It is somewhat ironic that in the short history of alternative dispute resolution (ADR) in this jurisdiction, it has been the courts that have done most to encourage disputants to resolve their disputes using ADR techniques.The Commercial Court took the lead in December 1993 by issuing a practice statement requiring parties to tell the court at both the summons for directions and the pre-trial review stages whether they had considered using ADR.
In January 1995, the other divisions of the High Court introduced the same ADR questions into their pre-trial review questionnaires.
ADR was given a further boost in May 1995 when Lo rd Woolf published his interim report, 'Access to Justice'.At around the same time, the Commercial Court committee set up a working party to consider whether the court should take further steps to promote the use of ADR.
The working party reported early last year.
It concluded that while the courts should not deflect those who wish to litigate from doing so, the courts should take a more driven approach to encouraging parties to use ADR.
The working party's report resulted in the practice statement read out by Mr Justice Waller in June 1996.
The four main provisions of the statement were as follows.INTER PARTIES SUMMONSADR is to be discussed on the first inter partes summons at which directions for the interlocutory progress of the action are to be given, and at any subsequent inter partes hearings at which directions are sought.
The parties are free to bring on a summons at an early stage for the purposes of discussing the possibility of using ADR with the judge.-- The appropriate time to use ADR varies from case to case.
The practice statement caters for this by enabling either party to raise the issue of ADR with the judge from issue of proceedings onwards.
If neither party raises ADR prior to the first summons for directions, the judge will raise the matter of his or her own accord.-- A party who rejects a suggestion of ADR by the other will have to justify its refusal to the judge.JUDICIAL DISCRETIONThe decision as to whether ADR might be appropriate is at the discretion of the judge.
The judge has the power to adjourn the proceedings while ADR steps are taken.-- The working party has recommended that the reluctance of one or other party to try ADR should not necessarily dissuade the judge from adjourning the proceedings so as to enable some form of ADR to be undertaken.-- Certain commentators consider that the threat of an adjournment could well have the opposite effect; defendants who are unwilling to engage in ADR are unlikely to be concerned by an adjournment that delays the litigation.
But it would be a brave defendant who uses an ADR adjournment as a tactical delay knowing that the judge will require a full explanation as to what progress has been made during the adjournment.COSTS ORDERSWhen proposing ADR, the judge has the power to make such order as to the costs that the parties might incur in using ADR as in all the circumstances seems appropriate.-- Lord Woolf has recommended that the court should have the power to penalise a party in costs for an unreasonable refusal to resort to ADR.
Many believe that such a provision is the only way in which litigation lawyers will be induced to give serious consideration to ADR.-- The practice statement did not include such a radical costs provision.
Its costs procedure is designed to avoid apportioning any blame for the failure to resolve a dispute through ADR.
The working party envisages that the normal order will either be costs in the cause or no order as to costs.NEUTRAL EVALUATIONThe judge can offer his or her services (or those of another judge) to carry out an early neutral evaluation.
In such circumstances the judge should take no further part in the proceedings.-- The direct involvement of Commercial Court judges is a clear indication of the weight that the court is giving to this ADR initiative.-- Judges are well qualified to carry out early neutral evaluations and retired judges commonly perform the same function.-- The Commercial Court has yet to be asked to carry out a neutral evaluation and it is not therefore clear what procedure j udges will use.THE FUTURECommercial Court judges are committed to the implementation of the practice statement.
On every summons for directions judges are asking the parties to consider ADR and report back to the court in writing with their views.
Mr Justice Coleman has announced that 'ADR orders' are being made by the court in around 30% of cases.All lawyers representing clients in the Commercial Court are at serious risk of prejudicing their clients' interests if they are not well versed in ADR.If implemented, Lord Woolf's recommendations will undoubtedly increase the involvement of all civil courts in encouraging litigants to use ADR to resolve their disputes.
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