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26 September 2019
The Court of Appeal recently overturned Justice Parker's High Court judgment in Lomax v Lomax (for further details please see "Judge rules that parties cannot be forced to engage in ADR procedures"), confirming that the court can order early neutral evaluation even without the parties' consent.
The decision – which was made in the context of a claim by a widow under the Inheritance (Provision for Family and Dependants) Act 1975 and which was strongly resisted by her stepson – will be of particular interest to private client practitioners because of the court's endorsement of early neutral evaluation in the context of family disputes.
In short, Parker considered that the case was unlikely to benefit from mediation but expressed that it "screams out, for a robust judge-led process to focus on the legal and factual issues presented by this case; and perhaps even craft a proposed solution for the parties to consider".
Notwithstanding the above, Parker declined to order an early neutral evaluation or financial dispute resolution hearing (two similar forms of alternative dispute resolution (ADR) (for further details please see "Judge rules that parties cannot be forced to engage in ADR procedures")) on the basis that the court had no power to do so when, as in this case, one party refused to consent to such a hearing.
Despite the wider scope of Parker's judgment, which considered the court's powers in relation to ADR more generally, the Court of Appeal was prepared to limit the scope of the appeal hearing to the construction of Civil Procedure Rule 3.1(2)(m), which provides that the court may, in addition to its other powers:
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 Court of Appeal was unreceptive to the respondent's attempts to widen the scope of the appeal by referring to contradictory language in various court guides – including the chancery, commercial and technology and construction court guides – all of which suggest that early neutral evaluation is dependent on consent. The Court of Appeal's response was simply that the rules could not be disapplied by the court guides. It also gave short shrift to the respondent's suggestion that early neutral evaluation should be given similar treatment to mediation, which is widely recognised as a voluntary process, as endorsed in Halsey v Milton Keynes General NHS Trust.(1) The court appeared to regard early neutral evaluation and mediation as significantly different procedures, on the basis that the former is part of the court process and does not obstruct a party's access to the court in any material way. Lord Justice Moylan (who delivered the leading judgment) went on to extol the values of early neutral evaluation suggesting that, in his experience (which he suspected would be shared by "every other judge who has been involved in financial remedy cases"), it often achieves a great deal, even if the parties are resistant or actively hostile to ADR. In support of this, he pointed to the impact of financial dispute resolution hearings in Family Division financial remedy cases, which both he and Parker recognised as "outstandingly successful".
While it seems unlikely that orders for early neutral evaluation without consent will become commonplace in private client cases (given that it is not appropriate in all cases and that the court is unlikely to allocate resources to the process unless it is confident that it will be suitable), the judgment should prompt private client practitioners to give fresh consideration to this form of ADR. Of particular importance is Moylan's ringing endorsement of early neutral evaluation and the proven record of these types of hearing in the Family Court and Family Division.
For more information on this topic please contact Ashleigh Carr, Roberta Harvey or Emily Exton at Forsters LLP by telephone (+44 20 7863 8333) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Forsters LLP website can be accessed at www.forsters.co.uk.
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