You can lead a horse to water but you can’t make it drink. So too you can give Judges extensive powers to encourage early settlement of disputes, but, until two recent Court of Appeal cases, it did not look as though they would use them.
Even non-lawyers should be aware of the shake-up in the civil litigation system signalled by the “Woolf Reforms” in April 2000. The reforms in question were the adoption of new Civil Procedure Rules (CPR), which had been drawn up following a report by Lord Woolf on how to cut the time and expense involved in litigation.
The “overriding objective” and stated aim of the CPR is to enable the Court to deal with cases justly. Justice is achieved by ensuring that the parties are on an equal footing, by saving expense and by dealing with cases promptly in a manner which is proportionate to the money involved, the importance of a case, the complexity of the issues and the financial position of the parties.
In support of the overriding objective, Judges are given substantial powers to manage cases actively in order to secure their just and expeditious disposal. One specific CPR rule provides:-
“Active case management includes encouraging the parties to use an alternative dispute resolution procedure if the Court considers that appropriate and facilitating the use of such procedure”.
“Alternative dispute resolution” (ADR) is popularly thought of as a submission to mediation. In mediation, a facilitator (the mediator) seeks to help the parties towards a mutually acceptable settlement. The process is consensual and the mediator has no power to bind the parties (unlike a judge in litigation or an arbitrator in arbitration).
My first brush with ADR in the “post-Woolf” era was in a large systems integration dispute where the Court made an order that the parties should mediate. The other side were dragging their feet and so I made an application to the Court to order that a mediation take place within a short timeframe. I was turned down flat. The Judge said that he had no power to compel a party to participate in a mediation. Mediation was a consensual process and all he could do was to encourage the other side to mediate. Incidentally, the litigation eventually settled after a one day mediation some three months later.
I was very disappointed because it struck me that, if the CPR were really to make a difference, the Judges would have to go out on a limb in managing cases, essentially coercing parties to try to settle.
It was therefore with considerable pleasure that I recently read two Court of Appeal decisions. In the first case, Cowl v Plymouth City Council (2001), Lord Woolf himself, as Lord Chief Justice, made trenchant comments about the failure of the parties in the case, which involved the proposed closure of a nursing home in Plymouth, to use ADR.
In Cowl v Plymouth Lord Woolf said “The importance of this Appeal is that it illustrates that insufficient attention is paid to the paramount importance of avoiding litigation whenever this is possible. Particularly in the case of these disputes both sides must by now be acutely conscious of the contribution alternative dispute resolution can make to resolving disputes and the manner which both meets the needs of the parties and the public and saves time, expense and stress”.
He continued “The courts should make appropriate use of their ample powers under the CPR to ensure that the parties try to resolve the dispute with the minimum involvement of the courts….to achieve this objective the court may have to hold on its own initiative a hearing at which the parties can explain what steps they had taken to resolve the dispute without the involvement of the courts. In particular the parties should be asked why some form ADR has not been used or adapted to resolve or reduce the issues in dispute.”
He considered the increased awareness of ADR and concluded “Today sufficient should be known about ADR to make the failure to adopt it, in particular where public money is involved, indefensible”.
The parties in the case could be in no doubt how the Judge was thinking. The second case though went further in that there were financial consequences. In Dunnett v Railtrack plc (2002), Railtrack failed to recover its costs from Mrs Dunnett despite winning because it had refused to take up a suggestion to engage in ADR. This is contrary to the normal rule in English litigation that the winning party recovers a proportion of its costs from the losing party. Such a system does not operate in the United States and this ability to sue without risking having to pay not one but two sets of costs, to my mind, contributes to the inordinate amount of litigation that takes place in the United States.
In the case, Mrs Dunnett failed to succeed against Railtrack in her claim arising from the death of three of her horses on a railway line. The case itself was of no great consequence, but the judgment on costs was. Lord Justice Brooke, giving the judgment of the Court, knew it.
“It is to be hoped that any publicity given to this part of the judgment of the court will draw the attention of lawyers to their duties to further the overriding objective ….and to the possibility that, if they turn down out of hand the chance of alternative dispute resolution when suggested by the court, as happened on this occasion, they may have to face uncomfortable costs consequence”.
I suspect Railtrack lawyers have larger fish to fry, but Railtrack management may have some words to say to them (or their insurers) in light of the above!
A version of this article was first published in the June 2002 issue of MIS UK.