E&W: ET Presidential Guidance on Alternative Dispute Resolution introduces potential for mandatory disputes resolution appointments

The President of the Employment Tribunals (Barry Clarke) recently published new Guidance on Alternative Dispute Resolution ("ADR"). For the most part this is sensible updating of the Guidance issued by his predecessor in 2018, outlining the different forms of ADR that parties are encouraged to use.  However it introduces a new form of ADR for more complex claims, namely the "Dispute Resolution Appointment" ("DRA"). This is unusual because it is both mandatory where a judge considers it appropriate (unless a party can persuade the judge otherwise) and evaluative in nature. It follows the trend now being seen in the civil courts of putting more pressure on parties to resolve their disputes via ADR irrespective of their wishes. Parties will need to be familiar with the types of cases in which they will be ordered, how they are conducted and of the need to prepare for them appropriately.

Although the Guidance recites the advantages of ADR, there are clear hints that the purpose of the Guidance is driven by the heavy cost to the public purse from administering the Employment Tribunal Service and the concomitant desire by Government for parties to be given greater encouragement to resolve their claims by agreement, principally via greater awareness of the different forms of ADR available. Four forms of ADR are now said to be available, all of which are confidential:

1. ACAS Conciliation
2. Judicial Mediation
3. Judicial Assessment
4. Dispute Resolution Appointment

The Guidance provides a description as to how each operates and Protocols setting out more detail in relation to those at 2-4 above.

ACAS Conciliation

Very little is said about ACAS Conciliation probably because it has existed for some time and nothing appears to have changed. A common perception is that it works best for the less complex cases, particularly where one or both of the parties is unrepresented. However, the assertion in the Guidance that encouragement to use ACAS is regularly provided at case management meetings is not reflected by our own experience; in fact far too little mention is made of ADR at all at those meetings, no doubt because Employment Judges are so busy that they simply don't have the time to cover anything bar the essentials.

Judicial Mediation

Judicial Mediation in the Tribunals is said to have a "success rate" of 65-70% and to have saved 22,000 sitting days since its inception in 2009. Its Protocol states that while it can potentially apply to any case in practice it will rarely be made available to any case with a listing of less than three days. This excludes many tribunal claims and paints a sharp contrast to the position in relation to small claims in the civil courts where mediation (albeit by court officers rather than judges) is  strongly encouraged - and will soon be mandatory for the lowest value claims. Moreover, it appears that even if all parties actively want Judicial Mediation it may not be offered, although the criteria for making the decision as to whether it should be offered are not specified.

Judicial Mediation is intended to be facilitative although the Protocol suggests that the Employment Judge will "sometimes manage [a party's] expectations by pointing out [any wishes] that are unrealistic." Our experience is that judicial mediators in fact can vary considerably as to how facilitative or evaluative they are. While the Protocol emphasises that the mediation can start relatively early at around 9.30 am it doesn't specify when it usually ends. Again, our experience is that this can often be relatively early – around 5.30 pm-6.00 pm which can be frustrating given that often it can take the best part of a day to move the parties to agreed terms and negotiating the terms of the settlement agreement can then take a further considerable amount of time.

Two features of this Protocol can perhaps be seen as surprising. Firstly, Judicial Mediation is seen to be less suitable if there is more than one claimant or respondent; this would appear to exclude many discrimination claims where individual respondents are routinely joined alongside the employer respondent, often with the same advisers (some such cases may now be suitable for the new DRA procedure discussed below).

Secondly, Judicial Mediations are now to be usually held by telephone or video (while they may be held in person, no criteria are provided as to the circumstances in which this may occur). Given the President's previous stated preference for in person hearings over remote hearings, it seems anomalous for judicial mediations not to be customarily heard in person given that these are at least partly intended to allow parties "their day in court". Further, while mediations – of necessity – were held remotely during lockdowns, given the raw emotion so often visible in employment disputes one would have thought that they would be more effective held in person given the need to deploy the mediator's particular skills of empathy and communication. We would therefore hope that requests by the parties for in person Judicial Mediations would be looked on favourably.

Judicial Assessment

This is a comparatively recent innovation, the idea being to give the parties a relatively early neutral evaluation of their prospects of success. In principle this sounds helpful but in practice it doesn’t seem to have gained any traction, as evidenced by the fact that no details are provided in the Guidance of the number of cases where it has been used or hearing days saved. That is consistent with the wider experience in the civil courts regarding Early Neutral Evaluation ("ENE"), whether by judges or other respected neutrals.

The reasons for this are not clear but are likely to be a combination of the fact that it is consensual (and a party who knows their case is weak is unlikely to want that flagged to the other party) and that when first introduced the idea was to offer the assessment shortly after the first case management hearing, whereas at that stage in many cases the information available to the Judge Assessor would be insufficient for them to be able to provide a definitive view. While the Judicial Assessment Protocol now comments that disclosure or exchange of witness statements may need to have been completed before there is sufficient information to hold a judicial assessment hearing, the former factor is in our view likely to continue to make this form of ADR unattractive for many, particularly those who are unrepresented, such as to render it something of a "dead duck". And for the more complex cases, Dispute Resolution Appointments are likely to become the norm (see below).

Dispute Resolution Appointment

This is a new form of ADR and potentially of some significance, particularly for those involved in more complex cases. Unlike all forms of ADR used in the Employment Tribunal to date, DRAs are mandatory in cases where the judge considers them appropriate.

Their introduction was piloted in the West Midlands during lock down in July 2020 and are clearly thought to have achieved their aim of encouraging settlements of claims before the substantive hearing: it is claimed that in the three year period of their operation some 200 DRAs have been held resulting in a net saving of over 1000 sitting days. This is, on the face of it, impressive. The criteria for deciding whether to order the holding of a DRA is unclear; the relevant Protocol specifies that they are intended for cases with a listing of at least six days but ultimately the Regional Employment Judge or an Employment Judge nominated by them will decide. There is also likely to be regional variation as apparently the decision on the number of DRAs to order will "depend on available resources and operational requirements".

A particular feature of interest is their mandatory element. While the Protocol specifies that parties may make submissions as to why a DRA should not be held, the criteria for the subsequent decision as to whether or not to hold one is not stated. Moreover, failure to attend a DRA without good reason "may" amount to unreasonable behaviour for the purposes of a future costs application by the other party.

While the mandatory nature of DRAs only requires the parties to attend them, as opposed to agreeing to be bound by the outcome, this still represents something of a sea-change in the approach to ADR in the Employment Tribunal  - and yet the pilot scheme appears to have worked well and without the level of opposition which the potential application of mandatory ADR has attracted in the civil courts. The reason for this may ultimately be a pragmatic one; the attraction of introducing the pilot scheme during lockdown was that it would enable real progress to be made in managing complex cases which might otherwise have just been held in abeyance while the Tribunals struggled to clear the ever-mounting backlog of cases. In any event the figures appear to speak for themselves and DRAs are something that all parties will need to be aware of.

It appears that DRAs will operate in a similar way to Early Neutral Evaluations in the civil courts. Where a judge considers a DRA appropriate, it will be fixed shortly after the exchange of witness statements and one of the parties (presumably the employer) will be asked to provide an agreed file of documents including the pleadings, case management orders, list of issues, witness statements, expert evidence and "a limited number of other key documents". The DRA will usually take place remotely and last 2-3 hours. Nothing is stated about the provision of written submissions although we envisage that parties are likely to want to rely on them. The Judge will then "endeavour to provide a view as to whether either party is being unrealistic, either in respect of the issues they are raising or the amounts they are claiming or disputing. [They may also] express an opinion as to the strength or weakness of the claim or response (or parts of them)." Any such view will be non-binding and must be kept confidential. Despite the non-binding nature of the view, the fact that an experienced Employment Judge will be providing a view on the merits of the dispute pretty close to the time of the hearing is clearly significant and parties will need to prepare carefully for all DRAs. While the statistics to date suggest that these are likely to produce more settlements, it will come at the price of the additional costs required to prepare for and attend the DRAs which will often take place at a time after counsels' brief fees (or several tranches of them) have been incurred.

Interplay of the methods of ADR

The Guidance makes the point that these methods of ADR are not necessarily to be used exclusively. For example, a judicial assessment could then lead to a judicial mediation. Similarly, a DRA may then be followed by a judicial mediation if it helps narrow the issues between the parties.

Conclusions

Overall the Guidance and Protocols are a helpful reminder of the key role that ADR plays in the resolution of employment disputes. They are written in accessible language suitable for the many litigants in person who now use the Employment Tribunals. However, it will be important that the tribunals themselves, and the Employment Judges, take every opportunity to inform users of the service of the existence of this Guidance for it to have the maximum intended effect.

Moreover, we consider that in one respect the Guidance has missed an important opportunity, namely the ability to educate users of the service of the existence of workplace mediation. While it could justifiably be said that the Guidance should focus on methods of ADR provided by the Employment Tribunals themselves, mention is made of ACAS Conciliation and yet none is made of the fact of workplace mediation which is now available at a significant number of workplaces in both the private and public sector. This is all the more surprising given the significant number of disputes in the Tribunals which take place while the employment relationship is still in existence.

For further discussion of the momentum toward compulsory ADR for civil claims, see this post on our ADR Notes blog.