The publication today by OUP of the "Jackson ADR Handbook" (the Handbook) forms part of the suite of measures introduced earlier this month to reform civil litigation in England and Wales. The Handbook is intended to inform litigants, lawyers and judges about the benefits of ADR in the hope that it will become more readily deployed in the context of civil litigation.

Background

Lord Justice Jackson's Review of Civil Litigation Costs in January 2010 (January 2010 Report) strongly supported the increased use of ADR and concluded that "ADR (particularly mediation) has a vital role to play in reducing the costs of civil disputes, by fomenting the early settlement of cases. ADR is however under-used." (6.3, executive summary)

Lord Justice Jackson endorsed a "serious campaign" to ensure that lawyers, judges and the public were alerted to the benefits of ADR in resolving disputes, and recommended that an authoritative handbook be prepared to provide practical and concise guidance on all aspects of ADR, and in particular the use of ADR in relation to civil claims in England and Wales.

The Handbook is authored by Susan Blake, Julie Browne and Stuart Sime of City University London assisted by an editorial advisory board

co-chaired by Lord Clarke of Stone-cum-Ebony and Lord Neuberger of Abbotsbury. The Handbook has been endorsed by Lord Justice Jackson, the Judicial College, the Civil Justice Council and the Civil Mediation Council, and every judge who hears civil cases will receive a copy as an aide. The Handbook will also be used in Judicial College and Continuing Professional Development training sessions.

Content of the Handbook

The Handbook covers the full gamut of ADR processes, from negotiation through to arbitration, and contains in depth guidance on mediation practice and procedure, as well as dedicated chapters on other ADR processes such as early neutral evaluation, conciliation, ombudsmen, expert determination and adjudication. Additional materials on mediation providers and specimen documents are available on a supporting website.

Will ADR use increase in light of the Jackson reforms?

The pre-April 2013 position

ADR has long been part of the framework for civil litigation in England and Wales. The Woolf reforms heralded the Civil Procedure Rules 1999, which impose on the English courts an obligation to encourage disputing parties to use ADR and a requirement on litigating parties to demonstrate that they have at least considered ADR at various stages of the dispute. A body of case law evolved over time establishing that the courts could punish successful parties to litigation if it was shown that they unreasonably refused to attempt ADR (Halsey v Milton Keynes [2004] 4 All ER 920 and subsequent case law – see our ADR blog for relevant case summaries and analysis). In tandem with this, the Pre-Action Protocols, Court guides and case management powers (for example to grant a stay for the parties to attempt ADR, or make an "ADR order" in the context of the Commercial Court) developed so as to strongly encourage litigating parties to attempt ADR. These always fell short of rules compelling parties to undertake ADR.

Other developments in recent years have also sought to support ADR as an adjunct to litigation:

  • The establishment of court mediation pilot schemes and the development of the Civil Mediation Online Directory (click here, here, and here for details from our ADR blog)
  • A wide number of respected bodies now support ADR and the Civil Mediation Council created in 2003, provides training and practice standards
  • The government's strong support for ADR, including its Dispute Resolution Commitment of 2011, strengthening an Alternative Dispute Resolution Pledge made in 2001. This requires all government departments to attempt alternatives such as mediation and arbitration whenever possible before taking a dispute to court (click here for details from our ADR blog)

Lord Justice Jackson's recommendations

Following a detailed review of ADR usage and after canvassing the views of a wide range of stakeholders, Lord Justice Jackson concluded that, despite the developments above, ADR was not sufficiently used or understood and this was hampering its more widespread use. "Its potential benefits are not as widely known as they should be" he wrote in chapter 36 of the January 2010 Report. However, Lord Justice Jackson has emphasised that, despite its many benefits, parties should never be compelled to mediate – "cultural change as opposed to rule change" was called for. As such, there have been no rule changes requiring parties to attempt ADR either before or during litigation as a result of the Jackson reforms.

The 2013 reforms

As well as the Handbook, a number of Lord Justice Jackson's other recommendations, implemented as a package from 1 April 2013, may also increase the use of ADR. These include the development of judicial case management to include costs management, and the introduction of costs budgets. Both should focus the parties on costs and ensure that ADR options are adequately explored. The revised 'proportionality' test for costs should also help to ensure that the cost benefits of ADR are better assessed.

Comment

We strongly endorse the publication of the Handbook. ADR processes are flexible and developing, however, and the Handbook constitutes an evolving work in the promotion of ADR rather than blueprint that limits the definition and changing nature of ADR processes.

We agree with Lord Justice Jackson's view that the use of ADR in the context of civil litigation should remain voluntary. ADR can only take place where both parties agree to it, and since much of the impetus for success comes from the positive message created by both parties agreeing to commit time and senior resource to the process, there is a significant risk that a mandatory ADR stage in litigation would become no more than a tick the box exercise. Moreover, in the commercial context, parties are well able to determine whether mediation should take place and at what stage. Therefore, it is right in our view that parties to litigation are not obliged to engage in ADR in England & Wales. A combination of a party’s obligations under the CPR, as well as the costs risk of refusing to undertake ADR, means that litigation lawyers must advise their client as to the ADR options available and the risks of failing to attempt it in some form.

Now more than ever, the judiciary plays an essential role in promoting mediation/other forms of ADR in appropriate cases, both within and even more importantly outside the commercial context, where litigants have less experience of ADR and may need guidance. Whilst judicial activism should be welcomed, we also believe that corporate clients have the ability to exercise greater control over outcomes and costs by pro-active use of ADR processes at the earliest appropriate opportunity (including through the incorporation of ADR clauses in contracts and the use of Early Case Assessment (ECA) procedures). Herbert Smith Freehills has extensive experience of working with in-house counsel to review their approach to effective dispute management and avoidance.

The Handbook can be purchased here.