The latest amendments to the Civil Procedure Rules (“CPR”) which came into effect on 1 October 2024 have given the Courts power to order parties to engage in alternative dispute resolution (“ADR”).
It was previously the position that if a party proposed a form of ADR and the receiving party refused, or failed to engage, their conduct could affect the issue of costs upon the conclusion of the litigation (CPR 44.2(5)e). Further, a possible provision within Case Management Orders was that if the parties were required to engage within ADR and a party did not do so, they would be required to serve a witness statement giving reasons for their refusal, which would be shown to the trial judge on the issue of costs.
The recent amendments to the CPR have gone one step further in that the Courts can now:
- “Order or encourage the parties to use, and facilitate the use of, alternative dispute resolution” (CPR 1.4(2)e);
And on the issue of costs, CPR 44.2(5)(e) has been amended to the following in respect of the court considering the parties’ conduct on the issue of costs:
- “Whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution”.
The new rules emphasise the importance of the parties attempting to settle at every stage of the dispute. Depending on the Court’s stance on parties breaching ADR orders or failing to provide valid reasons for refusing ADR, it is anticipated that draconian consequences will be handed out to any non-compliant party. Such an example can be shown already on the topic of ADR and costs in the case of Conway v Conway & another [2024] EW Misc 19 (CC).
The recent amendments could spell the end of the days where parties sought to engage in drawn out litigation with a disgruntled opponent, and the eventual winner being who had the deepest pockets or bigger appetite to battle in the legal arena, rather than who had the strongest legal arguments with the best merits. This is also highlighted considering a party’s newly found ability to request from the Court an order for the parties to undertake ADR, regardless of the opposing party’s stance.
The Civil justice System’s further shift towards bringing conflicting parties together at the earliest opportunity are reflected in the latest CPR changes, in the hope (it seems) of reducing the strain on the court system (and therefore only cases that are large and complex reaching trial) and avoiding the need for parties to incur substantial costs, which inevitably, have a detrimental impact on a party’s ability to settle.
If you have any kind of dispute which requires resolution, please get in touch with a member of our Commercial Litigation Team who can advise you on your position and best next steps.
