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Alternative Dispute Resolution - Essay Example

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This essay "Alternative Dispute Resolution" assess whether the statement that the Civil Procedure Rules – have been a disaster for the civil justice system is in relation to Lord Woolf’s recommendation that the judiciary encourages the use of any alternative mechanisms for the resolution of disputes…
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Alternative Dispute Resolution
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?We have now had ten years of the Woolf reforms and experience proves that the reforms – known as the Civil Procedure Rules – have been a disaster for the civil justice system.” (Lawrence West QC, The Times, 29 April 2009) Critically assess whether this statement is accurate in relation to Lord Woolf’s recommendation that the judiciary “encourage the use of any appropriate alternative mechanisms for the resolution of disputes.” (Access to Justice – Final Report (2006), CH.10 (6))  Introduction In his article that appeared in Times on April 7 2009, Lawrence West Q.C, a leading advocate from Henderson Chambers, states that courts no longer bristle with litigants and lawyers after the reforms of Lord Woolf were brought into force pursuant to his final report in 1996 on Access to Justice. He says that it is because of stifling of the litigants’ freedom by the new requirement of putting up of all the evidences relied on by them upfront before the commencement of trial under the pretext of saving time and cost to the government in conducting trials. The exchange of documents must take place beforehand and no evidence can be allowed to be produced at the end of the trial to cause embarrassment to the opponent and leave him bewildered with no instant answer. Apart from this, the new requirement literally results in the trial being conducted twice. Any deficiencies on the part of the disputing parties are liable to be penalized by extra cost for having wasted court’s time and the other party’s time. This development has driven the litigants to seek redress out of court or suffer without their dispute being resolved. For example, as against 350,000 new cases filed in 1990 and 1991 before the Queen’s bench, cases filed after the reforms were 150,000 each year especially after the expansion of jurisdiction for country courts. And now since the year 2002, new claims have dropped to less than 20,000 per year. He says that this is a reflection of litigation being settled by other than legal means. The new CPR has led to judges’ over-involvement in the case management which increases only the litigation cost with ninety percent unsure whether a case would be tried at all.1 Immediate reaction from Judge Charles Harris QC on April 16, 2009 notes that Lawrence’s comments are exaggerated. He points out that the interim report of June 1995 on Access to Justice was concerned with three evils obstructing the way to justice. They were “delay, complexity and cost”. According to him Woolf reforms have reduced delays by virtue of case management by the judiciary which prevents litigators from prolonging their cases. As for complexity, unlike old Sale of Act 1979, modern day legislations like Consumer Credit Act 2006 are not fully comprehensible to both the lawyers as well the litigants. This complexity had crept in into criminal law and civil procedure as well. Hence, Lord Woolf aimed at simplicity for the Civil Procedure Rules (CPR) so that they are easily comprehended by both the lawyers and litigants. He therefore introduced shorter expressions like “claimant” “statement of the case” and “part 20 defendant”. The rules empower a judge to do what is fair and appropriate. As for its complexity, it has become more complex going by the fact that the CPR prior to 1997 which ran into 3,933 pages is now 5,827 pages which included a supplement and further 287 pages of guidance. As against Lord Woolf’s objective of reducing the multiplicity of practice directions, the opposite has happened. While the fast track rules for straight forward cases run into seven pages, practice directions consist of nine pages. He says that well drafted rules do not require practice directions and they do not make sense to the litigants either. As for access to justice, Judge Charles Harris says that it depends on how quickly and easily proceedings could be commenced. Prior to CPR, it was very simple with a mere letter to the opponent for which if there was no reply, straight away case could be filed with a statement of claim. Post CPR, the litigant has to comply with protocols that contain as many as 135 pages of codes which if not followed has the prospect of facing sanctions. His conclusion is that Woolf reforms have made the access to courts more complicated and more costly. But, once the case is taken up, it can progress without hassles, have a focus and is unlikely to be delayed for want of court time. He further adds that English legal system has not been destroyed and only it needed to reduce preparatory paper work. 2 In this backdrop, a question has come up as to whether the Lawrence West QC’s statement is applicable to ADR which the Woolf Reforms urge to use for hassle free access to justice vide Chapter 10 (6) Final Report.3 It is logical that steep reduction in new claims in the courts should reflect in steep increase in the use of ADR. The following pages will examine the present status of the use of ADR instead of litigation to arrive at a conclusion whether the CPR post Woolf Reforms has been a disaster to ADR in particular despite the fact ADR is part of civil justice system, especially in the light of Judge Harris’ refutal of Lawrence West’s claim.4 The new code Civil Procedures Rules 1998 (the CPR) 5 has altered the culture of English court-based litigation which means that as per the expectations of the judiciary, lawyers have started pursuing their clients’ interests without adapting an antagonistic style but with co-operative ethos instead. In response to the Chapter 10 (6), private mediators have emerged as a new professional group consisting of former practitioners or judges. It is not necessary that mediators should be legally qualified, though the practising lawyers engage in mediation on part-time basis. Mediation has not been made compulsory. There is no need for the court to examine the case before it is referred for mediation. Though no English court can directly engage in mediation or pass an order that parties must mediate, it can exert indirect influence on mediation by staying of the court proceedings or make an adverse costs orders on the party which unreasonably rejects suggestion for mediation. The defending party can make suggestion for mediation either immediately or after the commencement of court proceedings. The court can by itself suggest it without the defendant making a suggestion. Settlement can take place at any point of time during the proceedings or even after the judgment or when an appeal is pending. Parties may be motivated to resort to mediation under the influence of pre-action protocols.6 Rise in the incidence of ADR Of late, courts have become the forums of last resort for dispute settlement with the emergence of alternative dispute settlement mechanisms. Apart from the recommendations of Woolf reforms, reasons for the rise of ADR in England are many. Economy reason is widely being cited. Public at large including corporations do not want to spend largely on litigation as lawyers tend to charge on hourly basis for litigation preparation which aspect (lawyers’ remuneration) has not been touched by Woolf reforms. Even Government departments resort to arbitration for economy reasons as they believe court system is a potential drain on public resources. For example, Access to Justice Act 1999 7 has put a ceiling on the expenditure on construction and maintenance of court buildings, I.T. systems, remuneration to judges and court staff including their pensions and legal aid. Other than economic reasons, are aversion to uncertainty, delay and publicity arising out of court litigation. In court system, lawyers gain more control over case than the disputants. On the other hand, disputants can keep the dispute within their confines by private settlement negotiations eventually allowing a mediator to intervene.The real situation is that Government and judiciary do have roles to play whether it is private or court litigations. The civil justice system envisages four main areas of dispute resolution: “settlement, mediation, arbitration, and court of law”. It is a complex interplay of private mechanisms and public facilities necessitating mutual co-operation “between private agents and public servants”.8 While these are the positive reasons, negative reasons are also advanced against the ADR mechanisms. Calling it a ‘flight to private justice’, disadvantages are lack of secrecy, private status of the mediator who is specially hired for the purpose unlike a public judge and the possibility of partiality from the mediators.9 Moreover it cannot be said that ADR is non-mandatory, considering the following what are known as Pre-action duty of Parties to consider ADR. The CPR practice direction states the courts increasingly take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is likely. Therefore, the parties should consider whether some form of alternative dispute settlement would be more suitable than litigation, and if so, endeavour to agree which form to adopt.10 Mandatory mediation cannot be explicitly mandatory in view of the EU’s Unfair Contract Terms Directive which has almost banned the mandatory mediation since it is likely to deny or delay access to justice. It is argued whether the same reasoning can hold good if access to court is more expensive. Woolf reforms’ directive to use ADR is yet to be fully implemented in the U.K. It is argued that right to access to justice should be understood in terms of the most suited redressal mechanism for a given dispute. Legal profession must use this intrepretation. English courts have not rigorously used the discretion to refer cases to ADR and to impose costs on the party unreasonably rejecting the suitable ADR forum suggested by the courts. In the U.S . ADR is being increasingly resorted to, because pre-dispute mandatory arbitration is permissible under law.11 In the U.S. , arbitration which is one of the forms of ADR, has become a “new litigation” 12 variant as it is becoming increasingly “expensive, lawyer-driven and rule bound”.13 People are shifting back to the informal process of mediation which is promising “speed, cost and control”.14 Mediation has therefore become a federal courts mediated primary process 15 as a kind of “bargaining in the shadow of law”.16 This is a clear shift from adjudication to ADR which amounts to breaking of the court’s monopoly. As said earlier, a EU directive is already in place requiring member states to develop mediation in cross border disputes.17 As had been advocated by Jeremy Bentham that there should be funding of access to justice including subsidising transportation and lodging in the courts’ vicinity, England had a Legal Aid Programme for the purpose. This funding was with view to place the opposing parties on equal footing. Those who met certain criteria such as “meeting the means test” could seek assistance from the private bar which paid the prescribed fees. In 1980s, legal assistance rose phenomenally from 100 million pounds to 250 million pounds for cases mostly related to family matters. By mid-1990s, legal assistance cost was 600 million pounds.and major portion went to lawyers as their remuneration. The alarming increase prompted the Government to restrict eligibility resulting in a coverage of 40 percent of population as against 80 percent earlier. The Access to Justice Act 1999, put a ceiling on the funds to be made available for approaching courts and also changed the organisation structure of the legal aid providers. This discouraged people from approaching courts. In spite of the reforms initiated by Lord Woolf, mediation was not being chosen except under coercion both by the lawyers as well as the litigants who preferrerd some adjudicatory procedure instead.18 Reviews of the effect of Woolf Reforms are positive as well as negative. It has been reported that in England Government expenditure on civil and criminal cases amounted to more than 2 billion pounds. While most of the researchers found that reforms have led to clearer structure of work, issues of delay and cost remained.19. ADR provisions have also added to costs.20 Ten years after Woolf Reforms, Lord Justice Jackson in his final report on the Review of Civil Litigation Costs, 21 states that case management by the court, with the active roles of parties, has been one of the essential features of Woolf Reforms. His findings on the case management outcomes are mixed in that some areas seem to perform well and in some other areas, it has not been satisfactory. This results in wasted costs. He has suggested two more reforms to avoid costs. One of them is ADR which he says is not being attempted in cases suitable for ADR. Though it is the prerogative of the parties to choose to go in for trial, he says mediation is still a viable means for settlement for which parties may be readily amenable. In Chapter 36 of the report, Lord Justice Jackson insists that mediation is the most important form of ADR. It is because a well conducted mediation facilitates settlement of most of the civil disputes if not all. The disputing parties without knowing fully well the benefits of mediation, do not choose the option readily. Joint settlement meetings is another form of ADR especially suitable for personal injury cases. The working of a pilot project of joint settlement in Manchester shows that this form of ADR has been quite effective. The Designated Civil Judge in Manchester Richard Holman has said that the joint settlement meetings are suited to claims which are multi-track from ? 500,000 onwards because of the expense involved. Neutral evaluation is another form of ADR conducted by a person who commands respect of both the parties. In fact, judicial neutral evaluation has been proposed by the Association of Her Majesty’s District Judges to Civil Justice Council and it is learnt that a pilot project would come up soon in Cardiff. Justice Jackson states that ADR is crucial in deciding costs. Mediation is particularly useful in reducing costs. Structured cost regime will promote ADR. He says many cases settle very late after incurring huge costs. Settlement of possible cases by some form or other must therefore be made at the earliest opportunity so as to avoid increasing costs.22 The final report records the submission during phase 2 by various stakeholders. This is very important in the context of the question this paper is attempting to answer. Confederation of British Industry (CBI) records its strong inclination to avoid litigation and resort to ADR for settlement of disputes mainly with a view to save litigation costs. Centre for Effective Dispute Resolution (CEDR) already conducts 4,000 mediations per year in addition to 2,000 mediations relating to small claims. CEDR has said that very few cases settle during the pre-action protocol period. Justice Jackson says that procedural judges should verify whether mediation was tried and in case of dissatisfactory replies, they should “impose a sanction on either parties or both”. Judges are entitled to include mediation in the case management time- table even in cases having no scope for mediation. CEDR also has stated that not all the district judges and masters are keen on mediation mainly for want of training. Civil Mediation Council (the CM Council) is another council devoted to promotion of mediation. It has reported 6,473 mediation during the first half of 2009, 8,204 in 2008. The council promotes mediation in all the areas of dispute resolution and mentions the benefits of mediation in important areas such as Mercantile Court Cases, Neighbour disputes, Chancery litigation and others. Small Claims Mediation Service won CEDR award and EU award in 2008 for excellence. The CM Council also informs that personal injury and medical negligence practitioners who had been averse to mediation are now coming forward to choose mediation. The CM Council cites “ Law Works” which provides pro bono mediation with its 150 trained mediators on the panel. This service is not being used to its fullest potential. “ Inter-Resolve” is a company that provides a low cost telephone mediation service. The CM council points out the inadequate public awareness among small and medium firms, insurers, central and local government bodies. It insists that the Courts incorporate procedure to refer to Law Works those who qualify for pro bono assistance. Justice Jackson has taken similar submissisons from Lloyd’s Underwriters, Association of Her Majesty’s District Judges, Association of Northern Mediators, Individual mediators, Law Society, Bar Association, Mediation institutions for personal injury claims such as Trust Mediation Ltd and others such as Solicitors, Liability Insurers, Defendant Solicitors, and The Medical defence Union. They have all echoed in one voice, the advantages of mediation.23 Yet, his final assessment is that benefits of mediation are not fully understood by the stakeholders. His conclusion is that while smaller businesses do not appreciate , claimants for personal injury cases believe that mediation is not suitable for personal injury claims. He says that mediation is not a universal panacea despite its salient features. He insists that timing is important. It should be neither taken up too early nor too late. Not too early, because parties may not have come to full grasp of each other’s cases. Not too late, because of the possibility of costs being incurred significantly. There should be initiative from the judiciary to encourage mediation. There should be a change of culture rather than change of rule. He agrees that judges should be trained on mediation. As the information on ADR is fragmented, there is a need for a single authoritative handbook on ADR. Besides, there should be public education through brochures to be supplied to every litigant coming to court.24 A comparative study of functioning of ADR mechanisms in other countries would shed some more light on whether England is on the right path. To begin with England and Wales, it has been testified that ADR is characterised by Public and Private Partnership which has been quite successful. During the four months immediately after implementation of Woolf Reforms, county courts witnessed a 25 percent reduction in the number of claims compared to the same period in the previous year. By January 2000, there was a further fall by 23 percent. Surveys held by law firms for assessment of the impact of Woolf Reforms, revealed that two-thirds of the respondents felt that the reforms did not deter them from starting proceedings though 43 percent of them settled cases even earlier.However, ADR or mediation was becoming popular since 41 percent of them had resorted to ADR as against 30 percent in the year 1998. 25 In Italy, it took 1290 days (3.5 years ) for a trial for civil action to last and another 10 years for final judgment in case of appeal. This prompted some Italian litigants to approach European Court of Human Rights accusing their Italian government of denial of justice. The European Court censured the Italian government ordering compensation to individuals in the year 2000 that exceeded € 600,000,000. Because of this state of affairs, ADR has been the preferred medium of dispute resolution.26 In France, there were about 11,000 instances of victim-offender mediation during the year 1992. The New Code of Civil Procedure enacted in 1995 enabled judges to appoint mediator for three months renewable for another three months and keep the mediation under their control 27 In Germany, German Insolvency Law of 1999 requires debtor and creditor to first engage in mediation before resorting to litigation. Germany’s Introductory Law of the Code of Civil Procedure which came into force in 2000 made court-related mediation mandatory for ceratin disputes such as financial disputes of upto 750 Euro, neighbourhood disputes and defamation disputes not resulting from the media.28 Law Society’s impact asseesemnt of Woolf Reforms on ADR gives mixed results in the area of personal injury claim, clinical negligence and housing disrepair. The overall finding of the research two years after the reforms, is that Woolf Reforms have been regarded as a success especially in regard to settlement which is easier to achieve because of clearer structure and greater openness. Part 36 offers from the claimant can be a potential ground for making tempting offers which the defendant cannot afford to ignore. Pre-action protocals were found to be positive for those involved in personal injury and clinical negligence. Post Woolf, settlement is now speedier. Time for settlement process is now reduced to 123 days from 170 days earlier. The difference is considered statistically significant. Mediation in personal injury claims was totally absent earlier. But solicitors from the claimants side feel mediation and personal injury claims are not compatible with each other.29 The research concludes in respect of personal injury as “ Thus, overall, mediation was seen as solution looking for a problem, rather than a specific means of addresing the issues involved in personal injury litigation”30 In regard to clinical negligence, there is increasing evidence of shift towards settlement. But mediation has not been popular. It is felt to be suitable for only small value claims.31 Conclusion Lawrence West’s accusation is that CPR post Woolf Reforms has been a disaster to the civil justice system as litigants are literally prevented from approaching courts because of the burden of pre-action protocols. On the other hand, Judge Charles Harris directly answers in the negative except for the complexity. The basic idea of Woolf Reforms is to make available access to justice without hassles apart from the concept that parties to the dispute should be on an equal footing. The question here is whether Woolf reforms have had the same effect as Lawrence West is claiming , on ADR also. It would be clear now that Lord Woolf makes it clear that ADR should be encouraged as far as practicable. It is difficult to suggest that the new CPR has been a disaster to the ADR. ADR includes settlement, mediation, concilliation and arbitration. Lord Woolf envisaged that parties must have an opportunity for resolution of their cases out of court but it did not mean that parties must be at the mercy of jungle law. Pursuant to the reforms, ADR practice has emerged as a separate profession and been proliferating for good. The foregoing account gives a positive view of ADR which is being well received among the litigants. ADR is certainly a blessing for the litigants as it removes uncertainty, offers promise of some setllement or other with give and take from both sides and above all quicker resolution than in a court of law. In a few leading countries attempt on mediation is mandatory before court can take the case on its files. In the case England and Wales, it is only persuasory though court can impose cost on the party who is unreasonably not coming forward to agree to an ADR. Litigants are intelligent enough to appreciate the freedom they can enjoy during the course of ADR processes where they can always give counter explanations without any formality. They also know that they have no such freedom or informality in a court of law. Courts are at best reserved for making ruling on points of law rather than facts. The main reasons for Lord Woolf’s advocacy of ADR are costs and delay involved in litigation. It should be noted that judiciary is ready and willing to part with its monopoly on justice. This can only be with good intentions as ‘justice delayed is justice denied’. Disputing parties have clearly got the message and started capitalising on Woolf reforms. It is not that ADR is the end of it all. If it is not successful, parties can always approach court for redressal without the loss of period of limitation. Adversarial culture has only contributed to the court’s work load and burden on the exchequer. ADR is the only means to reverse this trend. It can therefore be concluded that pre-action protocol in litigation is one thing and ADR is another. Lawrence West’s analogy cannot be applied to ADR though it is part of civil justice system. It should be remembered that Lawrence West’s statement as such has been well refuted by the Judge Charless Harris. In this paper, more emphasis is on mediation among various forms of ADR as Justice Jackson himself has acknowledged. Arbitration is adjudicatory and is now a ‘new litigation’ though there is no doubt it is time-saving and it gives parties some degree of freedom which is not available in courts. Bibliography Official materials Woolf H. (1996): Access to Justice — Final Report to the Lord Chancellor on the Civil Justice System in England and Wales, (HMSO, London). Goriely Tamara, Moorhead Richard, Abrams Pamela (2002) More Civil Justice? The impact of the Woolf reforms on pre-action behavior Research Study 43, The Law Society and Civil Justice Council Statutes Access to Justice Act 1999, 1999 C.22, The National Archives, Available at accessed 15 May 2011. The Civil Procedure Rules 1998, 1998No 3132 (L17), The National Archives, Available at < http://www.legislation.gov.uk/uksi/1998/3132/contents/made > accessed 15 May 2011 Books Alexander Marie Nadja (2006) Global Trends in mediation (Netherlands: Kluwer Law International). Andrews, Neil. (2008) The modern civil process: judicial and alternative forms of dispute. (Tubingen, Germany. Mohr Siebeck). Cortes Pablo. (2010) Online Dispute Resolution for Consumers in the European Union. Oxon, Taylor & Francis. De Palo Gluseppe and Comrlnelli (2006) Chapter 10 Mediation in Italy: Waiting for the big Bang in Alexander Marie Nadja (2006) Global Trends in mediation (Netherlands: Kluwer Law International). Mistelis A Loukas (2006 ) 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). Resnik Judith and Curtis Dennis (2011) Representing Justice: Invention, Controversy, and Rights in City-States and Democratic Court Rooms. USA Yale University Press. Articles in periodicals Harris, C. (2009, April 16). Sad and unsatisfactory - but not destroyed. Times Online , p. Available at accessed 15 May 2011. West, L. (2009, April 9). Have the Woolf reforms worked? The times , p. Available at accessed 13 May 2011. Read More
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