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Benefits of ADR (and risks of refusing)

Most litigators will have seen the standard directions order requiring parties to consider alternative dispute resolution as a means of resolving their case. Most will also appreciate the potential cost consequences of unreasonably refusing to engage in ADR. Despite this, it is not uncommon for one party to refuse to engage in any form of ADR due to the perception that it has a strong case.

Although the strength of a case can be a relevant factor in considering whether the refusal to engage in ADR is an unreasonable one, two recent cases have illustrated how high that bar is. In both cases (DSN v Blackpool Football Club Ltd [2020] EWHC 670 (QB) and BXB v Watch Tower and Bible Tract Society of Pennsylvannia & Ors [2020] EWHC 656 (Admin)) each Defendant refused to engage in ADR due to its perceived strength in its case. Ultimately unsuccessful on liability the Defendants were ordered to pay costs on the indemnity basis because of that refusal.

In DSN, Griffiths J noted “No defence, however strong, by itself justifies a failure to engage in any kind of alternative dispute resolution. Experience has shown that disputes may often be resolved in a way satisfactory to all parties, including parties who find themselves able to resolve claims against them which they consider to be well founded.”

Even in cases where a party is justified in its belief as to the strength of its case ADR may be beneficial. Chamberlain J observed in BXB that “This did not, however, necessarily mean that there was nothing to discuss. One important purpose of a joint settlement meeting is to convey a defendant’s view about the strength of its case. In any event, the possibility of agreeing quantum subject to liability provides a good reason to engage in discussions even in a case where the defendant is confident about its case on liability.

Due to the coronavirus crisis the court system is under an unprecedented level of strain. Many trials have been adjourned and a backlog already exists. Whilst simple cases are likely to be capable of being tried remotely, even moderately complex ones could face delays of an unknown duration. ADR, and in particular remote ADR or ODR (‘online dispute resolution’), offers a swift, safe and economic route to resolving a dispute promptly. Whether the claim is in its infancy or whether the case is ready for trial, ADR can provide a solution. Importantly, with the Courts stretched as they are, only a very brave (or foolish) litigant would refuse to engage ADR and not expect adverse cost consequences. During the crisis it is likely that the Courts will set the bar even higher than in DSN and BXB.

ADR and ODR can be equally utilised by litigants-in-person as represented parties. Legal representatives that fail to recommend ADR to their clients are likely to be in breach of their professional duties.

Members of PSQB are able to act as a neutral party in ADR or representative for the parties. We have a system in place for the conduct of ODR. Further details can be found on our pages for Mediation and Online Dispute Resolution. Appropriately qualified members of Chambers can be instructed on a Public Access basis.

Contact Richard’s clerks

Francine Kirk on 0113 202 8605