UK: Review of ADR in the Chancery Division of the High Court

A review of current practices and procedures in the Chancery Division of the High Court (known as the Chancery Modernisation Review) was undertaken in 2013, led by Lord Justice Briggs.  The final report, published following consultation on a provisional report, includes a chapter focusing on the relationship between case management in the Division and parties' use of structured ADR (that is, dispute resolution processes involving some element of formality rather than simple settlement between the parties).

The report's observations and recommendations in respect of ADR do not amount to any dramatic development in the court's approach but, rather, echo a number of themes that UK courts more widely have increasingly been seeking to emphasise in case law.   The most recent notable judgment in this regard was the Court of Appeal's decision in late 2013 in  PGF II SA v OMFS Company Limited [2013] EWCA Civ 1288 (discussed in our briefing  'Failure to engage with ADR proposals: UK Court of Appeal extends the Halsey principles'), in which the court took the opportunity to strongly reiterate its encouragement of ADR in civil disputes.  The fact that the Chancery Modernisation Review mirrors closely a number of the court's observations in that case is unsurprising given that the lead judgment in the case was given by Briggs LJ.

Key features of the report include -

Recommendations:

• That, prior to the first case management conference in certain categories of proceedings, parties be required to specifically consider and articulate their views about the potential for ADR  -  including suitablity ('the cases in which no ADR is attempted should be rare'), type (facilitative or evaluative? private or court-provided?) and timing;
• That case management conferences should normally include a thorough review of ADR options, and that the progress of a chosen ADR option should thereafter be monitored on any subsequent case management occasion (to the extent possible without impinging on the confidentiality of the ADR process);
• The continued extension of 'financial dispute resolution' (FDR) (a court-provided process inherited from the Family Court) into Inheritance Act and probate cases;
• That judicial early neutral evaluation (ENE) be further explored as a tool for encouraging settlement in at least some Chancery cases (with it being left open as to whether the ENE should be provided by the case management judge or another judge in any particular case).

ADR as a tool for narrowing issues?

Without making any formal recommendations on the subject, the report also advocates more generally a culture change in how parties view the potential benefits of mediation.  Echoing a point made in the recent PGF II v OFMS judgment, Briggs LJ expressed the view that an ADR process that fails to produce a full settlement may nonetheless greatly contribute to the narrowing of the ambit of a dispute and to the economical disposal of the remaining issues by the court.

However, he acknowledged that that view 'did not strike much of a responsive chord' among consultees on the provisional report.  The main perceived problems with mediation in particular playing that role were that (i) the parties, being focused on achieving a complete resolution of the dispute, are unlikely (at least in the present culture) to give priority to reaching and formally recording a partial agreement disposing only of certian issues and (ii) it would require at least some waiver of the cloak of confidentiality that is a key feature of mediation.

Of course,  this aspect of the report was considering the potential for mediation to play such an issue-narrowing role in a formal sense.  That is not to say that unsuccessful mediation discussions cannot informally result in a more economically conducted litigation if they serve to highlight to the parties where the real battlegrounds lie in their dispute and encourage them to concentrate their resources in those areas.

The report has been welcomed by the Chancellor of the High Court, who commissioned the review. Further announcements regarding the implementation of the recommendations are expected in due course.