Party consent and early neutral evaluation

In the recent case of Lomax v Lomax [2019] EWHC 1267 (Fam), Mrs Justice Parker held that she did not have the power to order early neutral evaluation (ENE) or financial dispute resolution (FDR) without the consent of the parties. The judge noted that the Civil Procedure Rules (including the White Book commentary) were unclear on the issue and she urged the Civil Procedure Rule Committee for clarification on whether ENE is compulsory and to consider providing a clear route to compulsory FDR in appropriate civil proceedings, citing Inheritance Act litigation as a prime example.

ENE and CPR 3.1(2)(m)  

ENE is an alternative dispute resolution procedure whereby the parties agree to submit their dispute to an independent third-party expert to provide a preliminary view on the merits of the parties’ respective positions. The evaluation is not binding on the parties unless the parties elect for it to be and is entirely without prejudice.

ENE can lead to the early settlement of disputes and assist in narrowing the issues. Norris J endorsed the use of ENE in Seals v Williams [2015] EWHC 1829 (Chancery) and, consequently, the court’s general case management powers were amended to include the use of ENE. Thus, CPR 3.1(2)(m) provides that the court may ‘take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an early neutral evaluation with the aim of helping the parties settle the case’.

Lomax v Lomax

The case concerned Inheritance Act proceedings which are governed by the CPR. The claimant applied for an ENE or FDR hearing which the defendant opposed. Could the judge order ENE or FDR without the consent of the defendant? It was noted that the various court guides – the Chancery, Commercial Court, and Technology and Construction guides – appeared to require the consent of the parties before an ENE could be ordered.  However, CPR 3.1(2)(m) did not refer to the consent of the parties and, as such, cut both ways. Similarly, Norris J in Seals did not indicate that he could not make an order for ENE in the absence of consent – he did not state that consent was a prerequisite either. But it was clear that a judge was permitted to express a view as to the outcome or guidance at any further hearing without the parties’ consent (see Fayus Inc v Flying Trade Group Plc [2012] EWPCC 43 and Frey v Labrouche [2012] EWCA Civ 88).

The various commentaries on CPR 3.1(2)(m) were also inconsistent on the issue of party consent. The 2015 White Book commentary stated that the court’s decision whether to conduct ENE was not dependent in any way on the consent of the parties. It went on to explain that, where the parties sought ENE, the court will usually accede to such a request unless it decided that ENE was not appropriate in the circumstances.

Parker J concluded ‘on the finest of fine balances’ that she could not order an ENE or FDR. Although the CPR contained powers to compel the parties to participate in a court process by filing documentation and to attend, that was not conclusive as to whether the CPR 3.1(2)(m) created a compulsory process. It was necessary to consider the rules and what they provide in totality. A close analysis of the language of CPR 1.4(1)(e), the rule dealing with the ADR aspect of the overriding objective, was, according to Parker J, directed at facilitation rather than compulsion. She held: ‘My overall conclusion is that the current rules are insufficiently precise in their formulation for me either to conclude, or be confident that the rule-maker intended, that the judge is permitted to give directions which lead to a non-consensual ENE.’ This conclusion did not, however, detract from her view that this was a case ‘which cries, indeed screams out, for a robust judge-led process to focus on the legal and factual issues…and perhaps even craft a proposed solution for the parties to consider’.

The answer to the question of compulsion raised by Lomax may lie in Parker J’s approach in considering the language of the CPR as a whole, which appears to indicate a facilitative rather than a compulsory approach to ADR.

The CPRC is considering the issue further. 

Masood Ahmed is an associate professor at the University of Leicester and a member of the Civil Procedure Rule Committee; Fatma Arslan, a PhD candidate at the University of Leicester, also contributed to this article