Alternative Dispute Resolution - Lomax v Lomax [2019] EWCA Civ 1467
A surviving spouse issued an application for reasonable financial provision from her deceased husband’s estate under the Inheritance (Provision for Family and Dependants) Act 1975.
The parties could not agree on the appropriate alternative dispute resolution method for the case. The Claimant considered early neutral evaluation (“ENE”) appropriate, whilst the Defendant preferred mediation. It was common ground that the Court could not order the parties to engage in mediation. There was, however, a dispute as to the Court’s jurisdiction to order ENE.
The Claimant’s position was that the Court had jurisdiction to order ENE without the parties’ consent pursuant to the version of CPR rule 3.1 in force since 1st October 2015 (emphasis added):
“(2) Except where these Rules provide otherwise, the court may–
(m) 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.”
The Claimant also referred to the commentary on CPR rule 3.1(2)(m) in the White Book 2019, paragraph 3.1.13, which, until 7th June 2019 (when reference to consent being required was removed in the Second Cumulative Supplement) stated that:
“The Court’s decision whether or not to conduct ENE is not dependent in any way on the consent of the parties. It is simply part of the court’s inherent jurisdiction to control the proceedings.”
The Defendant’s position was that the Court has no power to order the parties to submit their dispute to alternative dispute resolution such as ENE. In this regard reliance was placed on the principles set out in Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002, in which Dyson LJ (giving the judgment of the Court of Appeal) said, inter alia, as follows:
“9. We heard argument on the question whether the court has power to order parties to submit their disputes to mediation against their will. It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest terms. It is another to order them to do so. It seems to us that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court.
- If the court were to compel parties to enter into a mediation to which they objected, that would achieve nothing except to add to the costs to be borne by the parties, possibly postpone the time when the court determines the dispute and damage the perceived effectiveness of the ADR process. If a judge takes the view that the case is suitable for ADR , then he or she is not, of course, obliged to take at face value the expressed opposition of the parties. In such a case, the judge should explore the reasons for any resistance to ADR. But if the parties (or at least one of them) remainintransigently opposed to ADR , then it would be wrong for the court to compel them to embrace it.”
The Defendant further submitted that the wording of CPR rule 3.1(2)(m) indicated the need for the parties’ consent. A provision providing that the Court can take the step of “…hearing an Early Neutral Evaluation with the aim of helping the parties settle the case” is in stark contrast to other provisions of CPR rule 3.1(2) which, for example, empower the Court to “require a party or a party’s legal representative to attend court” or “direct a separate trial of any issue” (CPR rules 3.1(2)(c) and (i)).
Furthermore, the Defendant’s interpretation of CPR rule 3.1(2)(m) was, he submitted, in line with the decision which had led to the relevant addition to that rule, namely Seals v Williams [2015] EWHC 1829. Although Seals v Williams was a very different case, as the parties had all asked the Court to undertake ENE, the Defendant submitted that Norris J’s judgment suggested a requirement for consent in line with the principles set out in Halsey v Milton Keynes:
“7. The expression of provisional views in the course of a hearing is not dependent in any way on the consent of the parties. It is simply part of the judge's inherent jurisdiction to control proceedings before him or her. The expression of views about the ultimate outcome of a case at a hearing specially convened for that purpose is slightly different. In my judgment, if the parties ask a judge to express provisional views on particular hypotheses or upon the judge's overall impression of the case so far, then it is part of the judicial function for the judge to accede to doing so – though plainly the judge is not bound to do so whenever the parties request.”
Finally, the Defendant emphasised that his interpretation of CPR rule 3.1(2)(m) was in line with the view taken by the authors of the Court Guides then in force: Chancery Guide, paragraphs 18.7 and 18.8; Commercial Court Guide, paragraph G2.3; and Technology and Construction Court Guide, paragraph 7.5.1.
Parker J held “on the finest of fine balances” that the Court could not order ENE without the parties’ consent. However, Parker J’s decision was reversed by the Court of Appeal (McCombe, Moylan and Rose LJJ).
Moylan LJ, with whom McCombe and Rose LJJ agreed, held that Halsey v Milton Keynes was dealing with a different situation since ENE, unlike mediation, is itself a part of the Court process:
“25. I do not consider that Halsey v Milton Keynes assists with the proper interpretation of subparagraph (m) because it was dealing with a very different situation. It was concerned with whether a court can oblige parties "to submit their disputes to mediation". It does not, therefore, in my view assist with the interpretation of subparagraph (m), which is dealing with an ENE hearing as part of the court process.
- In any event, ENE does not prevent the parties from having their disputes determined by the court if they do not settle their case at or following an ENE hearing. It does not, in any material way, obstruct a party's access to the court. Insofar as it includes an additional step in the process, this is not in any sense an "unacceptable constraint", to use the expression fromHalsey . In my view, it is a step in the process which can assist with the fair and sensible resolution of cases.”
As to the correct interpretation of CPR rule 3.1(2)(m), Moylan LJ considered the absence of an express requirement for consent to be a powerful indication that consent was not needed and held that the implication of such a requirement would be contrary to the overriding objective:
“30. …I also do not consider that [the Defendant’s] analysis of the rules supports the conclusion that consent is to be implied in subparagraph (m). If the intention had been to require the parties to consent, it would have been very easy to make this clear by expressly providing for this. In my view, the absence of any such express requirement is a powerful indication that consent is not required. As I have already indicated, in my view an ENE hearing is not an obstruction to or constraint on a party's access to the court.”
“32. …I see no reason to imply into subparagraph (m) any limitation on the court's power to order an ENE hearing to the effect that the agreement or consent of the parties is required. Indeed, in my view such an interpretation would be inconsistent with elements of the overriding objective, in particular the saving of expense and allotting to cases an appropriate share of the court's resources, and would, therefore, be contrary to rule 1.2(b)…”
In the writer’s view, the Court of Appeal’s decision is surprising in principle, if not in practice. The Court of Appeal emphasised the success of financial dispute resolution hearings in ancillary relief proceedings (see paragraphs [13], [14], [29] and [31]), but this is not a principled basis for departing from the requirement that alternative dispute resolution be consensual – the success rate of mediation does not alter the fundamental principles set out in Halsey v Milton Keynes. A requirement to engage in ENE, whether or not it takes place on the HMCTS estate is, in the writer’s opinion, no less of an obstruction to a litigant’s access to the courts than a requirement to engage in any other form of alternative dispute resolution.
However, following the Court of Appeal’s judgment, practitioners will need to be aware of the possibility and consequences of the Court ordering ENE in the face of objection. Practitioners should also be aware of the Court of Appeal’s indication that there may be a move away from the principle that alternative dispute resolution must be consensual generally:
“27. …I do not need to enter into the question…as to what Halsey determined and the extent to which it remains good law. I would only comment that the court's engagement with mediation has progressed significantly since Halsey was decided…”
(Author: Mathew Roper)
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