995.
The fundamental change for general litigation lies in the fact that courts will now be able to mobilise mediation during the life of any case, rather than relying on a degree of pressure to mediate merely being generated by the possibility that a case will reach trial and costs sanctions might be imposed by a judge retrospectively for unreasonably refusing to mediate some time ago. The essentially second-hand impact of costs sanctions was accurately reflected by Lord Briggs when not overruling the trial judge’s exercise of discretion on costs in PGF v OFMS[1], referring to “a sanction which, even if a little more vigorous than I would have preferred, nonetheless operates pour encourager les autres.
Whether this will lead eventually to the demise of sanctions under CPR 44.(5)(e) remains to be seen, though this provision will still undoubtedly be used for cases which are already approaching trial without any prior deployment of mediation. The case of Northamber v Genee World[2] has already seen a sanction imposed for failure to mediate since Churchill.
Will courts need to order mediation, or will parties simply agree to use mediation by agreement, to avoid any risk of a costs sanction at a directions hearing or on a specific application by an opponent? Experience in other jurisdictions, such as British Columbia, suggests that compulsion usually means that parties pre-empt compulsion by consent. Furthermore, where has already been one mediation which failed, courts have already strongly recommended[3] or actually ordered a stay for[4], a second mediation, because new material may have emerged to change perceptions.
But perhaps the biggest impact on future litigation culture will come from the amendments to CPR 1. Judges very often refer back to the overriding objective when exercising their discretion, and if they do so in future it will be much harder for judges for whom costs sanctions for refusing to mediate are distasteful, to indulge any such inclination. After all, they have now been told that one facet of the objective of civil justice is use and promotion of ADR, and have been placed under a duty to manage cases actively which includes ordering or encouraging use of ADR “if it considers that appropriate, and facilitating the use of such procedures”. Whether anything like the six Halsey excuses for not sanctioning refusal to mediate will extend into decision-making over whether to order parties to mediate (as was mooted by the Bar Council during Churchill) is not clear. The hope must be that judicial decision-making about all these matters will in future be much more consistent as a result of the new amendments to the CPR.
3. What About the Acronym 'ADR'?
Unsurprisingly perhaps, ‘ADR’ is still with us. CMC/CEDR and Ciarb annexed comments to their response to the CPRC consultation about this acronym, and these still hold in terms of hoping that there will be further discussions to provide a better one. More importantly, greater clarity is needed about what it does and does not cover, as the CPR glossary gives it such a wide spectrum of possible meaning. The CPRC obviously felt that it was important to get the basic rule changes through as quickly as possible. Although the responses to the consultation have yet to be published, we can safely assume that there will have been even greater differences of opinion than emerged from the CMC/CEDR/Ciarb submission on this topic. It is clear from the minutes of the April 2024 CPRC meeting that a phase two for discussion of further reform is contemplated.
Meanwhile, interesting times lie ahead.
References
[1] CPR 1.1(2)(f). The amended Rules use “alternative dispute resolution” (for better or worse) throughout, but for convenience this article abbreviates it to “ADR”.
[2] An interesting debate emerges in the published minutes of the CPRC for its April 2024 meeting, which considered “the principle of including, in the Overriding Objective, something which is conceptually different from the rest of that rule. It was observed that ADR could be seen as more of a tool in support of achieving the Overriding Objective, rather than the Overriding Objective itself. However, the principle, that ADR should be included in the Overriding Objective in some form, was AGREED.”
[3] The order of the underlined words was reversed in response to a suggestion made in the CMC/CEDR/Ciarb during the consultation.
[4] CPR 1.4(2)(e)
[5] CPR 28.7(1)(d) and 28.14(1)(f)
[6] CPR 29.2(1A)
[7] CPR 44 (5)(e)
[8] [2013] EWCA Civ 1288 para 56
[9] [2024] EWCA Civ 428
[10] See Francis v Pearson and Burston [2024] EWEHC 605 (KB)
[11] See Heyes v Holt [2024] EWHC 779 (Ch)