This article was first published in the Personal Injury Brief Update Journal in July 2008.
April saw the introduction of an amended allocation questionnaire. This will be followed by an amended claim form and defence form along the same lines. In each case considerable focus is put on the parties’ obligations to try to settle the case without a hearing. Representatives have to confirm that they have “explained to [their] client the need to try to settle; the options available; and the possibility of costs sanctions if they refuse to try to settle.”
One of the options available is mediation and litigators have long had a duty to consider it’s use as an alternative method of resolving a dispute. This duty is put into sharp focus by the responses required on the allocation questionnaire. So where does the obligation to consider using alternative dispute resolution (ADR) including mediation come from?
The Solicitors’ Code of Conduct 2007 provides in Rule 2.02(1)(b) (Client Care) an obligation on solicitors to “give the client a clear explanation of the issues involved and the options available to the client”. Guidance is given in the notes to Rule 2 at paragraph 15
“When considering the options available to the client (2.02(1)(b)), if the matter relates to a dispute between your client and a third party, you should discuss whether mediation or some other alternative dispute resolution (ADR) procedure may be more appropriate than litigation, arbitration or other formal processes. There may be costs sanctions if a party refuses ADR – see Halsey v Milton Keynes NHS Trust and Steel and Joy [2004] EWCA (Civ) 576.” Therefore in every personal injury case there is a professional obligation on the solicitor to discuss mediation or some other form of ADR with their client.
The Civil Procedure Rules repeat the obligation to consider ADR. Part of the courts management of the case includes “encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure.” (Part 1.4 (2)(e)). Failure to even consider mediation can be penalised with an adverse costs order under the courts powers in Part 44.5 (3) which states that when deciding the amount of costs to be awarded the court must consider the conduct of all the parties, in particular-
“(i) conduct before, as well as during, the proceedings, and;
(ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;”
This makes it clear that the duty to consider ADR is an ongoing duty and should be reviewed before proceedings are commenced and routinely thereafter. The Personal Injury pre-action protocol at paragraph 2.16 states “The parties should consider whether some form of alternative dispute resolution procedure would be more suitable than litigation, and if so, endeavour to agree which form to adopt. Both the Claimant and Defendant may be required by the Court to provide evidence that alternative means of resolving their dispute were considered. The Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. Parties are warned that if the protocol is not followed (including this paragraph) then the Court must have regard to such conduct when determining costs.” A similar paragraph is included in the other pre-action protocols.
The courts are willing to use costs sanctions as the stick to encourage the use of ADR. In Dunnett v Railtrack PLC [2002] EWCA Civ 302 the Court of Appeal refused to award the successful respondents their costs of the appeal because of their refusal to contemplate alternative dispute resolution. In Halsey v Milton Keynes NHS Trust the Court of Appeal chose not to penalise the party that refused to mediate because of the particular circumstances of the case and anybody declining an offer to mediate needs to be familiar with the grounds set out by Dyson LJ which may make a refusal to mediate reasonable.
Those grounds are as follows:-
(a) The nature of the dispute.
(b) The merits of the case.
(c) Other settlement methods have been attempted.
(d) The costs of mediation would be disproportionately high.
(e) Delay
(f) Whether the mediation had a reasonable prospect of success.
In May of this year the Master of the Rolls Sir Anthony Clarke made a speech at the Civil Mediation Council’s annual conference. He said,
“Experience thus shows even now that far too many people know far too little about mediation. I think we can all agree that this has to change. ADR in general and mediation in particular, where it is the appropriate ADR mechanism, must become an integral part of our litigation culture. It must become such a well established part of it that when considering the proper management of litigation it forms as intrinsic and as instinctive a part of our lexicon and of our thought processes, as standard considerations like what, if any expert evidence is required and whether a Part 36 Offer ought to made and at what level… It seems to me that the court has sufficient powers at present routinely to direct the parties to take part in a mediation process or attend a mediation hearing during the course of thepre-trial stage of any proceedings.”
Ward LJ banged the drum for mediation in Egan v Motor Services (Bath) Limited [2007] EWCA Civ 1002. Having emphasised the solicitors’ duty “to take the firmest grip on the case” he went on to say “In so many cases, and this is just another example of one, the best time to mediate is before litigation begins. It is not a sign of weakness to suggest it. It is the hallmark of common sense. Mediation is a perfectly proper adjunct to litigation. The skills are now well developed. The results are astonishingly good. Try it more often.”
It is clear from all of the above that solicitors have a clear duty to advise clients about ADR and to consider using it routinely in appropriate case.
Philip Hesketh, Professional Mediator
