Lomax v Lomax – Is alternative dispute resolution wholly voluntary?
This appeal didn’t arise from a property related dispute, but from an inheritance claim. However, as nothing exists in a vacuum, this case is of wider significance to the litigation landscape, including property disputes.
The claimant, Mrs Lomax, brought a claim for reasonable financial provision from her deceased husband’s estate. In the course of that claim, she sought an early neutral evaluation hearing.
Early Neutral Evaluation (“ENE”) is a form of alternative dispute resolution (“ADR”) which involves a neutral third party (who is often a judge) providing a non-binding assessment of the merits of the parties’ cases. The idea is that hearing what one evaluator (likely to be a judge) thinks about the case and the most likely outcome can help promote settlement in that it forces the parties to take a realistic view of their case (if they have not done so already!).
However, ENE is not commonly used in the UK. Mediation (which involves a third party seeking to guide the parties to a mutually acceptable resolution) is, in practice, much more common. The defendant in the proceedings had little appetite for ENE and saw mediation as the preferred option for ADR.
The High Court judge, having considered the relevant parts of the Civil Procedure Rules (which govern the conduct of litigation), concluded that she did not have the power to order ENE where one of the parties did not consent to this. This was despite their view that the case was one ‘which cries, indeed screams out, for a robust judge-led process to focus on the legal and factual issues… and perhaps even craft a proposed solution for the parties to consider’.
The claimant pursued an appeal to the Court of Appeal on this point and asserted that the judge was entitled to order ENE, even though the defendant objected. CPR 3.1(2)(m) states that the court may “take any other step or make any other order for the purpose of managing the case … including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.” The claimant argued that this does not expressly say that the parties must consent to ENE and that there was no reason to imply that consent was required.
The defendant argued that the case law on mediation indicated that the court did not have the power to order the parties to engage in any form of ADR; compelling parties to engage in ADR would obstruct access to the court and various court guides suggest that consent is required for ENE to be ordered.
The Court of Appeal decided that CPR 3.1(2)(m) did not expressly refer to consent and if the intention had been that consent was needed, this could have been made clear. Further, the Court concluded there was no reason to imply any limitation requiring consent of the parties.
Picking up on the other arguments – although the court guides were helpful, the terms of the CPR couldn’t be disapplied by what was suggested by them. Also, an ENE hearing would not obstruct access to the court. Whilst it may assist the parties in resolving the issues, it would not prevent them from continuing with the proceedings if a settlement could not be reached. The result was that a ENE hearing should be listed as soon as possible.
The Court of Appeal’s decision is a significant development in the ongoing debate as to whether the civil courts can compel ADR and whether they should do so. It has been argued that forcing parties to participate in ADR undermines their right to access the courts and merely serves to increase costs where settlement proves impossible.
It was emphasised that the decision concerns ENE (which is mentioned in the CPR rule above) rather than mediation. It remains to be seen whether the courts take this further and order parties to engage in mediation where they have no desire to do so.
Of course, the decision whether or not to mediate remains an important question in any event, particularly as an unreasonable refusal of a mediation offer can have significant costs sanctions.
If you are looking for advice on the best way to move a dispute forward, contact our dispute resolution team on 01752 203500. If you have any questions about property disputes, contact me at jonathan.bouchta@GAsolicitors.com.
Jonathan Bouchta, partner