Alternative Dispute Resolution (ADR) is a fundamental aspect of the Civil Procedure Rules (CPR), which govern the process of civil litigation.
What Is Alternative Dispute Resolution?
ADR refers to various methods of resolving disputes without the need for a full court trial. These methods include:
- Mediation
- Arbitration
- Part 36 offers
- Early neutral evaluation
- Without prejudice offers
- Ombudsman schemes
The Overriding Objective – CPR 1.1
CPR 1.1 outlines the overriding objective: cases should be dealt with fairly and at a proportionate cost—especially in relation to the sum in dispute.
Using ADR early in proceedings can save time, cost, and reduce the burden of litigation. Even when a case reaches trial, there are no guaranteed outcomes. Litigation involves stages such as disclosure, witness statements, cost budgeting, expert instruction, and trial preparation. These processes require ongoing payments and, even with a costs award, not all expenses are recoverable.
Costs Consequences of Refusing ADR
While the general rule is that the successful party recovers their costs, the court can depart from this if a party has unreasonably refused to engage in ADR. Even a winning party may face adverse costs consequences for such a refusal.
Mediation, a common ADR method, involves a neutral third party facilitating confidential negotiations between the parties. It has a high success rate and often results in settlement without the need for a trial.
The case of Halsey v Milton Keynes General NHS Trust (2004) established that costs consequences can apply when a party unreasonably refuses to mediate, particularly if the court believes the matter could have been reasonably resolved.
The Court’s Approach to ADR
Courts strongly encourage ADR and disapprove of parties who insist on proceeding to trial unnecessarily. Refusal to engage in ADR can lead to:
- Adverse costs orders—even if the refusing party wins
- Costs being awarded on an indemnity basis
- Orders requiring the refusing party to explain their refusal in a witness statement
Courts often issue a “stay” of proceedings to allow time for ADR, especially when it might resolve the matter without further strain on judicial resources.
Why ADR Matters More Than Ever
Court delays and trial adjournments are common due to high demand and limited capacity. ADR provides a route to quicker resolution and reduces pressure on the courts.
Amendment No.3 to the Civil Procedure Rules, coming into force on 1 October 2024, will strengthen the emphasis on ADR to encourage earlier settlements and alleviate pressure on the judicial system.
For further advice and assistance, please contact our Litigation and Dispute Resolution team on 01604 344562 / 01908 916096 or email [email protected].
Written by Nieve Frances Jones
Solicitor, Dispute Resolution at Franklins Solicitors LLP
Specialises in property evictions, debt recovery, civil and contract disputes, TOLATA claims, injunctions, and contentious probate including inheritance and trust disputes.
Nieve Frances Jones is a Solicitor at Franklins Solicitors LLP, having recently qualified after completing her Law degree at the University of Northampton and her LLM and Legal Practice Course at BPP University.
She specialises in civil and commercial litigation, covering areas such as property evictions, debt recovery, boundary and neighbour disputes, contract claims, defamation, and contentious probate.
Nieve is passionate about guiding clients through the litigation process and works closely with her team to ensure clients receive clear, accurate advice from the outset.
Outside of work, Nieve enjoys hiking, Brazilian Jiu-Jitsu, Muay Thai, and spending time with family and friends.
