ADR in England and Wales

A. A Brief History of the Use of ADR Processes in

England and Wales

The UK has a history of experimentation with different types of ADR. London has been a centre for arbitration since the late-1800s.

Since the 1960s ADR has been part of world-wide efforts to innovate in the area of civil justice. At the earlier stages of this development, the involvement of lawyers was contentious. This was partly a reaction to fact that lawyers create litigation and settle­ment in their own image. Lawyers were, however, also part of the move away from the litigation paradigm, particularly in commercial sphere and in family and matrimonial matters. From the mid-1970s, conciliation was used in trade union disputes, through the Arbitration and Conciliation Advisory Service (ACAS).^[3192]

In construction disputes, ADR was given statutory foundation. Under a procedure established by the Housing Grants, Construction and Regeneration Act 1996, parties could seek interim or non-binding adjudications by legal or construction profes­sionals. This was so successful that ADR became the norm in construction disputes, rather than the alternative.^[3193]

The success of ADR influenced court schemes. The Commercial Court was an innovator in the use of ADR. In 1993, a practice statement was issued indicating that the court’s judges would not be involved in ADR processes, but would invite parties to consider whether their use might be appropriate.^[3194] The Commercial Court scheme, established in 1994, became increasingly committed to ADR, ^[3195] issuing a second practice statement encouraging its use in 1996.^[3196] In the County Courts, ‘arbitration’, a more relaxed judicial procedure, was used for small claims in the County Courts.

There was some evidence that ordinary people welcomed ADR. In a survey con­ducted by the National Consumer Council, many consumers expressed a preference for ADR over court-based dispute resolution.^[3197] Three-quarters of respondents would have preferred some form of ADR to the process of civil litigation they had actually experienced. In six out of ten personal injury or divorce case the parties would have preferred mediation. Less than one in ten favoured a full trial as the best means of resolving their dispute.

ADR was not universally successful. Based on the advice in a Law Commission Report, the Family Law Act 1996 proposed to introduce mediation for divorce.^[3198] The legislation, due to come into force in 2000, was scrapped after pilots. This was partly because ADR added an average of £150 to the cost of settling a child custody dispute.^[3199]

B. The Range of Private ADR Services

There are a wide variety of private ADR schemes and providers covering different processes and methods of ADR. This account is not intended to be exhaustive, but to provide an idea of the type and scale of ADR organisations and processes in England and Wales.

i. Organisations

a. Providers

The London Court of International Arbitration (LCIA) grew out of a business need for cheap and effective dispute resolution in the late-nineteenth century.^[3200] It is now a private organisation providing international dispute resolution expertise in arbitration and mediation in major commercial cases. The court has 35 members, drawn from eminent commercial arbitrators. No more than six can be from the UK at any one time. In 2012, a total of 265 arbitrations were referred to the LCIA, in addition to 12 requests for mediation or some other form of ADR. Over 80 per cent of the parties involved in the LCIA’s pending cases are not English and, apart from the UK, where 16 per cent of the parties were from, no more than 10 per cent come from a single country or region.^[3201]

The LCIA publishes its own forms and rules, both of which are often used by parties even when the LCIA is not involved in a dispute.

Lawyers were among the first groups to develop ADR services. In the first wave, IDR Europe, established in 1989, is an organisation created by solicitors. It draws mediators from a network of law firms. Another major provider is the Centre for Effective Dispute Resolution (CEDR), established in 1990. CEDR was sponsored by the Confederation of British Industry and leading law firms. Its aims were to promote ADR in general and mediation in particular.

CEDR has a particular, but not exclusive, focus on commercial work. It has worked with major national and international agencies and law firms to develop practice and train mediators. It now offers a range of services, such as early neutral evaluation, as well as mediation. It handles around 600 major mediations a year and seeks to influ­ence the development of ADR in the international sphere.

b. Membership Organisations

Despite the size and importance of the sector, there was no membership organisa­tion for mediation until 2003, when the Civil Mediation Council (CMC) was formed. CMC covers civil, commercial, workplace and other non-family mediation. It is an unincorporated association with around 400 members drawn from providers, academ­ics, professional bodies and government departments. CMC accredits organisations providing mediation services, which then accredit mediators. Since providers are not obliged to seek accreditation, CMC cannot be said to regulate the sector.

ii. Areas of Work

a. Business and Commercial

The use of a country’s dispute resolution fora boosts its invisible earnings and the UK, London in particular, aims to be a major international centre for dispute reso­lution.

The UK has a patchy record as a leader in dispute resolution methodology. It was one of the last major countries to adopt the UN-sponsored model code for arbitration.^[3203] The Arbitration Act 1996 was introduced to revise an inadequate regu­latory framework^[3204] for international arbitration. There were high hopes for the Act in terms of changing the environment for international dispute resolution. Lord Justice Saville, chair of the Departmental Advisory Committee of the Department of Trade and Industry, hoped that, as a result of the legislation, the UK would ‘retain pre­eminence in the field of international arbitration, a service which brings this country very substantial amounts indeed by way of invisible earnings’.^[3205]

The Arbitration Act contained mandatory and non-mandatory provisions.^[3206] Those dealing with the conduct of proceedings were mainly non-mandatory.^[3207] This was intended to provide the parties with the maximum flexibility to design their own process without intervention by the court, except in limited circumstances.^[3208]

b. Industry

Many industries have adopted ADR as a routine response to disputes. The construc­tion industry is a good example. It provides about 10 per cent of gross domestic product and most projects involve problems of some kind. The number of major cases litigated has fallen by three-quarters since 1995, following the Civil Procedure Rules (CPR) and increased use of arbitration and mediation.^[3209]

c.

At the other end of the commercial scale, ADR is sometimes specified in standard contracts. For example, it may be used for handling a variety of consumer complaints. Such schemes do not necessarily have high levels of satisfaction with consumers, usually because the outcomes are perceived as unfair.^[3210]

C. PublicADR

ADR has entered the mainstream of dispute resolution in various areas of public dispute resolution provision. For example, in the Technology and Construction Court (formerly the Official Referee’s Court), which deals with complex disputes, judges are available to act as arbitrators if the parties choose. These involve, for example, build­ing or other construction disputes, engineering disputes, disputes involving specialised advisers relating to the services, claims by and against local authorities relating to their statutory duties concerning the development of land or the construction of buildings, and claims relating to the design, supply and installation of computers, computer software and related network systems.^[3211]

The adoption of ADR reflects a conscious decision by the state that can be inter­preted in different ways. A benign view is that ADR expands consumers’ range of choice of dispute resolution options. A more cynical view is that it reduces state responsibility for providing more conventional routes to justice through legal aid. ADR can therefore be seen as a means of expanding the state, in the form of civil society, using informal networks to replace formal institutions.^[3212] Through this lens, ADR is an expansion of state power using ‘covert manipulation’, community justice schemes and the like, depriving users of the coercive powers of courts.^[3213]

i. Mediation in Civil Litigation

a. Civil Procedure Rules

Lord Woolf’s review of the civil justice system in 1996 proposed an increased role for ADR.^[3214] The CPR, introduced in 1999, contained a number of measures to ensure that the mediation option was at the forefront of dispute resolution options.

With enthusiastic encouragement from judges, it appeared that mediation had a strong initial impact, but it did not last. Cases filed in the Queen’s Bench Division dropped dramatically with the introduction of the CPR. In 1995, there were around 120,000 writs and originating proceedings issued in the district registries and just over 5000 in the Central Office.^[3218] In 1998 these had fallen to around 95,000 and 2000. In 2000, 20,000 cases were issued in the district registries and just over 5000 in the Central Office. They have remained just below this level since. This dramatic fall was probably not wholly attributable to mediation, but to other requirements of the CPR, such as pre-action protocols.^[3219] CEDR references, for example, actually dropped, from 468 in 1999 to 338, by 2001.^[3220]

b. Mediation Pilot Schemes

Anticipating the CPR, a number of mediation pilot schemes were run as adjuncts to courts, mainly the County Courts. Evaluations of a patchwork of voluntary schemes were conducted for the Central London County Court (1996) and Court of Appeal (Civil Division) (1997) and in Birmingham (2001), Leeds (2000) and Manchester (2000). These local schemes were often different in character, but the results from most were broadly similar.

Analysis of the mediation pilot schemes showed that they were relatively successful.^[3221]All dealt with significant volumes of cases, around a third of cases issued in the period of the studies. They varied in their remit between the different County Courts, dealing with small claims in one and fast and multi-track in others, but were similar in approach. Three-hour mediation slots were allocated to parties volunteering to mediate or directed to do so by the court. All dealt mainly with contractual claims, but some with housing repairs and personal injury.

All of the court-based mediation schemes had relatively high settlement rates and satisfaction levels from both solicitors and parties. Some parties experienced pressure to settle from mediators, but did not necessarily resent this. There were generally clear savings of court time. Two schemes, a small claims support service and a small claims mediation scheme, were effective in achieving settlements by using telephone ‘shuttle diplomacy’.^[3222] This raises questions about the need for ‘formal’ mediation in all cases, and justifies interest in a more holistic approach to defining issues and dispute resolu­tion processes.

One of the longest standing schemes continued to have mixed results. The Automatic Referral to Mediation scheme at Central London County Court evoked a high rate of objection and ‘opt out’ and added between £1000-£2000 to the cost of unsettled cases.^[3223] A parallel voluntary scheme was also relatively unpopular, particularly for personal injury cases, and settlement rates were disappointing at less than 50 per cent.

c. Other Forms of State Support for ADR

The push towards mediation received massive support from the state. A Community Legal Service Fund covering litigation and mediation costs^[3224] replaced legal aid, and assistance could be refused where parties had unreasonably failed to try mediation first. In March 2001, the Lord Chancellor’s Department announced that ADR would be used to replace litigation wherever possible. The government also pledged to include ADR clauses in all standard government contracts.^[3225] In 2004, the Lord Chancellor’s Department agreed with the Treasury to use ADR to reduce County Court and High Court cases by 200,000 cases, or 10 per cent, to reduce log jams and cost.^[3226]

ii. Mediation in Family Matters

Since 2000, those seeking legal aid to pursue family law cases were usually required to attend a mediation information and assessment meeting (MIAM) before a court application could be issued. This increased the number of family mediations from around 800 a year to 14,500.^[3227] In the year to 31 March 2013, more than 30,000 couples attended publicly funded MIAMs, resulting in over 13,500 mediations. Around two- thirds of those starting mediation reached an agreement without entering the court system.

The Legal Aid and Punishment of Offenders Act 2012 (LASPO 2012) cut funding for divorce, except for cases involving domestic violence. Legal aid continued to be provided for mediation. Since LASPO 2012, the number of mediations has dropped dramatically. This is possibly because parties are anxious about cost when legal aid is not normally available for divorce. It could also be because parties previously seeking legal aid for divorce are now escaping the mediation net. This means that parties that might have unexpectedly reconciled through mediation will no longer do so. Parties who are determined to divorce will, however, find it difficult to avoid mediation.

The Family Procedure Rules 2010 place a heavy emphasis on mediation.^[3228] Courts enquire whether a pre-action protocol requiring consideration of mediation has been followed.^[3229] The court can take into account failure to comply with the protocol in assessing the conduct of a party and can unilaterally refer the matter for arbitration. In proceedings involving children there is an automatic first hearing dispute resolu­tion appointment, attended by the Children and Family Court Advisory and Support Service, to consider mediation or other processes.^[3230] When dealing with financial aspects of a case, the court must consider, at every stage in the proceedings, whether mediation is appropriate.^[3231] It can adjourn at any time for mediation to take place.^[3232]

iii. Judicial Mediation in Employment Tribunals

A mediation scheme was piloted in a few Employment Tribunals between 2006 and 2007. The role of mediator was fulfilled by volunteer tribunal chairs trained by repre­sentatives of ACAS. The responsible government department commissioned detailed statistical comparison of cases undergoing mediation and those where there was no mediation.⁶¹ This found no discernable or statistically significant impact on early resolution attributable to judicial mediation. Employers tended to be more satisfied with the process, while employees often wanted a more evaluative approach from the judge.

There were however, some ancillary benefits from the judicial mediation scheme. Notable among these were cases in which employers came to understand employees’ feelings better and acknowledged that discrimination had occurred. This sometimes laid the foundation for resumption of employment. Over 30 per cent of the employ­ers revised their employment and discrimination policies following the mediation. Judicial mediation was made available for discrimination cases at Employment Tribunal regional offices in England and Wales from January 2009.

IV.