ADR STRATEGIES AND THE UK COURTS’ APPROACH IN 2021
Alternative dispute resolution (ADR) encompasses a range of dispute resolution options which are available over and above litigation or court proceedings. Promoting – or even in some circumstances, requiring – the use of ADR is one of the key ways in which the courts are trying to reduce the costs of litigation in 2021. Today, more than ever before, anyone involved in litigation or intending to litigate, should explore all available options for an out-of-court settlement in the early stages of a dispute, and should respond promptly and constructively to any settlement approaches made by the court or another party.
If the court mentions that a case is suitable for ADR, or if ADR is suggested by an opponent, that party should be very cautious about rejecting it, or even failing to respond in a meaningful way. This is because the Practice Direction on Pre-Action Conduct and Protocols (which forms part of the Civil Procedure Rules (CPR) which govern civil litigation in England and Wales) and a growing body of case law now specifically provide that litigation should be a last resort and that costs penalties will be applied to those who unreasonably refuse to contemplate or engage in it.
In PGF II SA v. OMS Company in 2013, the Court of Appeal stated that “Silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds.”
Apr-Jun 2021 issue
Walker Morris LLP