A recent Court of Appeal case is authority for the proposition that the courts can order Early Neutral Evaluation (ENE) under the Civil Procedure Rules even though all the parties to the dispute have not consented to it. In Lomax -v- Lomax [2019] EWCA Civ 1467 it was held that the consent of the parties is not required for the court to exercise its discretion under CPR 3.1(2)(m) to order ENE.
What is ENE?
ENE is a form of alternative dispute resolution in which an independent and impartial evaluator is appointed to give the parties an assessment of the merits of their case. It is different from other forms of ADR such as mediation, the latter being essentially a negotiation facilitated by a neutral third party which doesn’t involve decision making by that third party. With ENE, the idea is that the third party provides the parties with an objective and realistic view on the strengths and weaknesses of their respective cases, which can then serve as a basis for negotiated settlement, where the parties are negotiating against a backdrop of a third party having given their opinion of how the matter could ultimately play out before a judge at trial.
Court ordered ENE
As part of the court’s general powers of management of issued cases, the Civil Procedure Rules (CPR) provide that the courts have power to:
CPR Part 3.1(2) (m) 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
The courts therefore have the remit to assist the parties by providing an ENE service, so that a judge will act as evaluator. Until the present case, it has not been settled law as to whether the court could require ENE without the parties consent, the present case clarifies the issue.
Facts
The present case involved a claim under the Inheritance (Provision for Family and Dependants) Act 1975 claim by a widow against her husband’s estate. The defendant was her stepson who opposed her claim. The estate was substantial, worth £5.5 million (approximately) and was held on trust with an income to be paid to the widow and the capital and income held on discretionary trust for a number of beneficiaries including the stepson. At an initial directions hearing, the claimant had requested that the defendant consent to ENE but the request had been refused. At first instance the judge stated that the case “cries…out for a robust judge-led process” by which the case might be resolved by agreement however she was of the view that she did not have power to order ENE given the defendant’s refusal to agree it and correspondingly it was held that ENE could not be ordered without the defendant’s consent. The decision was appealed.
Court of Appeal reasoning
The Court of Appeal noted that CPR 3.1(2)(m) did not expressly require the parties’ consent and went on to consider whether a requirement for consent should be implied. It held that as ENE was an express part of the court process, it did not obstruct the parties’ access to the court and therefore did not provide an ‘unacceptable constraint’ on the parties.
The Court of Appeal considered the absence of any express requirement for consent in CPR 3.1(2)(m) to be a powerful indicator that consent was not required. To interpret CPR 3.1(2)(m) otherwise was contrary to the overriding objective, in particular with regard to saving costs and court resources and it therefore allowed the appeal and proposed that the court direct an ENE be held as soon as possible.
Benefits of ENE
The Court of Appeal in this decision referred expressly to the benefits of ENE, despite parties often being resistant to the process. For commercial parties, the benefits include:
- Assisting with the identification/clarification of central issues in dispute
- Speed - it can be a relatively quick process and much quicker than a trial process
- A focussing of minds and reality check for the parties
- Identifying the weaknesses in a party's case and any obvious gaps in evidence
- Assisting parties to understand the risks in pursuing litigation
- Facilitating settlement discussions where it encourages the parties to move towards a realistic starting position
Even if the ENE does not ultimately result in settlement, the process itself can assist with reducing the areas in dispute and focus attention on the more important aspects of the case.
Commercial parties should have ENE in their dispute armoury and bear it in mind in any litigation whether or not an opponent is prepared to consent to it.
