Alternative Dispute Resolution as the Heart of the Civil Justice System - Essay Example

?Alternative Dispute Resolution (ADR) The essence of Lightman J’s ment is that it can be disastrous not to avail of mediation as an alternative dispute resolution before resorting to litigation in courts. It all started with Lord Woolf’s reforms way back in 1999 as part of his “access to justice” proposals. Lord Woolf saw alternative dispute resolution methods as potential resource for quicker justice to parties at dispute. Mediation, as one of the methods was seen as an ideal way of resolving disputes between parties without having to go through the rigours of court procedures. Early 1990s had been witnessing delays in the conduct of litigation in courts exacerbated due to complex procedures and interlocutory battles entailing heavy costs to the parties and the state exchequer as well. As stated by the English Centre for Effective Dispute Resolution (CEDR), British commerce can achieve cost savings of over ? 1 billion by avoiding time spent by the management, spoilt relationships, lost productivity and legal fees.1 Mediation method already has helped save about ? 6.3 billion since 1990.2 In a classical case decided in 2007 involving a claim of just ? 6,000, parties are reported to have spent nearly ? 100,000 as litigation costs. 3 Perceptions about mediation are still mixed as revealed by a survey of the Ministry of Justice in 2007. For 38 % of the respondents, mediation had resulted in cost savings and for 29 %, costs had increased. Those who had settled cases through mediation informed of cost savings except for 7 % of them for whom costs had increased. For those whose cases could not be settled through mediation, 45 % of them stated cost increases, 19 % cost savings and 28 % did not see any difference in costs.4 Sequel to Lord Woolf’s report, the U.K. Government made it a condition as far as possible to provide for ADR in all government contractual disputes arising out of procurement contracts. 5 As a result, ADR was resorted to in 336 cases out of which 241 were settled with a resultant cost savings of ? 120.7 million. 6 in Royal Bank of Scotland v Secretary of State for Defence, the successful defendant was refused costs as it had not opted for ADR in line with the above said ADR pledge by the Government.7 An audit report of 2007 stated that non-availing of mediation in family disputes entailed additional cost of ? 74 million through legal aid i.e average legal cost for a non-mediated case amounted to ? 1,682 as against ? 752 for a mediated case. 8 Warren K. Wrinkler Chief Justice of Ontario notes with caution that mediation if not successful ends up as an additional layer in litigation costs. 9 Time efficiency is another factor apart from cost factor. According to a report of the CEDR, in England 75 % of their cases were settled instantly (same day). 10 Mediated family disputes cases are settled faster at 110 days than non-mediated cases which take 435 days to settle. 11 Regardless of cost effectiveness and time efficiency, flexibility available in mediation towards mutually consensual resolution is absent in court led litigation. The English Alder Hey case that involved more than 1000 claims is a classic example of successful mediation that resulted in apology and erection of permanent memorial for the children whose organs had been withheld by the hospital. ADR provides for not only procedural flexibility but also of flexibility of outcome.12 Mediation offers larger number of remedies that include apology, explanation, enduring relationships, and undertaking by one party an obligation without any legal compulsion. 13 In order to have an effective mediation system, the 2008 EU Directive applicable for cross-border disputes states that member states should have legislation that ensures mediation that guarantees a predictable legal framework, provides for flexibility in procedures and ensures autonomy of parties. Besides, the mediation should be conducted in an effective, impartial and competent manner.14 The EU directive adds that it can be applied to internal mediation of the respective member states though it does not apply to pre-contractual negotiation, cases of adjudicatory nature such as judicial conciliation schemes, consumer complaints, arbitration and expert determinations etc. 15 In the U.K., ADR with the public and private partnership was responsible for 25 % reduction in claims in country courts within four months of implementation of Woolf reforms, and by January 2000, the claims fell further by 23 percent both compared to the same period in the previous year. In a survey, 41 % of the respondents had opted for ADR compared to 30 % in the year 1998.16 Lightman’s statement that appeared in 2001 in the decision relating to Hurst v Leeming [2001]17 whether still relevant or not in the light of the above scenario is to be further examined in the following pages. It may be appropriate to mention here the statement of Lawrence West QC that appeared in Times April 2009 that ten years of Civil Procedural rules following Woolf Reforms have been a disaster to the civil justice system in so far as it encourages the use of appropriate ADR methods.18 In reply, Judge Harris QC refutes the statement of Lawrence by saying that Woolf reforms mainly aimed at avoiding delay, complexity and cost. The new Civil Procedures Rules (CPR) 1998,19 have totally transformed the culture of court-based litigation in that lawyers now pursue their clients’ interests in a proactive manner and as per Chapter 10 (6), a new genre of mediators has emerged as a professional group consisting of former judges and practitioners . It is also not a condition for the mediators to be legally qualified. Legal practitioners engage in mediation part-time. Besides, mediation is not compulsory. 20 Reverting to the decision in Hurst21, Lightman conceded that though mediation was not compulsory, neglecting the opportunities afforded by it for a realistic resolution would be fraught with adverse consequences. The consequences the Judge alluded to must have been the delay, complexity and cost that literally deny access to justice in its real sense. What the judge means is it is suicidal for the parties to refuse to avail of mediation, given the fact that it affords flexibility of procedures, time and even the final outcome. Lightman considered the reasons adduced by the defendant such as heavy costs had already been incurred, claimant’s contention that the defendant had been guilty of reckless negligence and that he had a sure case, for his refusal to agree to mediation. The main reason was that he had already incurred heavy costs and mediation would only add to costs with no guarantee for the claimant agreeing to the outcome and the ultimate possibility of the claimant going to court to stake his claim. In fact, the defendant had acted in a realistic way although Lightman saw his contentions in a different light and sanctioned costs on him in spite of finding the case in his favour. This manner of deciding a case is in the larger interests of litigant society. His justification was that in spite of the claimant being a hardcore litigant, there was no reason why mediation should not be opted since its outcome would be known only when tried. One cannot proceed with a foregone conclusion that mediation will be futile. Though mediation is not compulsory, litigants are given the option to bear costs even if successful. This is fair enough. However there is no guideline if both sides refuse to mediate. The logical way may be to make them bear costs equally. However, subsequent cases dealt with the issue whether it was right for the successful party to be burdened with cost sanctions. These cases which actually tested the validity of Lightman’s stance were Halsey v Milton Keynes General NHS Trust and Steel v Joy and Halliday. 22 In Halsey, it was observed that article 6 of the European Convention on Human Rights (ECHR) waived the right of access to court through an Arbitration agreement but without any constraint to the claimant. Applying the same analogy, Dyson L.J. was of the opinion that compulsion of ADR on the parties would also amount to a constraint on the access to court and hence a violation of article 6 of ECHR. Dyson LJ expressed that even if courts had jurisdiction to compel parties to mediation, he could not think of any circumstances to be appropriate to do so. He has cited the White Book (2003) volume 1 wherein voluntariness ensured effectiveness of ADR outcomes of which are non-binding and it therefore follows that court has no jurisdiction to compel ADR but it can only encourage and facilitate. Dyson LJ disagreed with Lightman and expressed that while awarding costs on the successful party as a departure from the general rule that costs should follow the event, the burden is on the unsuccessful party to show that the successful party unreasonably refused to agree to ADR. He went on to add possible grounds for refusal to agree to mediation could be the nature of dispute and points in favour. Nature of the case might be such that parties expected the court to set a binding precedent. ‘Merits- of -the -case- argument ‘ postulates that it is reasonable to refuse to mediation if one is sure of one’s case. 23 Lightman J responded by saying that litigation costs and withdrawal of legal aid justified mediation as a necessary palliative for the disadvantaged citizens having no scope for access to justice. Mediation could make an approximation to justice provided the two obstacles laid by Dyson L.J were removed. One, the stand that compelling a party to mediation against his will would be in violation of Article 6 of the ECHR. Two, burden on the unsuccessful party to prove that successful had to bear costs. As for the first one, ECHR article applied to only arbitration which imposed permanent stay on trial in court and not mediation which did not interfere with right to trial. He was of the view, compelling parties to mediation actually persuaded the unwilling party to be infected with the spirit of conciliation and settlement in due course during the mediation process. And that percentage of those ordered to mediate and ultimately settled was greater than those not ordered and hence not settled. As for the second one, the burden of proof required rested on the three factors. 1) The deprived class should be given a chance of approximation of justice through mediation; 2) it is common sense to hold that the unwilling party must be required to justify his unwillingness; and 3) court has an explicit duty encourage mediation and implicit duty to discourage refusals which are not justified. In support of lLightman’s views, European Commission after seeking the views of the member states held the position that mediation had an untapped potential for resolving disputes and providing access to justice for individuals and businesses and issued a Directive discussed elsewhere. The directive does mention that it is without prejudice to any national legislation making mediation compulsory and imposing costs sanction provided it does not take way right of access to judicial system. 24 Regardless of Lightman J’s criticisms, Halsey remains the authority as regards compulsory mediation in so far as it is not repugnant to ECHR article 6 and as regards the burden of proof on the unsuccessful party to show that the successful party unreasonably refused to mediation. Halsey’s decision has been followed in a Court of Appeal case Burchell v Bullard 25 which entailed a cost of over ? 160,000 for a claim ? 5,000 concerning a building dispute. In a 2008 judgement concerning Earl of Malmesbury 26 , a strange situation arose involving the claimant who agreed to mediation but acted in a repugnant manner during the course of mediation. Mr Justice Jack observed that his behaviour was tantamount to refusal to engage in mediation. In a prior case Dunnet v Railtrack27, defendants who won the case on technical grounds in the Court of Appeal were asked to bear costs as they ignored the Lower court’s direction to attempt mediation. The flat refusal by the Railtrack to mediate was based on their belief that that were confident of their success in appeal. This became a landmark decision which Lightman J also followed in his decision to justify costs sanction on the party who refused to mediate but ultimately succeeded. Justice Brooke commented that mediators were more skilled than lawyers and could provide mutually acceptable solutions which courts were incapable of providing. Practice manual states that court proceeding should be the last resort. It should not be started while settlement through mediation is actively being considered. Parties are expected to explore rapprochement through mediation or other methods without commencing court proceedings. In case of failure to resolve through ADR, parties must show the court that they made sincere attempt to find a solution through mediation or any other form of ADR as provided for in the CPR. A refusal is considered unreasonable dependent upon the nature of the case, merits of the case, the extent to which settlement has been tried, disproportionate costs of ADR, prejudice likely to be caused by any delay in setting and conducting of ADR and prospects for success through ADR. These are not exhaustive.28 Discussion and conclusion Courts have diligently followed the tenets of ECHR article 6 by not compelling parties to mediation but imposed a duty on the practitioners to persuade parties to agree to mediation and to offer a plausible explanation for refusal so as to avoid cost sanctions. What the parties’ repugnant behaviour during the course of mediation will entail is not clear for confidentiality reasons in that court cannot be privy to what transpired in mediation proceedings though in the above Earl of Malmesbury case, Judge was a witness to the claimant’s behaviour. It would be clear now that though Hurst case has significantly contributed to development ADR law, it is not an authority any longer and Halsey case should be followed instead for deciding on whether ADR should be resorted to or not before approaching courts. The only requirement for avoiding mediation or any other form of ADR is the proper justification to do so in order to avoid a potential cost penalty. The current position in law delicately balances the requirement of ECHR Article 6 and court’s duty to relieve economically disadvantaged litigants of costs involved in litigation. The balancing of both would ensure speedy as well as less costly access to justice. Dyson L.J.’s obiter dicta that ECHR Article should prevail and no compulsory mediation could be resorted through back door holds good until now and his proposition that the burden of proof is on the unsuccessful party to substantiate that successful party unreasonably refused to mediate is also innovative though bizarre. It is not out of place to mention that in the U.S., court directed mediation is compulsory yet it is not repugnant to human rights. In Singapore and other Commonwealth countries, mediation is more popular and has been an authentic form of ADR. Bibliography Cases Burchell v Bullard [2005] EWCA Civ 358.in Varda Bondy and Margaret Doyle (2011) “Mediation in Judicial Review: A practical handbook for lawyers”. < www.publiclawproject.org.uk > accessed 1November 2012. Dunnet v Railtrack EWCA Civ 302 Earl of Malmesbury v Strutt & Parker [2008] EWHC 424 (QB).in Varda Bondy and Margaret Doyle (2011) “Mediation in Judicial Review: A practical handbook for lawyers.” < www.publiclawproject.org.uk > accessed 1November 2012. Egan v Motor Services (Bath) Ltd [2007] EWCA Civ 1002 Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; Steel v Joy and Halliday [2004] 4 All E.R. 920. In Derek Roebuck, Michale O’Reilly, Gordon Blanke, Domique Brown-Berset, Hew R.Dundas, Arthur Harverd and Tamara Oyre (2008) “Alternative Dispute Resolution: An English viewpoint”. Arbitration, the international journal of arbitration, mediation, and dispute management. 74 (4) 347- 478 Hurst v Leeming [2001] EWHC 1051 Royal Bank of Scotland v Secretary of State for Defence [2003] EWHC 1479 Ch. Statutory instruments “The Civil Procedure Rules 1998, 1998No 3132 (L17) The National Archives” < http://www.legislation.gov.uk/uksi/1998/3132/contents/made > accessed 1 Nov 2012 EU Legislation and Cases “Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters.” < http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32008L0052:en:NOT > Accessed 1 November 2012. Command Papers and Law Commission Reports Annual Report Monitoring the Effectiveness of the Government‘s Commitment to using ADR 2005/2006 (Department of Constitutional Affairs 2006) CEDR UK ,Conflict is costing business ?33 billion every year (26 May 2006). in Law Reforms Commission “Consultation paper, Alternative Dispute Resolution” (2008).. Law Reforms Commission “Consultation paper, Alternative Dispute Resolution”.(2008) Genn Twisting arms: court referred and court linked mediation under judicial pressure, (Ministry of Justice Research Series 1/07, May 2007) New South Wales Law Reform Commission Report on Community Justice Centres (Report 106 - 2005) at 1.29. accessed 1 November 2012 Report on Legal aid and mediation for people involved in family breakdown National Audit Office, Legal Services Commission March 2007). Accessed 1 November 2012 U.K. Office of Government Commerce, “52338-SGP-Dispute Guidance” (Office of the Government Commerce, 2002).< http://www.ogc.gov.uk/documents/cp0077.pdf.> Accessed 1 November 2012 Books Andrews, Neil, The modern civil process: judicial and alternative forms of dispute. (Tubingen, Germany. Mohr Siebeck, 2008). Mistelis A Loukas, Chapter 7 ADR in England and Wales; A Successful Case of Public Private Partnership in Alexander Marie Nadja (2006) Global Trends in mediation (Netherlands: Kluwer Law International, 2006). Journals Berset, Hew R.Dundas, Arthur Harverd and Tamara Oyre (2008) “Alternative Dispute Resolution: An English viewpoint.” [2008] Arbitration, the international journal of arbitration, mediation, and dispute management. 74 (4) 347,478 Websites Minerva Mediation, “Mediation And Costs – The Consequences Of An Unreasonable Failure To Mediate” < http://minervamediation.com/mediation-and-costs.html > Accessed 1 November 2012 “Speech delivered by the Honourable Warren K. Winkler Chief Justice of Ontario, Access to Justice, Mediation: Panacea or Pariah?” (2007). Accessed 1 November 2012 . “The Third Mediation Audit (Centre for Effective Dispute Resolution”, November 2007) Accessed 1 November 2012. Newspaper articles West, L. ‘Have the Woolf reforms worked? ‘ The Times ( April 2009). Available at accessed 1 Nov 2012. Read More