A new provision in the Civil Procedure Rules (CPR) provides for early neutral evaluation (ENE) of claims; we consider the application of this form of alternative dispute resolution (ADR) to personal injury claims and potential difficulties that may arise.
The CPR were amended in October 2015 to reference expressly the courts’ power to hold an ENE hearing.
The new Part 3.1(2)(m) of the CPR provides that the court may:
“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.”
For those unfamiliar with ENE, it is a non-binding evaluation by a third party (in the CPR version it will be a judge) who reviews the papers and indicates who will succeed if the case proceeds. The evaluation can be limited to a specific issue or issues or extended to the whole case if desired. The ultimate aim is for the party who receives an unfavourable indication to give up, or, if that does not occur and at the very least, for the gap between the parties to be sufficiently narrowed for the case to progress to speedier resolution.
Personal injury claims
Our view is that ENE has a narrow application for personal injury cases and works best where the deadlock is a point of law, not requiring the third party to undertake a balancing exercise in relation to the weight attaching to opposing evidence. In that respect, it has a lot in common with the summary judgment procedure (see Part 24 of the CPR).
For example, we have used it in a tort case where the deadlock related to whether, and to what extent, the Defendant owed the Claimant a duty of care in novel circumstances where there was no pre-existing relationship. Each side submitted skeleton arguments. The indication was in our favour, following which the Claimant discontinued and paid our costs. From the Claimant's standpoint, he was able to risk manage a speculative claim at an early stage and limit the eventual costs liability.
We are not convinced that any CPR version maximises the ENE potential. Any post-litigation evaluation is not that ‘early’. Rather, the bigger potential gains arise pre-action.
A further obstacle is that, like mediation for example, ENE is an ADR mechanism that offers a good chance, but no absolute guarantee, that the return on your fees investment will be a final settlement. That is not an easy sell.
For the CPR version to gain traction, it may therefore have to be competitively priced. The court fees leaflet EX50 has not yet been updated to include any ENE pricing. We can therefore only assume that the fees will be in line with other hearings, for which the current rates are £545 in the fast track and £1,090 in the multi-track. Those court hearing fees are usually payable by the claimant, but there is an argument that the parties should ‘go halves’, so that both parties have financially invested and are motivated to take the process seriously.
In the personal injury sector, and especially at the lower claim value end, it will be difficult for private ADR providers to offer cheap enough pricing to entice parties into ENE, as opposed to rival models such as conventional offers and negotiations. From the commercial standpoint, the level of potential ENE referrals is unlikely to be sufficient to allow discounted pricing on a volume basis.
In summary, ENE is a welcome addition to the CPR and certainly has a place on the menu of ADR options. However, our prediction is that it will remain a niche procedure that a majority of claims professionals will never encounter during their careers. It is unlikely to revolutionise everyday practice, because other ADR models have a far wider application and offer better prospects of a measurable end result.