A new procedure has been introduced in the Employment Tribunals of England and Wales allowing judges in complex claims to require the parties to participate in an ADR process. The process is akin to judicial Early Neutral Evaluation (ENE), in which a judge not involved in the case gives the parties a non-binding opinion as their prospects in the claim, with a view to encouraging settlement.
Beyond its impact in employment disputes, this development is of wider interest in the context of the current hot topic of compulsory ADR in the civil justice system. It appears to add to the growing momentum toward relaxation of the fundamental English law prohibition on compelling ADR, which is (for the moment) still in place under Halsey v Milton Keynes NHS Trust [2004] EWCA 576.
“Dispute Resolution Appointments”
The President of the Employment Tribunals recently issued updated Presidential Guidance outlining the various forms of ADR that the Tribunals can encourage parties to use. These include the existing (voluntary) processes of (i) ACAS Conciliation (ii) Judicial Mediation and (iii) Judicial Assessment (a form of ENE). However, it also introduced a new process, the “Dispute Resolution Appointment” (DRA), which is effectively also a form of ENE but is mandatory where a judge considers it appropriate.
The process has been trialled in specific regions since 2020 but is now being incorporated into Employment Tribunal procedure nationally.
DRAs are:
- intended for complex / lengthy cases (particularly discrimination and whistleblowing claims, but potentially any claim requiring more than one week hearing time)
- evaluative: an employment judge (different to the trial judge) gives the parties an impartial and confidential evaluation of their respective prospects of success and risks, based on the pleadings and evidence available at the time. The opinion is non-binding but aimed at encouraging the parties to engage subsequently in settlement discussions (via a Judicial Mediation or otherwise)
- held after witness statements are exchanged
- conducted usually by video or telephone and lasting 2-3 hours
- non-consensual: in a case where a judge considers that a DRA should take place, the parties will be obliged to attend, at risk of costs sanctions. There is provision for parties to make submissions as to why a DRA should not proceed in a particular case, although the Guidance does not identify the criteria that may be relevant in that regard.
Wider significance
It appears from the Guidance that if a party fails to attend a DRA without good reason the sanction will be limited to potential costs orders for unreasonable conduct, rather than any more severe measures such as staying the proceedings or preventing the party from pursuing /defending the claim. If that is the case, some observers might suggest that the compulsory element of DRAs is only a minor technical step beyond the existing position under Halsey – where, although a court or tribunal can only ‘robustly encourage’ ADR rather than order parties to participate, it can similarly impose costs sanctions if a party unreasonably fails to act on that encouragement.
However, the formal classification of DRAs as mandatory (where a judge directs it) is significant. Within the Employment Tribunals, it clearly has the potential to increase the likelihood of parties engaging in the process – and the likelihood of sanctions actually being imposed if they do not. But it also has wider significance against the backdrop of strong indications from both the government and the civil judiciary over the last two years of an openness to relaxing the blanket restriction on mandating ADR, in order to implement their shared policy of fully embedding ADR into the civil justice system (as detailed here and here).
In particular, the DRA process adds to the areas within the civil system where direct compulsion of ADR has been introduced notwithstanding Halsey. Other key examples include:
- the Court of Appeal’s decision in Lomax v Lomax [2019] EWCA 1467 (discussed here), holding that the civil courts have power to order an ENE against the parties’ wishes. In doing so, it distinguished Halsey (on arguably strained grounds) but clearly acknowledged the existence of an issue as to the extent to which Halsey remains good law; and
- the mandatory mediation procedure the government is putting in place for all Small Claims in the County Court, with the possibility of extension to the rest of the County Court and beyond.
Interestingly, the recent Tribunal Guidance does not mention Lomax (despite DRAs being a form of ENE) or acknowledge the apparent tension with Halsey. It simply notes that the need for DRAs to be non-consensual is due to the fact that complex/lengthy claims are a substantial contributor to overall long waiting times in the Tribunals (partly because parties may be reluctant to use ADR where one party is unrepresented), and also that the lengthy Tribunal process required in such cases may not be proportionate for many of those claims.
Conclusion
The momentum toward compulsory ADR being expanded to at least some extent seems clear. It remains to be seen whether developments in this regard will be primarily driven through statutory/rule changes or through case law (such as the pending appeal in Churchill v Merthyr Tydfil County Borough Council, in which the Court of Appeal is expected to revisit Halsey to some extent. We will report on that appeal separately on this blog.) Most likely, it will be a combination of both, bearing in mind that this is a topic on which there may be legislative appetite to take the issue out of the courts’ hands if the case law was to develop in a way that was counter to government policy and its planned reforms to the court system.
In either case, the rule-makers and the courts will need to eventually delve below the superficial question of whether or not compulsory ADR is lawful and ‘a good thing’, and progressively scrutinise exactly where, when and in what form compulsion may be appropriate within the broad range of civil disputes.
Learnings from procedures such as the DRA process in the Employment Tribunals may provide useful information for that purpose.
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For more detail on the full Presidential Guidance, see this post on our Employment Notes blog by Peter Frost, Consultant in our London Employment team. Peter is one of the most experienced employment lawyers in the UK, whose views on key issues are sought both by clients and by the UK Government. In particular, he is recognised as one of the leading thought-leaders on the use of ADR in employment disputes, and is a former co-chair of the Arbitration and ADR working group of the Employment Lawyers’ Association.
For more analysis regarding the use of ADR in employment claims, see the following previous blog posts:
- ADR for employment lawyers: lessons from the Civil Justice Council?
- Is there a role for ADR in employment disputes?
For further information, please contact:
Jan O’Neill, Herbert Smith Freehills
jan.oneill@hsf.com
