The duty of parties in litigation to attempt alternative dispute resolution

Alternative dispute resolution (ADR) methods have gained significant traction as an alternative to the courtroom. ADR refers to various processes, such as mediation, arbitration, or negotiation, that aim to resolve disputes without the need for formal litigation.

The courts want to encourage parties to resolve disputes amicably, thereby reducing the burden on the judicial system and ensuring that cases are heard more efficiently. This is reflected in the overriding objective in the CPR, which aims to enable the court to deal with cases justly, including encouraging the use of ADR.

 

More specifically, CPR 1.4(2)(e) requires that the parties in a dispute consider the possibility of ADR at the earliest stage of the proceedings. The court also has the authority to assess the parties’ conduct in this regard when making decisions about costs. If a party has unreasonably refused to attempt ADR, the court may take this into account when awarding costs.

Consequences of Refusing ADR: Sanctions for unreasonable refusal

When one party refuses to engage in ADR, there can be significant consequences. If the refusal is deemed unreasonable, the court has the power to impose sanctions, particularly in relation to costs.

Under CPR 44.3, a party who unreasonably refuses to engage in ADR may be penalised with an adverse costs order, even if they ultimately win the case. This means that the party may have to pay a larger share of the other party’s legal costs, which can be financially burdensome.

 

In practice, the courts may also order the parties to attend a mediation session if they have refused to engage in ADR voluntarily. A refusal to mediate may therefore be detrimental not only in terms of costs but also in terms of the relationship between the parties.

 

DKH Retail Ltd v City Football Group Ltd

A notable case where the court intervened to compel parties to attempt ADR is DKH Retail Ltd v City Football Group Ltd (2020). In this case, the defendant, City Football Group, was ordered by the court to mediate with the claimant, DKH Retail, after it had refused to engage in ADR. The claimant sought a mediation order, arguing that a resolution through ADR could be achieved without further court intervention.

 

The court sided with the claimant and ruled that mediation was a viable method to resolve the dispute. This case highlights how seriously the courts take the duty to attempt ADR, and how they are willing to order parties to engage in these methods when one party refuses to do so voluntarily. The case also underscores the point that, even in complex or high-profile disputes, ADR should be considered as a primary method of dispute resolution.

 

How Muldoon Britton can help

At Muldoon Britton, we understand the importance of exploring all options to resolve disputes efficiently and effectively. Our expert team can assist you in determining whether alternative dispute resolution is appropriate for your case, and we can guide you through the process if you choose to pursue mediation, arbitration, or any other form of ADR. We can also deal with settlement negotiations on your behalf, with an aim to conclude a dispute in a commercially sensible manner.

 

Whether you are currently in litigation or looking for alternatives to avoid a lengthy legal battle, our experienced solicitors are here to provide you with strategic advice and representation. Contact us today to learn more about how we can help you explore the best course of action for your dispute and potentially avoid the time and expense of a court trial.

 

Let Muldoon Britton be your trusted partner in resolving disputes with efficiency and professionalism.

 

Contact us now for expert legal guidance.