Early ADR assessment needed

Halsey v Milton Keynes General NHS Trust and others (Court of Appeal - 11 May 2004)

The Court of Appeal has ruled the burden is on the unsuccessful party to show why the general rule on costs should be departed from on the grounds that the successful party has refused to agree to participate in an alternative dispute resolution.

The Court of Appeal said that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court and would violate article 6 of the European Convention on Human Rights (the right to a fair trial). However, all members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR.

Relevant factors concerning whether the refusal of ADR is unreasonable are: (1) the nature of the dispute. For example, where there are allegations of fraud, whether injunctive relief is essential, or where a party wants a point of law resolved; (2) the merits of the case. The fact a party reasonably believes he has a strong case is relevant to the question of whether the refusal to mediate is unreasonable; (3) the extent to which other methods have been attempted. The fact settlement offers have been made, but rejected, is a relevant factor; (4) whether the costs of ADR would be disproportionately high. This is important where, on a realistic assessment, the sums at stake in the litigation are comparatively small; (5) whether any delay in setting up and attending the ADR would be prejudicial.

If mediation is suggested late in the day, acceptance of it may delay the trial; 6) whether ADR had a reasonable prospect of success. The court will have to take an objective view of this; (7) the extent of the court's encouragement to mediate.

COMMENT: Practitioners should consider whether their case is suitable for ADR at an early stage but any refusal of ADR should be reasonable to avoid any adverse costs orders at the end of the case. - Adam Lidster, BLM London.

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