District Judge Stephen Gerlis emphasises the importance and cost-saving implications of using ADR before turning to court intervention


In setting up the Civil Procedure Rules 1998 (CPR), Lord Woolf declared that one of the working objectives for the new system of civil litigation was for the parties, whenever it is reasonable for them to do so, to settle their disputes before resorting to the courts. Optimistic though this aspiration was, wholesale alternative dispute resolution (ADR) has not yet taken off. Part of the problem is the availability of suitable schemes. There are, for example, only about six court-based schemes scattered around the country.


Professional ADR is still aimed primarily at commercial disputes where it has had a significant degree of success. Notwithstanding the clear willingness of the courts to punish parties in costs where ADR ought to have been pursued, we are nowhere near a culture of ADR as the natural first step in a dispute. Many parties still want their day in court, particularly in those cases lower down the scale.


The parties are encouraged to settle via various methods - from the pre-action protocols to the potential costs penalties that may face a party after judgment for failure to have contemplated settlement previously, under the general discretion of the court pursuant to CPR, rule 44. The parties also have an opportunity in the allocation questionnaires to request a stay for settlement.



But can the court force parties to mediate? At first glance the answer would appear to be 'no' as there is nothing in the CPR to say so. However, in Shirayama Shokusan Co Ltd & Others v Danovo Ltd [2003] All ER (D) 114 Dec, Mr Justice Blackburne, sitting in the Chancery Division, took a somewhat robust approach to the court's powers. He said it was clear that the court had jurisdiction to direct ADR even in the face of hostility from one of the parties. He pointed to the overriding objective enshrined in CPR, rule 1.1 by which sub-rule (2) required the court to save expense by, among other things, dealing with the case in ways that were proportionate to a number of factors, including the amount of money involved. Therefore, he concluded, the court has power to order mediation in an appropriate case.



Is that the green light to forced mediation? Perhaps not, as Halsey v Milton Keynes General NHS Trust and Steel v Joy [2004] EWCA Civ 576 illustrate. In these two cases - in which parties were resisting orders for costs against them on the basis that the other party had unreasonably refused mediation - the Court of Appeal took a different view as to the power of the court to compel mediation. It emphasised the duty of the court to encourage mediation, and the parties to contemplate it, but nevertheless fell short of saying the court could compel it. Indeed, such compulsion, they suggested, was likely to fall foul of article 6 of the European Convention on Human Rights, by unfairly providing an obstacle to a party's right of access to the court.



They also referred to paragraph 1.4.11 of the 2003 White Book, which speaks of ADR being a voluntary process. Compulsory mediation that is opposed by parties would only add to the costs and postpone a final determination by the court. By all means the court should examine the reasons for any intransigence and try to encourage the parties in the ADR process, but compelling it would go too far. The judgment does not mention Shirayama, but the decision clearly puts a stake in its heart.



It is settled law that the fact that parties are negotiating is not an excuse for disobeying timetables set down by the court. Nor will an application for an adjournment on that basis fall on sympathetic ears (see Assiouti v Hosseini (1999) Lawtel, 26 November, CA, and Target Holding Ltd v Brian David Oxborough & Others (1999) Lawtel 28 October).



The fact is that, since the introduction of the CPR, the responsibility for managing cases is that of the court. The rules and practice directions make it clear that a final hearing will only be adjourned in exceptional circumstances and as a matter of last resort (see practice directions 28 5.4(6) and 29 7.4(7)). Settlement discussions do not count.


The answer is simple - waiting until the last moment to try and adjourn a hearing is not the right way to proceed. If a solicitor is concerned about wasting money on preparing a case that might well settle, then he should let the court know what the present situation is as soon as possible and apply for directions, if necessary. It is much better to take the initiative in such circumstances than to be re-active.



In Tasyurdu v Secretary of State for the Home Department [2003] EWCA Civ 447, a renewed application for permission to appeal was set to take place on a Monday morning. Lord Justice Sedley had spent part of the weekend reading the papers only to be told half an hour before the hearing that the appellant had agreed to withdraw the appeal some time during the previous week. The Master of the Rolls described this as 'infuriating' and said it operated as a frustration of the use of the court's resources contrary to the overriding objective in CPR, rule 1.3. 'Even if a case settled very late in the day steps should be taken to notify the clerks of the judges concerned in advance.'



In Yell Ltd v Garton [2004] Independent Law Reports, 11 February, CA, the claimant was appealing a decision of the Employment Appeal Tribunal to the Court of Appeal. The hearing was set to start on a Monday and to last two days. At 6pm on the previous Friday counsel were informed that the case had settled but they thought it would be too late to notify the court.



In fact notification only took place at 9am on the Monday by which time the damage had been done - the judges had read the papers in advance, probably over the weekend. The Court of Appeal pointed out that the Royal Courts of Justice has a 24-hour switchboard and through it the judges could be contacted to prevent them wasting their time. The warning given in Tasyurdu was repeated. If a case has settled or is likely to settle, the court should be told as soon as possible.



District Judge Stephen Gerlis sits at Barnet County Court