Compulsory Alternative Dispute Resolution

February 15, 2018

By Bill Braithwaite QC

A government advisory body has recommended that compulsory alternative dispute resolution (ADR) should be explored. The Association of Personal Injury Lawyers has responded that, in their opinion, forcing personal injury claimants into non-court options would lead to delays and unnecessary costs. The Association’s president said that “it is….. not appropriate for ADR to be mandatory at any stage of a personal injury claim”.

I disagree fundamentally. Several years ago I proposed a scheme of voluntary ADR for high value personal injury and clinical negligence claims. My suggestion was that sensible claimant and defendant lawyers and insurers could put their heads together and agree on a method of managing a claim which excluded the courts, unless the ADR failed, in which case the parties could then revert to the court system – unless they had agreed, as they could, to avoid it completely.

There has been little take-up on that suggestion. I offer it in most of my cases, and sometimes we do agree on an alternative way of managing a problem. For example, we can appoint a senior personal injury lawyer to evaluate or decide an issue – I have done this with contributory negligence and other elements of claims.

A common example for me, which most people won’t recognise as ADR, is having the defence team sit in on my consultation with the claimant, and sometimes with one or more of our experts. Although it doesn’t have a specific label in the ADR toolkit, it is a way of resolving potential issues without going to court. A recent example gave the defence team the opportunity to hear from the spouse at first hand just how difficult life really was for the whole family, and how it could be made better. That involved expense which might be more than necessary, but they agreed to release the money.

That was consensual, and the argument is that, if you compel a meeting like that, neither side will co-operate. I agree that that is a theoretical possibility, but the sanctions for failure to comply are persuasive. If both sides are equally unreasonable, which is rare, I think it’s fair to say that no form of ADR will work. In the work I do, though, at least 90% settles, suggesting that, at the later stage of a major claim, both sides are reasonable. Also, good mediators have encouraging results, and some of the parties in mediations are undoubtedly unreasonable at the outset; good management can bring them round to see sense.

Of course, the courts already do compel litigants to participate in ADR. In significant personal injury cases there is usually an order that the parties explore ADR, and if a party does not participate genuinely there is a real risk that they will lose out on costs even if they win the case in the end. Also, the rules were changed moderately recently to give the court the power to order consideration of early neutral evaluation.

That compulsion system could be expanded slightly, without any radical change, by penalising parties who waste court time by not exploring ADR.

Of course, the advantage of my system is that you avoid the court completely, which is much to be desired. It’s no accident that almost all big personal injury claims settle – the weakest link is either the judge, or the uncertainty of not knowing who the judge will be.

My impression is that the Association perhaps does not know much about the flexibility of ADR (lots of people think that ADR means mediation, but it is so much wider), or possibly that it was concentrating on lower value claims. The President said “It is very troubling to think that people might be forced to engage with a defendant’s resolution scheme without taking independent legal advice first”, which seems to me to be inventing a problem which either does not, or should not, exist. I emphasise that I’m talking about individual, high value claims. I recognise that different practical considerations may apply in low, or lower, value ones.

I would say the same about his apparent warning that “defendants who were not advised by lawyers could, perhaps unknowingly, agree to a settlement which does not meet their needs, as is the case with the proposed rapid resolution and redress scheme for birth injuries which will pay only 90 per cent of the average settlement”. I assume he meant claimants, and I can see a potential problem with claimants being taken advantage of, but again that might be meeting a problem which does not exist.

The whole object of ADR is that it allows parties to explore existing or novel ways of resolving disputes, not just settling cases when all the costs have been incurred. I feel that there is a real perception problem here; when I mention ADR, many people respond “oh, you mean mediation”, but of course I don’t, I mean the entire range of possibilities. In personal injury litigation, a settlement meeting is what everyone thinks of, and that is a form of ADR, but it usually comes at the end, when the case is full or partly prepared for trial, and most of the costs have been incurred. The advantage of ADR, imaginatively used, is that it can resolve all issues, from the very earliest stage. I have used it in liability, selection of rehabilitation unit, suitable accommodation, choice of car, selection of experts, choice of case manager, and many other common issues.

Again, the argument is that compulsion will spoil the process, but a judge told me recently how he had sent the parties out to explore a method of resolution, and they had reached agreement – so compulsion can work.

Taking interim payments as an example, because they are often contested, we recently got £1.9 million against the NHS. There was no attempt by them to reach agreement in advance, or to explore whether there was a reasonable way of resolving the issue. I can’t help thinking that early evaluation or determination might have helped to reduce cost. If they had been ordered, either specifically or generally, to participate in ADR, they might have engaged in a discussion which would have told them that they were about to lose and so should reduce the impact as far as possible.

Times are changing, and personal injury litigation is changing fast. If we don’t find better ways of doing what we do, we might find that yet more inroads are made into lawyers’ involvement in injury claims.

Bill is head of the clinical negligence and personal injury departments at Exchange Chambers. He is recommended as a leading silk in both Chambers and Partners 2018 and Legal 500 2017.