Working party on ADR
Second Report of Commercial Court Committee
Index
1. Introduction
The first Report of the Working Party dated 12 June 1996 made recommendations as to the making of ADR orders in Commercial Court proceedings and as to other related matters. The object of these recommendations was to encourage the settlement of commercial litigation with the minimum cost to the parties and also to reduce the incidence of commercial litigation and so help limit the requirement for judicial resources. The Report included a draft practice direction which was intended to give effect to the recommendations. This practice direction was circulated to the Commercial Court Committee, approved by the Commercial Judges and formally promulgated by Mr Justice Waller on 7 June 1996. A copy is attached.
In view of the substantial changes of procedure recommended and the untried nature of its proposals, the Working Party recommended that the working of the ADR jurisdiction should be monitored and reviewed after two years. The Working Party has therefore been reconvened in order to review the effect of the new jurisdiction and to consider whether it ought to be continued and, if so, whether any changes ought to be made in the light of the experience of the last two years.
At the time of consideration of the contents of this report the final procedural proposals for the Commercial Court arising out of the Woolf recommendations were not to hand. This report is therefore prepared against the background of existing procedure. However, it is believed that its recommendations are likely to be compatible with any changes in Commercial Court procedures so far put forward by the Lord Chancellor's Department.
2. The Nature of Orders made under the Practice Direction
Fundamental to the recommendations of the first Report was the principle that the ADR jurisdiction should not impose on the parties a mandatory regime. If both the parties formed the view that it was inappropriate to submit their disputes to ADR or, having done so, to proceed to a settlement, they should be entitled to continue with their Commercial Court action in the ordinary way. To give effect to this principle but also to encourage the parties and their advisers to concentrate their minds on the real benefits of ADR, the form of the ADR orders made has been along the following lines: (see Guide to Commercial Court Practice, 4th Edn, pages 71-72).
In certain special cases the judges have made ADR orders pending delivery of a reserved judgment on an interlocutory application, allowing the parties, having fully argued the issues, to attempt to resolve the whole litigation by ADR within perhaps 28 days, after which judgment would be given on the interlocutory application.
Consistently with the persuasive rather than the mandatory philosophy of the Practice Direction, orders ancillary to the making of conventional ADR orders have included a requirement that within a period of a few days the parties should exchange lists of three neutrals each who are available to provide ADR mediation within a given period of time and should select one such person from such lists, failing agreement on such neutral, the matter to be restored to enable the court to facilitate agreement on a neutral.
The Court has not been deterred from making ADR orders in cases where one, or even both, of the parties have objected, provided that the nature of the issues or the relationship between the parties lend themselves to ADR procedures. Experience suggests that, even where the parties are at first ill-disposed to or highly sceptical as to mediation, the intervention of a neutral may so strongly influence them that initial hostility may change to reluctant enthusiasm. As the experience of the judges of the results of ADR orders increases, they are able to derive a more accurate "feel" for cases particularly likely to respond to ADR orders.
3. The Effect of ADR Orders on the Settlement of Commercial Litigation
Between June 1996 and July 1998 a total of at least 67 ADR orders were made. "At least" has to be inserted because, it is believed that a relatively small number of orders may have been made without having been notified to the Commercial Court Listing Office.
The total number of letters received by the Listing Office in consequence of those orders indicating either that ADR had not been proceeded with or that, having been attempted, it had failed to produce a settlement, amounted by the date of this Report to 7. One of these cases has subsequently settled, but six have either gone to trial or are awaiting trial.
The nature of the monitoring system introduced by the Court does not enable it to conduct an analysis of the response of the parties to ADR orders in those cases where an ultimate settlement was achieved. It is not therefore possible to say in how many of these cases ADR procedures were used and in how many of them direct bilateral negotiation achieved settlement. This Working Party does not believe that to be a matter of great importance. If the parties respond to an ADR order by achieving within the time designated by the order a settlement by direct negotiation, they will have achieved by a cheaper and less complicated mechanism the objective which such an order was intended to help them reach.
The achievement of settlement by direct negotiation, as well as by ADR procedures, is no doubt a consequence of the matters taken into account by the judges in deciding which cases are appropriate for ADR orders. A major consideration in that regard is the claim/costs ratio. Thus, if, for example, the claim is for, perhaps US$ 500,000, but the documentation is considerable, there are anticipated to be several factual witnesses whose evidence will not be short as well as expert witnesses on complex technical areas and the length of trial estimated as 5-7 days, it can at once be seen that the costs ratio will be so high that the sooner the litigation is settled the better.
The letters received by the court indicating failure to settle in response to ADR orders all describe decisions by one or both of the parties that ADR was inappropriate or unlikely to be productive of settlement. In none of those cases was a mediator appointed. A number of other letters indicate that, although the parties decided against ADR, they achieved settlement by means of direct negotiations.
The up-take of early neutral evaluation provided by the Commercial Judges has been low -
in only 4 cases. This can probably best be explained by lack of familiarity of the parties or their advisers with that facility and by the fact that the cases in which ADR orders have been made have not often leant themselves to such procedures. The facility is only likely to assist the parties in cases where there are one or few distinct issues on which preliminary views can be readily expressed without substantial presentation of the merits from either party. In such cases the Court will often be more inclined to conclude that a final determination of the separable issues under Order 33 rule 3 or Order 14A will more effectively and economically dispose of the whole action than a non - binding early neutral evaluation.
Nevertheless, we believe that in some cases the facility of an early neutral evaluation by the Commercial Judges can be a useful tool in persuading or encouraging settlement.
4. Does the Experience of the Last Two Years justify Continuance of the Practice Direction?
The Working Party has no doubt that in appropriate cases ADR orders have an important contribution to make to the early settlement of Commercial litigation. Even if the parties do not respond to such orders by attempting ADR procedures, the impetus towards settlement by direct negotiation is undeniable. Furthermore, the fact that by such orders, the court takes an active part in directing the parties' minds towards settlement at a particular stage, often at an early stage in their pre-trial activities probably leads to an acceleration of settlement, even without mediation. The saving of costs to the parties and judicial time for the Court amply justifies continuation of the jurisdiction, at least as currently exercised. In the vast majority of cases where ADR orders have been made, successful mediation or settlement has followed.
Consideration has been given to whether one effect of ADR orders might be that litigants, particularly those from overseas, will be deterred from referring their disputes to the Commercial Court.
Although this would be a matter of great concern, there is so far no evidence to suggest this consequence is a reality. This Working Party is more concerned about the legal costs of heavy commercial litigation in London operating as a deterrent to the selection of English jurisdiction. In as much as successful ADR orders operating well before trial will tend to reduce those costs, it can be strongly argued that such orders are more likely to encourage than to deter the use of the English courts.
5. Should ADR Orders be made in all cases?
The Working Party believes that there are many cases within the range of Commercial Court work which do not lend themselves to ADR procedures. The most obvious kind is where the parties wish the court to determine issues of law or construction which may be essential to the future trading relations of the parties, as under an on-going long term contract, or where the issues are generally important for those participating in a particular trade or market. There may also be issues which involve allegations of fraud or other commercially disreputable conduct against an individual or group which most probably could not be successfully mediated. In such cases where ADR is unlikely to be given a chance by the parties, there is no justification for delaying the course of the proceedings or putting the parties to further unnecessary expense by introducing a regime of ADR orders in all cases. As the regime remains non - mandatory, such a practice would materially diminish the success - rate achieved by the present regime. It would also fail to convey to the parties that the judge making the order had formed the view that their case was particularly appropriate for ADR procedures, thereby encouraging them to try harder to achieve a settlement by that means. The process of judicial selection of the "right" cases for ADR produces the maximum flexibility and the most user - friendly and therefore potentially effective case management.
6. Should ADR Orders incorporate Costs Sanctions or other Inducements to Mediation?
In view of the fact that the letters received by the Court which reported a failure to settle following ADR orders indicated that the parties had decided not even to attempt mediation, the Working Party considered whether it might be appropriate for the court to impose costs sanctions in some such cases. The concept would be that if the court took the view that, instead of giving mediation a fair chance, the parties had simply decided to litigate for no specific reason, it might be appropriate, following trial of the action, to deprive the successful party of some or all of its costs. The purpose of such an order would be to deter parties from excluding ADR procedures without any serious grounds or out of prejudice against ADR on the part of them or their solicitors.
Such investigations as have been made do not suggest that a similar residual costs sanction is operated in any other jurisdiction. In Singapore, however, an inducement is granted to successful ADR participants in the form of a rebate of Court fees already paid by the parties.
After careful consideration the Working Party concluded that neither a costs sanction nor a Court fees rebate scheme should be introduced. The following considerations caused us to take this view.
(i) Given the Working Party's view that the ADR jurisdiction should remain non - mandatory, it was undesirable that the court should become involved in investigating the circumstances in which the parties had failed to agree to initiate ADR.
(ii) Investigation by the Court of such circumstances might well impinge on areas of privilege which in a consensual system ought to remain invisible.
(iii) Parties who wished to avoid ADR might well seek to avoid adverse costs orders by advancing bogus or at least contrived reasons for their decision which, if superficially plausible, the court would have to accept as sufficient.
(iv) If the parties were so adamantly opposed to mediation it was improbable that the threat of an adverse costs order of the kind proposed would deter them from dismissing ADR out of hand.
(v) Court fees are currently set at such a low level in this country that it was hard to believe that any rebate scheme would be likely to operate as an inducement to give mediation a try where parties were so strongly opposed to it that they would not agree even to attempt it.
The Working Party considers that in order to discourage the parties simply ignoring the Court's order or rejecting ADR out of hand without giving it a serious chance, it is desirable that if the parties wish to continue their action without even having tried ADR; they ought to come back before the court and discuss with the judge why they have not responded more constructively to an ADR order previously made. This need not involve any invasion of matters of privilege, but it would enable the court to take a more persuasive course if it appeared that the parties had not really applied their minds in a properly informed manner to the prospects of achieving settlement by ADR. While the present system of letters to the court reporting and explaining failure to achieve settlement by ADR should continue in those cases where ADR has been commenced, ADR orders should in future require that, before continuing towards trial, the summons for directions be restored in those cases where ADR has not even been attempted.
In a recent lecture to the Chancery Bar Association Mr Justice Lightman put forward a number of suggestions for driving the parties to use their best endeavours to make ADR succeed. He has recommended that the party responsible for the failure of the ADR order to achieve settlement should be made to bear the whole or part of the ultimate costs of the action. ADR orders should therefore incorporate words which reflected that sanction.
This Working Party does not agree with that suggestion. It involves a fundamental departure from the confidentiality of negotiations for settlement and the insulation from them of the judicial process. The success rate of ADR orders is so high that this course would hardly seem justified in order to achieve success in those few cases where there is no genuine bilateral commitment to a successful ADR. Further, in those cases where ADR failed or was not commenced such orders would involve an investigation by the court into responsibility for what had occurred which in a complex series of negotiations might be very time-consuming and would itself increase the costs for both sides. These unattractive consequences far outweigh the value of the marginally increased success rate of ADR orders which might thereby be achieved.
7. Preventing ADR causing delay to the Preparations for Trial
The Working Party recognises the need to avoid substantial disruption of pre-trial preparations by the parties' attention being diverted to attempting to initiate and pursue mediation procedures. It is also of the view that it is imperative that plaintiffs should not come to view ADR orders as providing defendants with a means of delaying justifiable claims. This effect can be prevented by a number of different methods, namely:
(i) inserting in ADR orders a date by which ADR must be completed;
(ii) inserting in ADR orders dates by which the parties should exchange lists of available neutrals and by which, if they are unable to agree on a name from those lists, the matter should return to court and;
(iii) by the early fixing of the date for trial.
As to the imposition of (i) a completion date, this may only be appropriate in matters of some urgency, where the pre-trial timetable is very short and it is essential that the parties know where they stand as early as possible. Its disadvantage is that it introduces an element of inflexibility into the settlement process which may prove counter-productive in some cases. Where an ADR order is made with reference to other stages of the pre-trial timetable to which fixed dates have been given it would seem unnecessary to super-add a further fixed date applicable to ADR. If the next stage in the timetable cannot be proceeded with until the parties have reported to the court, a further fixed date may be superfluous.
As to (ii) the requirement to exchange lists of neutrals by a fixed date, it is believed that this should be much more widely used. It concentrates the parties' minds on the need to give urgent and very serious consideration to ADR as a settlement process and to initiate that process at a very early stage.
As to (iii) the early fixing of a date for trial, if at the time when the parties commence their endeavours to comply with the ADR order a trial date were already fixed, there would clearly be a strong incentive to make progress with ADR simultaneously with trial preparations. Accordingly, there would be less risk of delay due to ADR orders if at the time when the order were made a time limit were imposed on the fixing of the trial date. Normally, a summons for directions is heard when the pleadings have closed and discovery is largely completed. If on that occasion an order were made requiring the fixing of the trial date by no later than a given date, the entire pre-trial timetable would be driven by the need to maintain sufficient momentum to be ready for trial on the date so fixed.
Suggestions have been made in some quarters that there should be a court official whose responsibility it is to follow up ADR orders in order to monitor the response of the parties and with responsibility for seeing that progress is made. This Working Party is not persuaded that this course is necessary or desirable. If the ADR orders are initially made on a non-mandatory basis, it is undesirable that, until the parties have finally abandoned the process, the court should intrude in the progress of their efforts towards settlement. The plaintiff will almost always have an interest in pursuing its claim with as little delay as possible and it can therefore be assumed that in most cases the plaintiff will return to court if ADR is not being genuinely progressed by the defendants.
Furthermore, since the success of the Commercial Court depends indisputably on the direct involvement of the Commercial Judges at all interlocutory stages and since it is they alone who make ADR orders in the first place, it would be unsatisfactory to vest any other court official with power to interfere with the running of ADR or its impact on the pre-trial timetable.
8. The Need for the Court to Explain ADR to the Parties
Experience suggests that when an ADR order is made those representing the parties may have little knowledge or experience of ADR in practice. The judges should in that event explain with some care the effect of the order made and in particular, if necessary, what ADR entails.
In this connection, in appropriate cases an explanation should be given of judicial early neutral evaluation (ENE). The Working Party is strongly of the view that this facility has been so little used because the legal profession is not generally aware that it is available or how it can be arranged. It should accordingly, be explained that, if an order for ENE by a commercial judge is made, arrangements for the appointment of the judge must be made with the Listing Office in the same way as for the fixing of a summons. The arrangements for the ENE should be treated by the Listing Office as a matter deserving of a degree of priority.
Attached to this Report are some Guidance Notes which, it is recommended, should be provided to the parties to ADR orders at the time of making the order.
9. Court - accredited Neutrals
The Working Party is not in favour of the court taking any part in the approval or accreditation of those who hold themselves out as neutrals. This course would be consistent with the practice adopted in many other jurisdictions where the court does not appoint its own neutrals. Although there are many who have received some form of ADR training, and who wish to be appointed as neutrals there are others who have not but who wish nonetheless to be appointed. Amongst the latter are several retired judges. At present the Listing Office provides parties with a list of umbrella institutions providing trained neutrals, such as CEDR, as well as a list of retired judges who may or may not have received any formal ADR training.
It is not considered that the court should be involved in any way in the accreditation of ADR neutrals. It is, however, certainly true that more and more people are purporting to offer their services as neutrals to the public at large. It is normally not difficult to ascertain whether they have obtained experience from one of the practical training bodies.
This Working Party believes that ADR techniques require intensive and specialist training and that a trained mediator is more likely to achieve results than one who is not trained at all. However, experience shows that sometimes those without such training but with long experience of commercial litigation can achieve significant access as neutrals.
For these reasons it is recommended that the existing practice of the Listing Office should be altered to the extent of listing those institutions offering ADR-accredited members who have been trained in the relevant techniques and also those retired members of the judiciary who wish to be appointed, but indicating that some of those included may not have received ADR training.
Litigants will then be able to obtain the names of individuals offering ADR services from one or other of the institutions concerned.
10. The Form of ADR Orders
Attached to this Report is a form of ADR order which reflects many of the recommendations set out above. The Working Party is, however, strongly of thie view that such form of order should not be regarded as an inflexible formula. On the contrary, flexibility is an essential feature of such orders. They must be fashioned to suit the best interests of the parties in accordance with the judge's perception in each case.
Dated: 14 July 1998
Mr Justice Colman - Chairman
Mr Justice Tuckey
Mr Justice Cresswell
Anthony Pugh Thomas (Lovell White Durrant)
Charles Williams (Thomas Cooper & Stibbard)
Anthony Willis (Clifford Chance)
Diana Good (Linklaters & Paines)
Elizabeth Birch (COMBAR)
Appendix 1
Practice Direction of Mr Justice Waller dated 7th June 1996
On 10th December 1993 Mr Justice Cresswell issued a Practice Statement on the subject of ADR indicating that the judges of the Commercial Court wished to encourage parties to consider the use of ADR. In consequence of that Practice Statement, amendments were made to the standard questions to be answered by the parties in preparation for the Summons for Directions and to the standard questions to be answered as part of the Pre-Trial Check List. Additional questions were inserted in order to direct the attention of the parties and their legal advisers to ADR as a means of settling their disputes. By that practice Direction, legal advisers were urged to ensure that parties were fully informed as to the most cost effective means of resolving the particular dispute.
The Judges of the Commercial Court in conjunction with the Commercial Court Committee have recently considered whether it is now desirable that any further steps should be taken to encourage the wider use of ADR as a means of settling disputes pending before the Court. In the belief that, whereas the Commercial Court will remain an entirely appropriate forum for resolving most of the disputes which are commenced before it, the settlement of actions by means of settling disputes pending before the Court. In the belief that, whereas the Commercial Court will remain an entirely appropriate forum for resolving most of the disputes which are commenced before it, the settlement of actions by means of ADR (i) significantly helps to save litigants the ever-mounting cost of bringing their cases to trial; (ii) saves them the delay of litigation in reaching finality in their disputes, (iii) enables them to achieve settlement of their disputes while preserving their existing commercial relationships and market reputation; (iv) provides them with a wider range of settlement solutions than those offered by litigation; and (v) is likely make a substantial contribution to the more efficient use of judicial resources, the Judges will henceforth adopt the following practice on the hearing of the first inter partes Summons at which directions for the interlocutory progress of the action are given or at subsequent inter partes hearings at which such directions are sought
If it should appear to the judge that the action before him or any of the issues arising in it are particularly appropriate for an attempt at settlement by ADR techniques but that the parties have not previously attempted settlement by such means, he may invite the parties to take positive steps to set in motion ADR procedures. The judge may, if he considers it appropriate, adjourn the proceedings then before him for a specified period of time to encourage and enable the parties to take such steps. He may for this purpose extend the time for compliance by the parties or either of them with any requirement under the Rules or previous interlocutory orders in the proceedings.
If, after discussion with those representing the parties, it appears to the judge that an early neutral evaluation is likely to assist in the resolution of the matters in dispute, he may offer to provide that evaluation himself or to arrange for another judge to do so. If that course is accepted by the parties, the judge may thereupon give directions as to such preparatory steps for that evaluation and the form which it is to take as he considers appropriate. The parties will in that event be required to arrange with the Commercial Court Listing Office the time for the evaluation hearing having regard to the availability of the judge concerned.
Where early neutral evaluation is provided by a judge, that judge will, unless the parties otherwise agree, take no further part in the proceedings either for the purpose of the hearing of summonses or as trial judge.
Except where an early neutral evaluation is to be provided by a judge, the parties will be responsible for agreeing upon a neutral for the purposes of ADR and will be responsible for his fees and expenses. As indicated in the Practice Statement on ADR made by Cresswell J. on 10th December 1993, the Clerk to the Commercial Court keeps a list of individuals and bodies that offer mediation, conciliation and other ADR services. If, after ADR has been recommended to them by the judge, the parties are unable to agree upon a neutral for ADR they may be consent refer to the judge for assistance in reaching such agreement.
On the hearing of any summons in the course of which the judge invites the parties to take steps to resolve their differences by ADR he may on that occasion make such order as to the costs that the parties may incur by reason of their using or attempting to use ADR as may in all the circumstances seem appropriate.
Should the parties be unable to resolve their differences by ADR or otherwise within the period of any such adjournment as may be ordered, they may restore the Summons for Direction or other summons for the purposes of reporting back to the judge what progress has been made by way of ADR (such report to cover only the process adopted and its outcome, not the substantive contact between the parties and their advisors) and whether further time is required for the purposes of ADR and, where efforts towards settlement by means of ADR have proved fruitless, for the purpose of obtaining further interlocutory directions in the proceedings.
Parties to pending proceedings who consider that ADR might be an appropriate form of dispute resolution for those proceedings or who wish to discuss the applicability of ADR with a commercial judge will be strongly encouraged to bring on the summons for directions at an earlier stage in the proceedings than would otherwise be justifiable. The fact that in such a case pleadings have not yet closed or that discovery has not yet been completed will not be regarded by the court as a reason for declining to consider the applicability of ADR in that case.
Appendix 2
ADR Orders in the Commercial Court
Guidance Notes for Litigants and their Lawyers
Introduction
1. This guidance refers only to mediation (the most common method of ADR) and to Early Neutral Evaluation, but not to Adjudication or Arbitration).
2. This guidance is intended as an outline only. Parties or their lawyers should take expert ADR advice if they are unclear about the process in any way.
Mediation Essentials
3. Mediation is a well-tried, robust and powerful process. It is safe because no ultimate outcome can be imposed on any party except by agreement and because what is said or done during a mediation should be confidential and covered by 'without prejudice' privilege up to the point when agreement is reached.
The neutral Mediator, chosen by the parties direct or through one of the ADR institutions, will direct procedure but it is for the parties to choose their own outcomes in negotiation with the other parties assisted by the neutral Mediator.
The power of the process comes from the mixture of direct negotiation and private meetings helped by the experience of the Mediator, and the skill and experience of the parties and their lawyers. It can provide considerably more than direct negotiation. For that reason, even where direct negotiations have failed and where the parties are instinctively hostile to further attempts to settle, mediation often achieves a settlement. The range of possible solutions can be much wider than is possible in Court.
The ultimate aim of a mediation is a binding agreement.
Time
4. Normally, the Court will wish the parties to proceed to mediation swiftly, so that Court time is not wasted with procedural or other steps which become unnecessary - and so that trial dates are not affected.
The most effective and speedy mediations are usually those in which the parties appoint a Mediator very quickly and then make use of the Mediator's experience and skills to help construct the procedure.
A mediation could take place in a matter of days. Even the most complex mediation should be capable of being arranged and dealt with in a few weeks at most.
Appointment of Mediators
5. This is usually done by the parties, sometimes direct or perhaps after consulting one of the mediation institutions, who will put forward names on request. In choosing a Mediator, parties should look for experience of mediation, after formal ADR training if possible. If subject matter expertise is thought necessary (but it is usually unnecessary, the parties and their advisers know much more about the technicalities than anyone) an expert in the field can be appointed. However, experience as a Mediator is much more important and a suitably qualified co-Mediator or Pupil Mediator can supply any specialist knowledge which might be thought necessary. Fees may be prescribed by the mediation institution or negotiated on a daily rate with the Mediator.
Mediation Agreements
6. These are usually short and uncomplicated. Some mediation institutions supply standard model agreements. A Mediator chosen in principle can help in framing the agreement. It will usually be a mistake to negotiate a complex mediation agreement without first choosing a Mediator or consulting a mediation institution for help.
Steps in a typical Mediation
Day 1 - Commercial Court ADR Order
Days 1-5 - Discussion between the parties and their lawyers and consultation with a mediation institute produces a short-list of three suitable Mediators
Day 6 - Parties agree on one of the three.
Day 10 - Preliminary meeting of the parties, their lawyers and the Mediator when the Mediator suggests a timetable for subsequent meetings, a form of mediation agreement, an exchange of background information and a short summary of each side's case. The procedure is agreed.
Day 15 - Parties exchange a 10 page summary of each other's position with copies of a core bundle including pleadings in the action.
Day 20 - Mediation, Day 1. Mediation commences, lasts all day and part of the evening. Parties attend with their lawyers.
Day 21 - Mediation, Day 2. Settlement reached, documented by the parties and their lawyers.
Day 22 - The Court is informed of the settlement with a draft Tomlin Order putting the settlement into place and a request to vacate the trial date.
Early Neutral Evaluation
The function of this procedure is to provide the parties to a dispute with a non-binding assessment by a neutral of their respective chances of success were the litigation to be pursued.
The procedure normally involves the selection of a neutral, who may be a Commercial Judge, and the concise presentation to the neutral of the nature of the dispute and the parties' respective contentions. The neutral will then give the parties his evaluation of the issues, indicating the strength and weaknesses of the claim and defences.
There will usually first be a preliminary meeting at which the neutral meets the parties and their representatives and agrees the future procedure.
Normally, the neutral will initially be provided with a limited amount of pre-reading, such as skeleton arguments, pleadings, witness statements and the key documents. There may then be a short hearing, not normally exceeding one or two days, in the course of which each party orally presents its case. That may in appropriate cases involve key witnesses and/or experts giving evidence. Such a hearing should always be attended by a board member or other representative of the parties with authority to settle the case.
In simpler cases or where the parties wish to save costs there is no reason why the entire procedure should not be in writing without the need for an oral hearing.
The neutral will not normally act as a mediator and when the evaluation is to hand it will be up to the parties to take whatever further course they consider best towards settlement. Or they may prefer to let some or all of the issues go to trial. If they do so, what passed in the course of the early neutral evaluation is entirely privileged.
Where a Commercial Judge is appointed as early neutral evaluator, he will taken no further part in the litigation unless the parties wish that he should do so. Application for the appointment of a Commercial Judge should normally be made to the Listing Office.
Appendix 3
Form of ADR Order
1. The parties shall within 5 days exchange lists of 3 neutrals each who are available to conduct ADR procedures in this matter prior to (date).
2. Within 2 days thereafter the parties shall in good faith endeavour to agree a neutral from the lists so exchanged.
3. Failing such agreement by (date) this summons will be restored to enable the court to facilitate agreement on a neutral.
4. The parties shall take such serious steps as they may be advised to resolve their disputes by ADR before the neutral so chosen by no later than (date).
5. If the matters in issue are not finally settled, the parties shall inform the court by letter prior to (exchange of list of documents or of witness statements or exchange of experts' reports or setting down for trial) what steps towards ADR have been taken and (without prejudice to matters of privilege) why such steps have failed. If the parties have failed to initiate ADR procedures they are to appear before Mr Justice ......... for further consideration of the Order.
6. Costs in the ultimate cause.