Alternative Dispute Resolution in Litigation

In recent years there has been a growing emphasis on all parties to a claim to consider engaging in ADR (Alternative Dispute Resolution). ADR refers to the different ways parties can resolve disputes without a full trial at court. Mediation and joint settlement meetings are both forms of ADR which commonly are used to resolve personal injury claims.

In a mediation, a mediator, who is a neutral third party will enable negotiations and open lines of communication between the parties. The mediator focuses on narrowing down issues of dispute between parties and work towards an acceptable settlement.

In a joint settlement meeting (JSM), there will be joint discussions that take place between both parties, along with confidential and separate discussions that will take place amongst each party and their legal representatives. Negotiations in a JSM take places directly between the parties and are less formal than a mediation.

The common theme in both forms of resolution is that discussions are on a without prejudice basis, the intention being that the parties can be more candid in their respective positions to aid negotiation.

Benefits of ADR in litigation

ADR can be commercially cost saving than litigation. Litigation is expensive with legal fees, expert fees and court fees which accumulate at the case advances.  A JSM or mediation is therefore a solution to expedite a settlement thus saving on overall costs in the long run.  It is often used as a tool to enable an injured party to ensure a reasonable settlement is receiving, covering past and future losses, including a rehabilitation package put in place. The injury party can then focus on rebuilding their life without the added pressure of dealing with ligation.

It can be quite overwhelming for parties to prepare for and attend trials. Witnesses sometimes feel worried about not knowing what to expect when they are cross examined at trial. The judge hears both parties’ evidence and then passes their judgement which is binding on the parties. ADR if often less formal and less stressful. It allows both parties a platform to discuss openly issues at play and gives more power to the parties to reach a mutual decision.

Potential downfalls of ADR

While ADR can on the whole be beneficial in reaching a desired outcome for parties, in some cases it does not prove to be an effective solution. For ADR to be successful both parties must be willing to participate and engaging in the process. If one party is not showing any willingness to compromise it can lead to a failed outcome and prevent the parties from reaching settlement.

Court’s approach to ADR

The case of Churchill v Merthyr Tydfil County Borough Council [2023] has confirmed that the Court can make an order to stay proceedings and compel parties to engage in non-court dispute resolution.

From 1 October 2024 judges have been granted new powers under the Civil Procedure Rules (CPR) to ‘order or encourage the parties to use’, and ‘facilitating the use of, alternative dispute resolution’. The previous wording under the CPR only required the Court to encourage ADR if the Court considered it appropriate.

More recently in DKH Retail and others v City Football Group Ltd (2024), at a pre-trial review at the High Court, Mr Justice Miles rejected objections put forward by the defendant to an application for compulsory mediation made by the claimant shortly before trial and cited the amended CPR rules emphasising the court has power to order unwilling parties to engage in ADR. In this case the Defendant had argued that the parties had tried to negotiate before and there was no realistic prospect of settlement. The Defendant also advanced the argument that a mediation order had been made so close to trial, and the parties had already spent a large amount in legal costs to get to this point. Although Mr Justice Miles accepted the Defendant’s argument that the order for mediation was sought late in the proceedings, he could see the benefit for mediation taking place as the parties had crystalised their position through pleadings and exchange of witness statements. The claim eventually settled prior to a trial taking place.

With the change in shift of the Court’s attitude towards ADR, it is very important that parties to a personal injury claim give proper consideration to engaging in ADR to resolve a claim. As a side note, if a party refuses unreasonably to engage in ADR, then this could potentially result in that party being penalised at the conclusion of the claim by way of an adverse costs’ order.