A recent Court of Appeal case illustrates the importance of considering ADR and in particular when should the court impose a costs sanction against a successful litigant on the grounds that he has refused to take part in an alternative dispute resolution
A Hospital Trust had on a number of occasions refused a number of invitations by the Claimant to mediate. Guidance was given by the Court of Appeal and encouraged parties to adopt ADR. CPR 1.4(1) obliges the court to further the overriding objective of enabling the court to deal with cases justly by actively managing cases, and Rule 1.4(2)(e) defines “active case management” as including “encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure”. Rule 26.4(1) provides that “a party may, when filing the completed allocation questionnaire, make a written request for the proceedings to be stayed while the parties try to settle the case by alternative dispute resolution or other means.
The term “alternative dispute resolution” is defined in the Glossary to the CPR as a “collective description of methods of resolving disputes otherwise than through the normal trial process.” In practice, however, references to ADR are usually understood as being references to some form of mediation by a third party. The general rule is that the unsuccessful party is ordered to pay the costs of the successful party (CPR 44.3(2)(a)). The cases in which the question of displacing this rule have been discussed have usually been concerned with the refusal of mediation by the successful party.
The virtues of mediation in suitable cases are also recognised in the Chancery Guide (paras 17.1 and 17.3), the Queen’s Bench Guide (para 6.6), the Admiralty and Commercial Court Guide (para D8.8) and the Technology and Construction Court Guide (para 6.4). Judges in the Commercial Court routinely make “ADR orders” in the form set out in Appendix 7 to the Admiralty and Commercial Court Guide (see further para 30 below).
Strong support for the use of ADR in general , and mediation in particular, has been given by the courts in cases such as R (Cowl) v Plymouth City Council  EWCA Civ 1935,  1 WLR 803, Dunnett v Railtrack plc  EWCA Civ 303,  1 WLR 2434 and Hurst v Leeming  EWHC 1051 (Ch),  1 Lloyds Rep 379.
The Court 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!
The hallmark of ADR procedures, and perhaps the key to their effectiveness in individual cases, is that they are processes voluntarily entered into by the parties in dispute with outcomes, if the parties so wish, which are non-binding. Consequently the court cannot direct that such methods be used but may merely encourage and facilitate.
Parties sometimes need to be encouraged by the court to embark on an ADR. All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR. The Court wished to reiterate that the court’s role is to encourage, not to compel.