On 1st October 2024 amendments were made to the CPR whereby the Court can order Alternative Dispute Resolution to take place.
Justin Valentine, Head of Clinical Negligence reviews these amendments and recent case law and provides practical guidance on how this increasing emphasis on ADR, particularly mediation, can best be negotiated by clinical negligence practitioners.
From 1st October 2024 a number of amendments were made to the CPR to the effect that the Court can order Alternative Dispute Resolution (“ADR”) to take place and can make appropriate costs’ sanctions in the event that it is not. These changes put into effect the Court of Appeal’s judgment in Churchill v Merthyr Tydfil CBC [2023] EWCA Civ 1416 that a Court has the power to stay a claim for, or order, unwilling parties to engage in ADR provided that the power is exercised in such a way that a party’s rights to a fair trial under Article 6 of the ECHR is not impaired.
The changes made to the CPR were:
- CPR 1.4(2)(e) dealing with the court’s duty of active case management, now includes “ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution”.
- CPR 3.1(2)(o) includes the power to “order the parties to participate in ADR”.
- CPR 29.2(1A) provides “When giving directions, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution”.
- By CPR 44.2(5)(e) when deciding what order to make about costs the conduct of the parties includes “whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution”.
In what must be one of the first cases dealing with these rule changes, in DKH Retail Limited v City Football Group Limited [2024] EWHC 3231 (Ch) the Court granted the claimant’s application for an order for mediation in a trade mark dispute case notwithstanding the defendant’s objection. The claimant contended that the dispute was capable of resolution, was not a particularly complex case and that there were several variables in the dispute which might allow an out-of-court compromise of a nature not available in a judgment. The claimant also noted that there had been no mediation, there had been settlement negotiations but they were unsuccessful and the trial, which was imminent, would cause the parties to incur hundreds of thousands of pounds of further costs.
The defendant did not dispute the power of the court to compel mediation but submitted that there was no realistic prospect of success of mediation in the case, that both parties wanted their position to be judicially determined and that it was very late in the day.
Despite the defendant’s objections Miles J ordered mediation. He held:
- … in many cases the parties’ positions in the litigation are diametrically opposed and it may easily be said that each party requires a judicial determination. But nonetheless the parties come through ADR to recognise the desirability of settling for less than their strict legal rights and compromising their positions. Experience shows that mediation is capable of cracking even the hardest nuts. The process sometimes succeeds in cases where the parties appear at first to have intractable differences. Here, as the claimants said, everything would be up for grabs at a mediation, including the form of representation of any branding on the relevant kit, timing and money. The claimants are also right to say that the dispute is self-contained and that a mediation would be able to focus on possible solutions rather than raking over historical grievances.
- I see some force in the defendant’s submission that it is late in the day to be seeking an order, but it may also be said that there is some advantage in the parties’ positions having been crystallised through pleadings and the service of witness statements. It is indeed sometimes an objection to mediation that it is premature, proposed at a stage when the parties’ positions are unknown. That cannot be said here.
- There is also some force in the submission of counsel for the defendant that these are commercial parties with experienced solicitors and that if there was realistically to be a settlement, one would have expected it already to have been reached. But that argument does not do full justice to experience, which shows that bringing the parties together through mediation can overcome an entrenched reluctance of parties to negotiate, even where sincere. The purpose of mediation is to remove roadblocks to settlement.
In a postscript to the judgment made on 13th January 2025 Miles J noted that “on 13 January 2025 the parties notified the court that they had settled their dispute” adding weight to the judge’s comments.
Experienced clinical negligence practitioners regularly reach settlement through ADR usually, where it is proportionate to do so, via a joint settlement meeting (“JSM”). Court orders already include a requirement that parties must consider compromising the litigation by any means of ADR (including mediation) and that any party declining to engage in such a process must serve a witness statement giving their reasons which will be shown to the trial judge when questions of costs arise.
In that context, it may be forgivable for clinical negligence practitioners to think “What does this rule change bring to the party?”. The answer, in broad terms, is two-fold. Firstly, timing and secondly, mediation, rather than a JSM, is clearly the ADR of choice for the Courts.
At what stage is ADR best undertaken?
In DKH Retail, the parties were trial ready which made the making of an order compelling mediation unproblematic. But what if the Court orders mediation earlier within the proceedings?
Bristol County Court, for example, is now operating a “stay to mediate” pilot scheme which applies to most county court multi-track cases including claims for personal injury (which encompasses clinical negligence).
In relation to timing, the order is made after receipt of Directions Questionnaires; the Explanatory Notes stating “The legal costs of each party are likely to increase substantially for the costs and case management conference and subsequent phases therefore the parties are encouraged to mediate at this stage.”.
Presumably it would be open to the parties to apply to the Court to defer mediation on the grounds, for example, that (1) valuation of the claim would not be possible until condition and prognosis evidence is complete, or (2) that until breach and causation evidence has been disclosed a mediator would struggle accurately to assess the respective parties’ positions or (3) the parties intend to resolve the dispute at a JSM but the stage has not yet been reached for that to happen (in which case they would be wise to say when that stage will be reached).
Exchanging expert evidence, even on a without prejudice basis, prior to ADR risks losing one of its key advantages – early resolution of the claim. There must be sufficient condition and prognosis evidence to permit a realistic valuation of the claim but it is expensive and time-consuming to perfect liability evidence and there is a risk that such disclosure does not resolve the dispute. There may then be a suggestion for without prejudice joint reports which still might not resolve the key issue(s) or the parties’ positions shift but do not come closer. There is little point in replicating the Court’s procedural steps in relation to expert evidence unless it is clear that this will lead to early resolution.
Moreover, compelling mediation at an early stage may cut through parties’ positions (Miles J’s “hardest nuts”). There is distrust by both parties. Defendants may propose ADR but be explicit that they have no intention of compromising the claim. Claimants may fear being forced to compromise at a level far below that they consider reasonable. For their part, Defendants may fear an attempt to achieve some settlement on a weak case barely supported by expert evidence but which will ensure the payment of legal costs. These perceptions are a barrier to settlement which a skilled and experienced mediator may be able to resolve.
The advantages of mediation
The amendments to the CPR refer to ADR not mediation. However, it seems that mediation rather than a JSM is the Court-preferred mode of ADR as in the Bristol pilot scheme and DKH Retail.
Mediation is often advocated as a process for injured patients and their families to receive face-to-face explanations and apologies. This may be important though apologies can be equivocal and this can just as well be achieved at a JSM. It is also unlikely to affect advice in relation to reasonable settlement.
However, there are practical, more persuasive reasons for mediation over a JSM:
- Where there is a limited number of issues to be resolved especially as to quantum.
- Where trust is low. Experienced and skilled mediators are good at restoring trust and bringing the parties together.
- Where a JSM has already failed.
- Although generally facilitative (rather than evaluative), mediators are, in practice, adept at pinpointing weaknesses and strengths in a party’s case to encourage movement.
- An independent mediator is in a good position to ensure that both parties are happy with the outcome of the ADR.
- Mediation can be less stressful for the legal team especially if there is distrust between the legal representatives.
The advantages of JSMs
If the parties have a track record of good cooperation and the areas of dispute are relatively narrow, then they can likely resolve the outstanding issues themselves, ie at a JSM. A JSM may also be appropriate where there are complex issues of breach and/or causation requiring detailed knowledge of the medical arguments with reference to expert evidence.
In relation to mediation, much depends on the personality and experience of the mediator. Mediators may put settlement above all else and a mediator who seems to take one or other party’s perspective is unproductive. There is, accordingly, a concern with mediation of not being in control of the process and of being pressured to settle at a value considered unreasonable.
Both mediations and JSMs suffer from the notorious overly-tactical approach in relation to offers and counter offers. The aim of ADR is to find a middle ground but it may be that the middle ground for potential settlement is substantial. For example, a claimant may present a claim worth £1,000,000 but be prepared to settle for £400,000 whereas a defendant may be prepared to settle for £600,000. There is a concern that if the claimant informs a mediator of their bottom line then this is precisely what they will get. In that context the assertion of a “final offer” made by representatives at mediations and JSMs is often misused; too often that offer is subsequently increased (or reduced if made by the claimant).
Key practice points
The legal landscape is changing and the emphasis on ADR, especially mediation, becoming more pronounced. As in DKH Retail, parties can apply to the Court for an order compelling the other party to mediate. This is a new tool in the procedural toolkit with which litigators, claimant and defendant, must become familiar. Thought must go into when to conduct mediation and if, as appears likely, the emphasis by the courts will be on early mediation then evidence sufficient to value the claim must be sought before, or soon after, issue.
If ADR is conducted at an early stage thought must go into whether there is sufficient evidence for ADR to take place or whether such disclosure will impede (or complicate) settlement rather than promoting it.
Mediators are often chosen by claimants. If mediations become more commonplace, as is the Court’s intention, and are ordered in cases where defendants are reluctant to contemplate settlement, then the choice of mediator may become more contentious. This may require Court involvement.
In order for mediation to be successful, parties must be clear about their expectations. This is best achieved, as with JSMs, by the mutual exchange of position statements. A pre-settlement conference with the claimant is recommended at which parameters of settlement can be discussed.
The scope of a mediation is important. Mediations, or JSMs, dealing with liability only are unlikely to be effective; mediations should, it is suggested, explicitly deal with the entirety of the claim.
Consideration should be given as to whether the dispute can best be resolved at a JSM. This avoids the additional costs of a mediator and in cases where parties approach a JSM with realistic expectations will likely remain the preferred approach.
Justin is ranked as a leading barrister in The Legal 500. He specialises in clinical negligence and personal injury litigation acting almost exclusively for claimants. Find out more here.