The Importance of Considering ADR

ADR is not mandatory in the†UK, save where agreed by the†parties in contract (although†there have been orders made†by individual judges in†exceptional cases). That said,†the use of ADR is now firmly†enshrined in the English Civil†Procedure Rules. The court has†a positive obligation to†encourage parties to use an†ADR procedure if the court†considers it appropriate and to†facilitate the use of such a†procedure. Failure to consider†ADR can result in adverse costs†consequences. Recent cases†have highlighted the importance†the court is attaching to ADR.

In April 2002, the Court of Appeal's†decision in Dunnett v Railtrack Plc†[2002] 2 All ER 850 highlighted the†necessity for lawyers and parties to†consider Alternative Dispute Resolution†(ADR), failing which a party may be†penalised in costs. This decision was†not wholly unexpected. In the earlier†case of Cowl v Plymouth City Council†[2002] 1 WLR 803, Lord Woolf, in his†judgment in the Court of Appeal, stated†in the context of a judicial review that:†"both sides must by now be acutely†conscious of the contribution alternative†dispute resolution can make to resolving†disputes in a manner which both meets†the needs of the parties and the public†and saves time, expense and stress."

In Dunnett, the claimant lost at first†instance and applied for permission to†appeal. Before granting permission to†appeal, Lord Justice Schiemann advised†her to explore the possibility of ADR.†The claimant referred this suggestion to†the defendant who was not willing to†consider it. The claimant lost her appeal†and the defendant asked the court for†an order that the claimant pay its costs of†the appeal. The Court of Appeal refused this†request and made no order as to costs†saying that the defendant should not have†dismissed Schiemann LJ's suggestion of†ADR out of hand. Lord Justice Brooke (with†whom Lord Justice Robert Walker and Lord†Justice Sedley agreed) specifically stated†that he hoped any publicity given to this part†of his judgment would draw the attention of†lawyers to their duties to further the†overriding objective, which include†encouraging parties to use ADR, and, if they†turn down "out of hand" the chance of ADR†when suggested by the court, they may†have to face "uncomfortable costs†consequences".

In Hurst v Leeming [2002] EWHC 1051 and†EWCA Civ 1173, Mr Hurst brought a claim†against his counsel, Mr Leeming QC,†alleging negligence in respect of a previous†unsuccessful piece of litigation in which he†was...