ALTERNATIVE DISPUTE RESOLUTION (8336/02)
Letter from the Chairman of the Committee
to the Rt Hon Baroness Scotland of Asthal QC, Parliamentary Secretary,
Lord Chancellor's Department
The Green Paper was considered by Sub-Committee
E (Law and Institutions) at its meeting on 12 June. The Committee
was grateful for your Explanatory Memorandum and noted the cautious
approach being taken by the Government to this wide-ranging document.
The Committee also noted that while the Government
is not proposing to consult on the Green Paper it has, however,
drawn it to the attention of a number of interested parties. It
would be helpful to the Committee when considering what further
action to take in relation to the document if you could provide
a list of those bodies and individuals to whom you have written
requesting copies of any response they might make to the Commission.
We would be particularly interested to see whether the following
have been included: Dame Elizabeth Butler-Sloss, President of
the Family Division; Lord Justice Thorpe, Chairman of the Court
of Appeal Mediation Scheme Steering Committee; Mr Justice Colman;
the Commercial Court Users' Committee; the Chancery Division Users'
Committee; CEDR; the Law Society; and the Commercial Bar Association.
The Committee decided to hold the document under
13 June 2002
Letter from the Rt Hon Baroness Scotland
of Asthal QC to the Chairman
Thank you for your letter of 13 June. You have
asked that the Committee be kept informed of which individuals
and bodies the Government has contacted requesting copies of their
responses to the Commission's Green Paper on ADR.
I can confirm that all those specified in your
letter have been, or will be shortly, notified of the existence
of the Green Paper and asked to copy any responses to this Department.
23 July 2002
Letter from the Chairman to the Rt Hon
Baroness Scotland of Asthal QC, Parliamentary Secretary, Lord
Thank you for your letter of 23 July which was
considered by Sub-Committee E at its meeting on 9 October. We
are pleased to learn that copies of the Green Paper have been
sent to those listed in my letter of 13 June.
The Committee decided to retain the document
under scrutiny pending receipt of a copy of the Government's own
response to the Green Paper.
10 October 2002
Letter from the Rt Hon Baroness Scotland
of Asthal QC, Parliamentary Secretary, to the Chairman
In your letter of 13 June you indicated that
the Committee had decided to hold the European Commission's Green
Paper under scrutiny, pending receipt of the Government's response.
I now enclose a copy of the UK response to the
Green Paper on ADR. The Committee will note that the overall response
to the questions posed by the Commission is that regulation of
ADR is to be avoided. This view is broadly supported by other
respondents from within the UK, who have copied their responses
to this Department.
1 November 2002
European Commission: Green Paper on Alternative
Dispute Resolution on Civil and Commercial Law
1. In the United Kingdom there is strong
and growing support for the use of alternative methods of dispute
resolution. In this respect what is meant by alternative resolution
relates to the practice of supporting negotiation towards an agreed
settlement amongst disputing parties. This is sometimes achieved
by direct negotiations between the parties or such negotiations
supported by their representatives or legal advisers.
2. In other situations ADR relates to the
conduct of mediation or conciliatory processes by the intervention
of a third party. For the purposes of this response to the Green
Paper the United Kingdom will use the expression ADR to mean that
type of process where a third party is involved in supporting
negotiation. The United Kingdom will not refer to as ADR arbitration,
adjudication in the formal sense (such as construction contract
adjudication), schemes whereby third parties decide or recommend
decisions to litigants or those in dispute situations or any form
of on-line or other complaints procedure which does not involve
the actual resolution by agreement of disputes.
3. The UK believes that ADR, including online
schemes, has the potential to make a valuable contribution to
consumer confidence in the single market and in electronic commerce.
As the Green Paper points out, going to court an be costly and
time-consuming, particularly with cross border cases. ADR can
offer low cost, user-friendly ways of settling contractual disputes.
It can avoid some of the difficult questions of jurisdiction and
applicable law. Efficient, low cost ways of settling contractual
disputes are equally vital to business. We also see ADR as a component
of self-regulation: good quality industry codes of practice should
provide consumers with access to out of court dispute resolution.
The UK has been a strong supporter of EU and international initiatives
to promote business to consumer ADR.
4. A number of initiatives have been introduced
to encourage and promote the increased use of ADR generally in
England & Wales and Scotland. The other jurisdictions within
the UK, are equally supportive of ADR and Northern Ireland will
shortly be introducing pilot mediation schemes for both civil
and family disputes.
5. The Civil Procedure Rules, that were
introduced in England & Wales in April 1999, impose a duty
on the courts to actively encourage the use of ADR. The overriding
objective of the rules is to deal with cases justly, and this
is being achieved by effective case management, giving the courts
powers to control the conduct of litigation. This will include,
encouraging the use of ADR, fixing timetables, or otherwise controlling
the progress of a case, and giving directions to ensure that the
trial of a case proceeds quickly and efficiently. The Rules also
allow for proceedings to be stayed so that the parties can explore
the use of ADR methods to settle their disputes. This can be done
either by application of one of the parties on the court's own
6. The Rules also seek to influence the
parties' behaviour before court proceedings are issued, by the
introduction of pre-action protocols. Pre-action protocols try
to engage parties who are in dispute to take all practical steps
to try and resolve the matter as quickly as possible outside the
court, including the use of alternative dispute resolution methods.
Failure to comply with the protocol may lead to costs sanctions
being imposed if the case proceeds to trail.
7. There have been some very significant
judgments handed down by the Court of Appeal for England &
Wales in the last 12 months.
Cowl and others v Plymouth City Council
( EWCA Civ 1935). The case involved a dispute between residents
of a care home and the local authority about the closure of the
home; the residents sought judicial review of the Council's decision.
Giving the judgment of the court, the Lord Chief
Justice said, in part, that the appeal illustrated that, even
in disputes between public authorities and the members of the
public for whom they are responsible, insufficient attention is
paid to the paramount importance of avoiding litigation whenever
possible. Both sides must by now be acutely conscious of the contribution
alternative dispute resolution can make to resolving disputes
in a manner which both meets the needs of the parties and the
public and saves time, expense and stress.
The Lord Chief Justice also said that the parties
should have been able to come to a sensible conclusion as to how
to dispose the issues which divided them. If they could not do
this without help, then an independent mediator should have been
recruited to assist. That would have been a far cheaper course
to adopt. Today sufficient should be known about ADR to make the
failure to adopt it, in particular when public money is involved,
Dunnet v Railtrack ( EWCA Civ 302)
This case concerned a claim for damages in negligence.
The Court of Appeal refused the successful party its costs on
the grounds that the party failed to mediate when the other party
indicated a willingness to do so.
In handing down this judgment, the Court Said:
"Skilled mediators could achieve results
that went far beyond the court's powers and lawyers who dismissed
the opportunity for arbitration or mediation out of hand would
suffer uncomfortable consequences. . . It has to be emphasised
that it was a lawyer's duty to further the overriding objective
under CPR r1.1. If parties turned down ADR out of hand they would
suffer the consequences when costs came to be decided."
8. A number of court-annexed schemes have
been established in courts in England & Wales that steer parties
towards ADR once proceedings have been commenced. However, research
has shown that take up of these schemes, even where ADR is offered
free of charge or at a reduced rate, is very low.
9. ADR plays an important role in the resolution
of consumer disputes in the UK. A considerable number of schemes
are in operation, including a range of mediation and conciliation
services and sectoral ombudsmen, trade association arbitration
schemes (of which the Chartered Institute of Arbitrators runs
10. There is little reference in the paper
to the development of family mediation in England & Wales.
Until 1963 any agreement between the parties about arrangements
was an absolute bar to the grant of divorce or judicial separation.
This prohibition was finally abolished in 1971 when the Divorce
Reform Act 1969 came into force. The concept of what is now called
mediation was by then in existence and was seen as assisting parties
to reach agreement or reduce the extent of the dispute about every
aspect of the breakdown of their marriage. Local mediation (then
called conciliation) services were set up by volunteers from 1978.
Voluntary family mediation services (organismes associatifs)
developed widely across the country with national organisations
being set up from 1981. In 1988 the Law Commission for England
& Wales included mediation in its proposals for the reform
of the divorce law which resulted in the Family Law Act 1996.
This led to recognition of the need for the reduction of the fragmentation
of services in England & Wales which in turn resulted in the
consolidation of three major voluntary organisations providing
family mediation into the UK College of Family Mediators in 1996.
Publicly funded mediation has been implemented under the Act.
11. For family mediation, the Government
supports the benefits of using ADR. It is not, however, the case
that parties who receive publicly funded family mediation in England
& Wales are free to choose any mediator to conduct the mediation.
Only mediators meeting the Legal Services Commission criteria
can conduct publicly funded family mediation.
12. On the operation of the Brussels II
Regulation, anecdotal evidence about a small number of cases which
we have received from the legal profession has shown that the
need to establish jurisdiction has led to parties in divorce proceedings
putting their case before their preferred jurisdiction without
prior recourse to ADR, in line with the possibility suggested
at paragraph 49 of the Green Paper.
13. The position in Scotland with regard
to ADR and mediation is that there are some signs of advance in
the use of supported negotiation and mediation. For many years
the practice of the resolving of disputes in family law and parental
responsibility issues has been supported by mediation. Family
Mediation Scotland co-ordinates a number of regional mediation
organisations in Scotland focusing particularly on the resolution
of disputes between parents and children. These are supported
by funds provided by the Scottish Executive.
14. In recent years this practice has been
extended to other areas of family law, notably in relation to
property matters. Comprehensive Accredited Lawyer Mediations operate
to resolve property disputes following the breakdown of marriage
and this supports what is already well established as a negotiation
culture amongst family practitioners in Scotland.
15. For many years the rules of procedure
in the sheriff court have contained a power enabling the Sheriffs
to refer cases involving children to mediation and this has recently
been extended to other areas of family practice.
16. More recently new Commercial Cause Rules
in the Sheriff Court in Scotland have contained a provision enabling
Sheriffs to refer commercial cases for mediation where appropriate.
These Rules are in force in Glasgow Sheriff Court which is one
of the busiest courts in Europe and are shown to support negotiation
effectively as a means of settling contentious commercial actions.
17. There is also in Edinburgh Sheriff Court
a court-based mediation scheme in which low value and consumer
claims are referred to accredited mediators for mediated resolution.
This scheme, which was supported in its initial phase by EC funds,
has demonstrated the value of mediation as a method of assisting
negotiated settlement of claims of this kind and studies are being
undertaken to consider how to roll this out further into other
areas of the country.
18. In addition to these schemes, locally
based mediation has been seen to be of value in relation to neighbourhood
disputes of various kinds and also in commercial contracts where
there is an incentive to the parties who are in dispute to try
and resolve disputes between them in such a way that they can
continue their commercial and working relationships. To this end
a number of commercial mediator businesses have been established
in recent years whose practice is growing and in which confidence
19. The UK Government has further demonstrated
its commitment to ADR by announcing the "ADR Pledge"
in March 2001. Under the terms of the Pledge all Government Departments
and Agencies are committed to using ADR to settle their own disputes,
in all suitable cases. In leading by example in this way the Government
hopes to promote and encourage the wider use of ADR. In July 2002
the Lord Chancellor's Department published a report detailing
the activity of Government Departments resulting from the Pledge.
A copy of this report, which includes the full text of the pledge,
is annexed to this paper.
20. In general the United Kingdom does not
take the view that regulating ADR is a sensible way forward. ADR
is based on consensus and, therefore, is a matter of agreement.
It must respond to the wishes and desires of parties in the free
market to be able to choose the process of agreement or dispute
resolution which suits them and also the third party who is going
to support that process. Given the absence of generally public
sponsored and organised ADR (with the exception of certain programmes
such as Family Mediation which are supported by public funds)
the UK takes the view that public regulation of ADR or mediation
is at best premature and at worst inappropriate.
21. Nevertheless, there is some room for
evaluating the extent to which, for cross-border cases of various
kinds, it may be appropriate to consider criteria and minimum
standards which should be applied in relation to ADR activity.
This should not amount in any sense to regulation. Still less
should it be an attempt to establish uniformity or harmonisation
of the various ADR networks within the Member States but rather
to look at the way in which resolution of disputes cross-border
can be assisted by supporting ADR activity for such disputes.
Separate responses are given for civil &
commercial law and family law. This is because, in the UK, family
mediation is very much of its own kind as compared with mediation
for consumer or commercial disputes. In particular the practice
of mediation in family cases, most notably in relation to children
matters, is so bound up with national law on these matters that
it cannot be separated easily from the law and procedures which
apply in the Member States and in particular in the UK jurisdictions.
Question 1: Are there problems such as to warrant
Community action on ADR? If so, what are they? What is your opinion
on the general approach to ADR that should be followed by the
institutions of the European Union, and what might be the scope
of such initiatives?
Civil & Commercial
22. The biggest problem with regard to ADR
is lack of awareness. This problem requires focus on making clear
to those concerned what benefits can arise in supporting negotiation
to settle disputes. This is a particular problem for cross-border
cases. The most important way of resolving this is to enable information
to be transmitted about the way in which ADR schemes operate in
the various Member States of the Community. The EU institutions,
therefore, should concentrate on initiatives that encourage and
promote cross-border ADR where appropriate and information about
ADR schemes to this end.
23. In this connection the Civil Judicial
Network established by Council Decision 2001/470 should be borne
in mind as a vehicle for making information available. This should
seek to co-ordinate all the information including that about the
European Extra-Judicial Network to provide a comprehensive digest
of knowledge available. The Civil Judicial Network will involve
many of those engaged in seeking to resolve civil disputes including
legal practitioners and advisers and the judiciary.
24. The Green Paper rightly draws attention
to the contribution ADR can make to the resolution of consumer
disputes, and we see a role for the Community in facilitating
cross border ADR, which is little developed as yet. In particular
the UK strongly supports the establishment of the European Extra-Judicial
Network (EEJ-Net), following Council Decision 2001/470/EC and
Commission Recommendations 98/257 EC and 2001/310/EC. We hope
that priority will be given to the completion of EEJ-Net. This
will require continuing investment of considerable time and money
from the Commission and the Member States.
25. In England & Wales, family mediation
is voluntary (ie not compulsory) and is undertaken to resolve
disputes arising in the context of divorce or separation under
the provisions of domestic legislation. Our research indicates
that mediation is likely to remain a minority choice in family
disputes and that the majority of cases will be resolved using
other methods. The Government encourages the use of family mediation
in appropriate cases. However, not all cases can be resolved through
mediation and there are limits to the extent to which it is appropriate
to promote mediation. The scope of any international proposals
is likely to be limited. There is no evidence of a significant
number of disputes which would be helped by an EU initiative.
One current problem arising from an EU Regulation is identified
at paragraph 12 above.
26. In Scotland family mediation has existed
in some form or another for about 25 years. This is focused traditionally
on the resolution of disputes between parents as to the upbringing
of their children and is now entrenched firmly in the national
law which also incorporates elements of the United Nations Convention
on the Rights of the Child, notably Article 12 about the views
of children. In principle, Scotland encourages a negotiation culture
in these matters and seeks to return primary responsibility for
relations with their children to parents.
27. It follows that negotiation should be
the aim in all of these cases and where mediated or supported
negotiation is feasible then it is encouraged. It has to be acknowledged,
however, that this is not possible in all cases and indeed in
certain cases should not be attempted, notably those where there
is domestic abuse or a power imbalance.
28. To support this policy the rules of
court in the sheriff court in Scotland where the bulk of family
actions take place have for long enabled the Sheriffs to refer
cases to mediation. There is a network of mediation organisations
in Scotland which are voluntary and for which no charge is levied.
These organisations are in part supported by public funds from
the Scottish Executive and from local authorities. They are co-ordinated
by a central organisation.
29. Developments in family law in Scotland
have involved the introduction of a mediation stage in court procedures
where matters of parental responsibility are under consideration.
A special hearing called the child welfare hearing was established
in the sheriff court to enable parties to reach conclusions with
the negotiation support of the Sheriff. This responds to one of
the norms of Scottish family law which is that the court should
not make an order in relation to parental responsibility unless
it is clearly in the interests of children that it should do so.
30. Mediation is also available for family
matters after divorce. The network of Comprehensive Accredited
Lawyer Mediators can be supported by legal aid in appropriate
cases. These mediators deal primarily with matters of matrimonial
property where the Scottish law enjoins an attempt at clean break.
31. All of these initiatives based on national
law have lessons for cross-border cases but cross-border mediation
will be that much more difficult given mediation techniques which
involve shuttle diplomacy negotiation to and fro between the parties
and a series of structured meetings in which the discussions become
more profound and more focused. This would be something very difficult
in international matters although this does not rule out attempting
Question 2: Should the initiatives be confined
to defining the principles applicable to one single field (such
as commercial or family law)field by fieldand in
this way discriminate between these different fields, or should
they as far as possible extend to all the fields governed by civil
and commercial law?
Civil & Commercial
32. Although the two Recommendations referred
to in the Green Paper describe as "principles" the requirements
for out of court bodies, we consider they are in fact minimum
standards. The adoption of minimum standards may be a way to deal
with certain issues in relation to ADR. There are certain minimum
standards which are applicable across the board such as, for example,
those of impartiality, speed, openness and fairness to the parties
and procedural propriety generally.
33. On the other hand these are not regulated,
by and large, within Member States, including the UK, and therefore
it seems difficult to see how this can or should be done at EC
34. Rather the focus should be on looking
at those areas where it can be seen empirically that there is
real gain and added value to be brought to bear by using ADR as
a method of supported negotiated settlement. This is likely to
arise most frequently where there is value in the continuing relationships
of the disputing parties and where legitimate savings can be seen
by those involved in the disputes by way of time and expense.
35. We note that at paragraph 39 of the
green paper the Commission says that it will not take new measures
relating to consumers until there has been a full evaluation of
EEJ-Net and extensive consultation with Member States, ADR providers
and other interested parties. We very much agree with this approach.
36. Whilst we do not consider it necessary
for principles to be defined at EC level, we are inclined to think
that principles for ADR need to be specialised to a degree and
that a field by field approach would be the most effective. Existing
initiatives in some fields may restrict the scope for more general
37. Mediation in family disputes is unlike
ADR in commercial disputes and currently different professional
bodies are involved in the two fields in England & Wales and
Scotland. In particular family disputes raise different issues
from those in the commercial field. Therefore it would be appropriate
at present to define family mediation as a separate field and
consider the development of mediation in family disputes separately
from the development of its use in other areas of law.
38. Whilst there are certain common denominators
as between mediators supporting dispute resolution in family law
matters and other consumer and commercial areas, for example,
impartiality, fairness, speed there are particularities in relation
to family law mediation which it will be difficult to apply elsewhere.
Family mediation is highly specialised and one of the key elements
in its development was to secure sensible arrangements that would
remove the damaging effects of contentious disagreements between
parents. It also depends very much on the stage at which mediated
settlement is attempted in a matrimonial or (Scotland) parental
responsibility dispute. Sometimes the process almost amounts to
counselling which is unlikely to be the position in other types
Question 3: Should the initiatives to be undertaken
deal separately with the methods of online dispute resolution
(ODR) (an emerging sector which stands out because of its high
rate of innovation and the rapid pace of development of new technologies)
and the traditional methods, or on the contrary should they cover
these methods without making any differentiation?
Civil & Commercial
39. We do not at present see any need to
deal separately with ODR, although it is always possible that
new technologies and business models will necessitate a review
at some stage.
40. For cross-border dispute resolution
there are theoretical advantages in using new technology provided
systems can be developed which are transparent and fair. It may
be necessary, for example, to ensure that there is a clear distinction
between ADR and in-house complaint schemes.
41. Currently on-line dispute resolution
is only at a very early experimental stage in family disputes
in England & Wales and Scotland. We suggest there should be
separate initiatives to develop on-line dispute resolution and
more traditional approaches.
42. It is difficult to see how, particularly
in relation to child centred mediation on parental responsibility
matters, it will be possible to achieve this by on-line methods.
The issues are complex and the process too subtle to lend itself
easily to such systems. The use of electronic means for contact
or communication among parties and mediators is a separate issue
but this does not deal with the substance of the process. Clearly
information about mediation services can be transmitted electronically
especially through the Civil Judicial Network.
Question 4: How might recourse to ADR practices
be developed in the field of family law?
43. The Government is taking forward a number
of options to encourage the use of family mediation. Publicly
funded family mediation under the Community Legal Service Funding
Code has been in place since March 1997 and has now been implemented
throughout England & Wales. Over 270 mediation services have
now concluded contracts with the Legal Services Commission (LSC)
to provide quality assured mediation facilities in all parts of
England and Wales.
44. In addition, the requirements of the
Community Legal Service Funding Code referral to mediation, whereby
people seeking public funding for family proceedings have first
to consider whether mediation might be suitable, have also been
implemented throughout England and Wales. In order to assist people
who require legal advice while taking part in the mediation process,
a new level of assistance, Help with Mediation; has been introduced
in the Community Legal Service to enable people eligible for public
funding to receive advice from a solicitor during and following
45. The Government is also considering how
the public can be better informed about mediation, and supported
a publicity campaign to raise public awareness of the potential
benefits of family mediation in early 2001. A leaflet giving information
about family mediation is available from the Community Legal Service.
46. The Scottish Executive is currently
reviewing the level and nature of its support for family mediation
in Scotland. Grants are paid to the umbrella organisation Family
Mediation Scotland and to certain of the mediation services. Future
policy on family law will look carefully at the place of mediation
against the background that it is difficult to evaluate on a value
for money basis the global effect of mediation in family law generally.
47. In principle, however, the Scottish
Executive supports mediation where appropriate and sees this as
a logical and significant strengthening of the negotiation culture
which is, in any event, prevalent in the practice of family law
in Scotland. The use of separation agreements, for example, is
one way in which the outcome of a mediated negotiation can be
expressed and these are enforceable under the law of Scotland.
48. There is some benefit in looking at
the application of mediation and supported negotiation settlement
for cross-border family law cases. This is particularly where
there are difficult or intractable issues relating to children
arising following separation or divorce. The existing proposal
of Brussels II bis allows for this.
49. However, it should be recognised that
not all cases are suitable for mediation and certain types of
mediation techniques do not lend themselves readily to distance
mediation of the kind envisaged. At EU level therefore whilst
it might be possible to explore methods and standards in relation
to mediation in family law such exploration should be tentative
at present and designed to operate to test the feasibility of
such a mechanism.
Question 5: Should the legislation of Member States
be harmonised so that in each Member State ADR clauses have the
same legal value?
50. No, harmonisation is not appropriate.
Civil & Commercial
51. In its response to the Commission's
Communication on European contract law, the Government said:
"The UK Government considers it axiomatic
any action at EC level should be
in response to a demonstrable need for action at that level to
deal with a real (not just a theoretical) problem;
there should be a reasonable likelihood
of achieving agreement;
the measures proposed should be proportionate
to, and targeted on, the problem in question; and
action should be taken only after
a careful assessment of the net effect of the change on business
and consumers to ensure that it was, on balance, beneficial."
52. These points were explicitly recognised
by the Commission in that Communication (paragraphs 41-44).
53. The Commission's Green Paper on ADR
offers no evidence that there is a real and demonstrable need
for "the legislation of the Member States [to] be harmonised
so that in each Member State ADR clauses have the same legal value".
We consider, therefore, that it should not be so harmonised.
54. In principle the UK takes the view that
for family law matters harmonisation is not the issue. So far
as substantive matrimonial property disputes are concerned the
position in England and Wales is that there is no ante-nuptial
contract into which an ADR clause could be inserted. Unlike some
other Member States the matrimonial property regime does not enable
or require contracting out in this way.
55. In Scotland disputes following the breakdown
of a marriage can be resolved by agreement but this is based extensively
on the application of the rules of national law. Any such agreement
may be enforceable however.
56. In relation to children the position
in England and Wales is that the courts deal with parental responsibility
orders and any variations. In this respect, therefore, it would
be extremely difficult to achieve harmonisation. Even in Scotland
where agreements are possible it is extremely unlikely that any
resort to mediation would be the subject of such an agreement
but rather a separate matter for the parties. In any event harmonisation
would tend to stifle or restrict development of ADR as a consensus-based
dispute resolution mechanism.
Question 6: If so, should the validity of such
clauses be generally accepted or should such validity be limited
where these clauses appear in membership contracts in general
or in contracts with consumers in particular?
Civil & Commercial
57. Given the answer to Q.5, this question
falls. In any event it should be noted that there is already some
harmonisation of rules in relation to contract matters for cross-border
cases. The Rome Convention on Applicable Law will determine the
law to be applied in relation to such agreements. No further work
is needed in this respect.
58. However, to the extent that contractual
terms are the result of agreement freely reached between the parties
to the contract, there can be no grounds (other than those in
the general law relating to the validity of contractual terms)
for limiting the validity of ADR clauses. Protection of consumers,
and of businesses dealing on the other party's standard terms,
is already provided for in sufficiently general terms by the Unfair
contract Terms Act 1977 and the Unfair Terms in Consumer Contracts
Regulations 1999, implementing the Directive 93/13/EEC on unfair
terms in consumer contracts, and we see no evidence that additional
protection is necessary when the contract provides for ADR.
59. We do not consider that harmonisation
of family law is a practical or desirable proposition.
Question 7: What in any case should be the scope
of such clauses?
Civil & Commercial
60. The scope and terms of such clauses
should be entirely a matter for the contracting parties, not for
national or EU legislation.
61. Not applicable to family law in the
Question 8: Should we go as far as to consider
that violation would imply that the court has no jurisdiction
to hear the dispute, for the time being at least?
Civil & Commercial
63. As a matter of common law, contractual
clauses entirely outsting the jurisdiction of the courts in favour
of a private tribunal in questions of law are void as being contrary
to public policy. The courts are similarly not bound by a contractual
provision that private remedies must be exhausted before recourse
is had to the courts (although in these circumstances, the claimant
would have to show cause why the court should intervene). Under
the Civil Procedure Rules parties are expected to behave reasonably
both before and during litigation. An unreasonable refusal to
attempt ADR (whether or not a clause exists) may be seen as unreasonable
behaviour and costs sanctions may be imposed.
64. To do as this question suggests raises
questions under Article 6 of the European Convention on Human
65. If mediation fails or is considered
inappropriate in a particular case, then the dispute will have
to be referred to the court. It would be illogical for cases where
clauses relating to ADR have been breached, and therefore where
ADR has failed or has been rejected, then to be ruled outside
the jurisdiction of the courts. This suggestion would not be appropriate
in family disputes, in which in the majority of cases it is not
possible for mediation to be used successfully.
Question 9: Should the legislation of the Member
States be harmonised so that in each Member State recourse to
an ADR mechanism entails suspension of the limitation periods
for the seising of courts?
Civil & Commercial
67. We do not agree with the Commission's
proposal that parties should be able to suspend limitation periods
by agreement to explore settling the dispute by way of ADR. This
would lead to different limitation periods applying in different
cases, and, as the ADR procedure could take some time, could in
some cases mean that the limitation period is extended considerably
beyond what is prescribed in statute. This uncertainty would create
a general lack of clarity in the law and the possibility of disputes
in individual cases over when the ADR process began and ended
and what its precise effects on the limitation period in question
68. The general practice, in England &
Wales, where the parties are concerned that a limitation period
may expire during or shortly following ADR would be for them to
initiate court proceedings within the relevant limitation period,
and then request the court to stay the proceedings to enable ADR
to take place. This method works well to avoid the dangers of
exceeding a limitation period without losing the benefits that
ADR can bring.
69. In Scotland the law of prescription
normally would lead to any obligation arising from contract to
expire five years after it arose. In relation to a dispute this
would be five years after the dispute crystallised. There is a
long negative prescription of 20 years which might catch some
other cases but broadly speaking it will be necessary for the
prescription period to be broken by a claim being stated or raised.
This should normally take place within a mediation or ADR process
in any event.
70. This question does not apply to family
law since limitation periods are not appropriate in family law
matters. We do not consider that harmonisation of family law is
a practical proposition. Furthermore, the legislative framework
and policy intention in family proceedings relating to children
is that the best interests of the child is the paramount or a
Question 10: What has been the experience of applying
the Commission recommendation of 1998 and 2001?
Civil & Commercial
71. The principles in the first Recommendation
have been a useful foundation for EEJ-Net. In applying the principles
to UK ADR bodies applying to join EEJ-Net we have not encountered
any significant problems. We are however aware that some commentators
have raised questions about some elements of the principles in
Recommendation 98/257, eg:
principle of independence: whether
it is necessary to rule out as decision makers individuals who
have worked in the industry in the previous three years, since
this could deprive some ADR schemes of otherwise well qualified
principle of transparency: whether
it is possible to apply paragraph 2, which requires ADR bodies
to publish annual reports setting out decisions taken etc, to
procedures which may be designed to be private.
principle of legality: whether the
provision on applicable law could be clarified.
72. We have no experience of the application
of the second Recommendation; EEJ-Net has not yet been expanded
to cover consensual ADR schemes.
73. Not applicable to family law in the
Question 11: Could the principles set out in the
two recommendations apply indiscriminately to fields other than
consumer protection law and in particular be extended to civil
and commercial law?
Civil & Commercial
74. Whilst the principles set out in the
Recommendations are, broadly speaking, equally desirable in all
fields of civil and commercial law, much work will be necessary
to ensure that the definitions that support each principle can
be fairly applied to all areas. We are aware, for example, that
some providers of ADR (notably some Trade Association Arbitration
schemes) cannot meet the requirements for independence.
75. In family mediation in England &
Wales the parties to the dispute are helped to reach their own
resolution of the dispute by a neutral third party, who does not
intervene in the sense described at paragraph 37 of the Green
Paper referring to the Commission's 1998 Recommendation. Family
mediations do not usually reach a conclusion in one session as
set out in the 2001 Recommendation. The conduct of a family mediation
is a matter for the independent mediator in conjunction with the
parties, subject to relevant codes of practice where the mediation
is publicly funded. The provisions of these recommendations are
therefore incompatible with family mediation in England &
Wales and Scotland.
76. We would suggest, therefore, that, again,
a field by field approach would be more effective and limited
to cross border disputes.
Question 12: Of the principles enshrined in the
recommendations, which in your view could be incorporated in the
legislation of all the Member States?
Civil & Commercial
77. We are firmly opposed to the idea of
turning the principles into legislation. The strengths of ADR
is that it is relatively informal, flexible, low cost and user-friendly
compared to court procedures. There is a risk that further legislation
would have the effect of making ADR much more like a court process,
doing away with its advantages and making it less attractive to
78. We are not aware of any evidence to
suggest a need for greater regulation of business to consumer
ADR. From our perspective existing methods of control, which include
self-regulation, oversight by professional bodies and national
laws (eg in the case of arbitration and some ombudsman schemes
in the UK) seem adequate. And while principles or guidelines allow
some adaptability, there is a risk that general legislation would
not be able to take account of the many different kinds of ADR
scheme in operation.
79. Not applicable to Family Law in the
Question 13: In your opinion, should the legislation
of the Member States in regulated areas such as family law be
harmonised so that common principles may be laid down with regard
to procedural guarantees?
80. No, we do not consider there should
be harmonisation in regulated areas of law.
81. We do not consider that harmonisation
of the whole of family law is a practical proposition. Specific
EU instruments deal with specific aspects of family law and provide
procedural guarantees for the issues addressed. In family mediation
in England & Wales the agreement reached in mediation may
be submitted to the court as a "consent order" which
is then approved by the court. It might be beneficial for such
a court order to have available to it the provisions of recognition
and enforcement available for orders which are already covered
by EU instruments. However, this should be confined to cross-border
matters and not lead to harmonisation of national laws.
82. In Scotland an agreement concluding
mediation may be enforceable if registered in the Court Books
following consent to execution by the parties. Where this agreement
relates to maintenance or payment of money then it will be enforceable
Question 14: What initiative do you think the
institutions of the European Union should take in close co-operation
with interested circles, as regards the ethical rules which would
be binding on third parties?
Civil & Commercial
83. The UK Government recognises the importance
of binding ethical rules for ADR providers, in particular rules
of professional ethics and professional competence, which apply
to those professionals involved as mediators or otherwise. For
cross-border cases standards of this kind need to be recognisable
for confidence to exist in cross-border mediation.
84. That said, an attempt was made within
the UK to develop common standards but was unsuccessful. Within
the United Kingdom this is left to the professional organisations
to police through their self-regulatory mechanisms. The Law Society
has set up its own levels of competence as part of its establishment
of its own panel for civil and commercial mediators. The Law Society
launched its civil and commercial mediation panel in summer 2002.
85. In principle, therefore, the UK agrees
with the proposition that the most effective initiatives are likely
to be those that help boost such self-regulatory activity as noted
in paragraph 72 of the paper. In addition this helps to preserve
the flexibility of ADR. Accessible information on the establishment
and monitoring of such ethical and professional standards, as
well as their enforcement, will assist this process.
86. For family mediation we see no need
for an EU initiative. In England & Wales and Scotland, the
Government believes that family mediation should be an independent,
self-regulated profession. Many family mediators are members of
the UK College of Family Mediators, which was established in 1996.
The standards set by the Legal Services Commission were recommended
as the common standard for all mediators. The standard developed
by the Legal Services Commission should reassure the public that
those mediation providers given contracts to carry out publicly
funded family mediation are competent. The Law Society has set
up its own levels of competence as part of its establishment of
its own panel for family solicitor-mediators. The Law Society
launched its family mediation panel in late 2000.
87. In Scotland accredited mediators provide
the mediation services organised under the umbrella of Family
Mediation Scotland and there is thorough and rigorous training
available for such mediators. In addition the Law Society of Scotland
accredits family practitioners both in general and as mediators
as part of the scheme of Comprehensive Accredited Lawyer Mediators.
The EU should not do more than make accessible information on
the arrangements in Member States about ethical standards and
norms and complaint procedures of those bodes responsible for
accrediting mediators in the different fields.
Question 15: Should the legislation of Member
States be harmonised so that the confidentiality of ADRs is guaranteed
in each Member State?
Civil & Commercial
89. Again this is an area where an attempt
to introduce legislation may do more harm than good. The confidentiality
requirements will differ between disputes and should, therefore,
be a matter for parties themselves to decide based on the individual
circumstances. To introduce legislation here would stifle the
flexibility that is one of the attractions of using ADR.
90. We do not consider that harmonisation
of family law is a practical or desirable proposition. Furthermore,
in England & Wales, in circumstances where family mediation
relates to children, it is not possible to give an absolute guarantee
of confidentiality since the mediation may reveal information
on child protection issues on which action must be taken to protect
Question 16: If so, how and to what extent should
such confidentiality be guaranteed? To what extent should guarantees
of confidentiality apply also to publication of the results of
Civil & Commercial
91. The confidentiality arrangements need
to be flexible and should depend on the views of the parties and
the circumstances of the individual dispute. In addition, we think
it useful for the spread of ADR to give examples of real life
casessuitably anonymised and with the agreement of the
92. The question is not clear whether publication
relates to disclosure between the parties, disclosure to the court,
or disclosure beyond the court. In cases where the mediation is
concluded by a consent order of the court, the confidentiality
provisions applicable in family proceedings will have effect.
Question 17: In your opinion, should there be
a Community rule to the effect that there is a period of reflection
following ADR procedures before the agreement is signed or a period
for withdrawal after the signing of the agreement? Should this
question be instead handled within the framework of ethical rules
to which third parties are subject?
Civil & Commercial and Family
94. As we say above, we are not in favour
of Community rules on ADR. In the case of reflection periods,
it seems as though this is an area where differences between sectors
and schemes would make any sort of common rule particularly difficult.
In some fields both parties may have a mutual interest in rapid
enforcement, while in others the complexity of cases may call
for a period to reflect. However, we recognise that there may
be concerns where parties have no legal representation.
95. Rather than a rule we would suggest
some form of guidance. This refers back to our earlier suggestion
that ADR bodies across the Community should share best practice.
Question 18: Is there a need to make ADR agreements
more effective in the Member States? What is the best solution
to the question of recognition and enforcement of ADR agreements
in other Member States of the European Union? Should specific
rules be adopted to render ADR agreements enforceable? If so,
subject to what guarantees?
Civil & Commercial and Family
96. Questions of enforcement or enforceability
of mediated agreements should relate to the position under national
law except where there is international agreement existing which
covers the matter.
97. Within the EC the provisions of the
Brussels I Regulation and of the Convention (as noted in paragraph
87) provide the possibility of enforcement of a mediated agreement
where this is within the nature of an authentic instrument.
98. This is not something which requires
further Community activity but which can be recommended as a solution
in those legal systems where authentic instruments are known.
99. In any event mediated agreements are
usually signed by the parties at the close of mediation and should,
in principle, have the same status as far as enforcement is concerned
as any other such contracts. Therefore, they should be enforceable
on this basis.
Question 19: What initiatives in your view should
the Community institutions take to support the training of third
Civil & Commercial
100. We recognise that confidence in the
quality of ADR services is needed if they are to be widely used
and that training needs to be good. As the Lord Chancellor's 1999
discussion paper on ADR noted, ADR services are still developing
to meet user needs, so it will be particularly important that
any form of supervision or regulation does not stifle innovation
and competition. Our view at present is that existing quality
assurance mechanisms in the UK are adequate; they include, for
example, the Chartered Institute of Arbitrators Guidelines and
Code of Ethical Conduct, the criteria of the British and Irish
Ombudsman Association and the codes of conduct of organisations
such as CEDR and Mediation UK.
101. We would, therefore, suggest that initiatives
should be confined to those that support the mutual recognition
of training, such as encouraging shared practice.
102. See response to Question 14 above.
Question 20: Should support be given to initiatives
to establish minimum training criteria with a view to the accreditation
of third parties?
Civil & Commercial and Family
104. Establishing minimum training criteria
will go a long way towards providing quality assurance for users.
A comparable initiative is currently being developed in England
105. The Legal Services Commission (the
organisation responsible for the administration of public funding
for legal services in England & Wales) is developing a Community
Legal Service Quality Mark for Community and Family mediators.
The aim of the CLS Quality Mark is to ensure that there is a minimum
standard that is followed by all Quality Mark accredited organisations.
One of the major benefits is that the quality mark will provide
organisations with a facility to give a high level of confidence
to their clients. The public will eventually recognise the Quality
Mark logo and will know that, where it is displayed, the service
they are using is one they can trust to provide the service they
require. The Quality Mark itself will cover such areas as: access
to services; people management; running the organisation and commitment
to quality. It also includes a training element.
Question 21: Should special rules be adopted with
regard to the liability of third parties? If so, which rules?
What role should ethical codes play in this field?
Civil & Commercial
107. We do not consider that it would be
necessary to adopt special rules. Any professional (whether or
not they are lawyers) will hold Professional Liability Insurance
which will include acting as a third party. In any event most
ADR providers have established complaints procedures. Information
on the insurance by way of professional indemnity and complaints
procedures should be made available. The existence of a complaints
procedure is one of the elements of the quality mark referred
to in the answer to question 20 above.
108. In family mediation in England &
Wales this is a matter for the independent, self-regulated profession.
109. The UK welcomes the Commission's Green
Paper on ADR and considers that it has correctly identified the
issues that need to be addressed. However, we would urge the Commission
to be cautious before attempting to introduce regulation for ADR.
Regulation would stifle the very aspects of ADR that make it such
a valuable part of the civil justice systemits flexibility
110. Instead, we suggest that the Commission
should, as the Green Paper suggests at paragraph 57, concentrate
on initiatives that encourage best practice and facilitate the
use of ADR in civil disputes in cross border matters only.
MONITORING THE EFFECTIVENESS OF THE GOVERNMENT'S
COMMITMENT TO USING ALTERNATIVE DISPUTE RESOLUTION
The aim of this report is to evaluate the progress
Government Departments and Agencies have made in implementing
the ADR pledge, which was announced by the Lord Chancellor in
Under the terms of the ADR Pledge, all Government
Departments and Agencies have made the following commitments:
Alternative Dispute Resolution will
be considered and used in all suitable cases wherever the other
party accepts it.
In future, Departments will provide
appropriate clauses in their standard procurement contracts on
the use of ADR techniques to settle their disputes. The precise
method of settlement would be tailored to the details of individual
Central Government will produce procurement
guidance on the different options available for ADR in Government
disputes and how they might be best deployed in different circumstances.
This will spread best practice and ensure consistency across Government.
Departments will improve flexibility
in reaching agreement on financial compensation, including using
an independent assessment of a possible settlement figure.
Government Departments will put in
place performance measures to monitor the effectiveness of this
The information submitted to the Lord Chancellor's
Department shows that the number of Government disputes in the
financial year 2001-02 where a method of dispute resolution has
been used or attempted is 49.
Whilst this appears a somewhat disappointing
figure, it must be remembered that it would be too ambitious to
expect the first year to provide anything more than a baseline
that can be used, over time, to give a feel for the volume of
disputes that are settled by ADR. Over time, however, these annual
returns will demonstrate whether the level of ADR use has increased,
remained stable, or decreased.
Although outside the period of the report, it
is also worth mentioning that the Ministry of Defence (MoD) has
recently reached an agreement over the claims of Kenyan tribes
people bereaved or injured by British Army explosives left on
their land. This issue has been in dispute for two years, but
now, following a two day mediation in London, the MoD has agreed
to pay, on limited liability, a £4.5 million settlement.
That said, the information received this year
already demonstrates that the ADR Pledge is taken very seriously.
Many Departments have embarked on progressive steps to implement
training programmes to ensure that ADR is a fundamental part of
their dispute handling process.
The Treasury Solicitor's Department has set
a target that by 2002-03 all case workers within its litigation
Division will have had mediation awareness training. The Head
of Litigation has personally attended a training course for mediators
and some case workers will also receive mediation skills training.
One of the senior lawyers from the Department
of Transport Local Government and the Regions (before the reorganisation
of responsibilities in May 2002, and now from the Office of the
Deputy Prime Minister) has undertaken the necessary training to
become a mediator herself. Her aim is to use this training, and
experience of acting as a mediator on a pro bono basis,
to inform the development of policy and the handling of Departmental
business. Training is also being arranged for the Department's
legal group as a whole.
During the year the Department for Work and
Pensions and Department of Health lawyers, including all their
litigation lawyers, have also received awareness training.
The Home Office has set up a pilot mediation
scheme within the Prison Service's Eastern area. The scheme will
deal with certain personal injury disputes and will operate with
the assistance and support of the Treasury Solicitor's Department.
Departments are also encouraged to provide anecdotal
information about costs savings as a result of using ADR.
The Department of Transport, Local Government
and the Regions (before the reorganisation of responsibilities
in May 2002) reported success in at least one substantial case,
where the claim was settled at much lower cost than would otherwise
have been incurred.
The Treasury Solicitor's Department has estimated
an overall saving of legal costs of £2.5 million, through
the use of ADR.
There have been a number of initiatives introduced
as a direct result of the ADR Pledge.
The Office of Government Commerce, with the assistance
of the Lord Chancellor's Department, the Department of Trade of
Industry and the Centre for Effective Dispute Resolution, published
new guidance on dispute resolution in April. The new guidance
places fresh emphasis on the importance of forward planning and
seeks to put into effect sound dispute avoidance and dispute management
practices. It contains the full text of the pledge, identifies
the distinguishing features of both non-binding and binding ADR
techniques and provides model clauses for incorporating different
methods of dispute resolution at the time a contract is agreed.
Several hundred hard copies of the guidance have
been distributed and 405 hits were recorded on the text on the
OGC website in June at www.ogc.gov.uk/sdtoolkit/library/generic_guidance/dispute.pdf
Conference for Government Lawyers
LCD hosted a conference for Government Lawyers
on 21 November with the aim of promoting the use of ADR. The Lord
Chancellor and the Attorney General addressed the conference,
which also included presentations from ADR providers, a leading
barrister and several Government lawyers on their experiences
of using ADR methods.
The conference generated a great deal of enthusiasm
and was successful in achieving its aim of encouraging Government
Departments to understand the benefits of ADR. A small number
of delegates have already arranged to undergo training as mediators
and a number of the speakers have been invited to assist with
various Departmental training programmes.
Government Legal Service ADR Sub-Group
Following the conference in November an ADR Sub-Group
of the Government Legal Service Liaison Group has been set up.
The aim of this group is to identify the issues that need to be
tackled and to distinguish suitable cases where ADR can be used.
National Health Service Litigation
The encouragement of greater use of mediation,
and other forms of alternative dispute resolution, is one of the
options considered by the NHSLA, who are responsible for handling
clinical negligence claims made against the NHS. The NHSLA is
working with the Legal Services Commission to develop joint strategy
for promoting greater use of mediation as an alternative to litigation
in clinical negligence disputes.
Since May 2000 the NHSLA has been requiring solicitors
representing NHS bodies in such claims to offer mediation in appropriate
cases, and to provide clear reasons to the authority if a case
is considered inappropriate.
In June 2000, the authority began an initiative
to encourage the use of mediation to resolve all suitable cases;
77 offers for mediation had been accepted and at the end of April
2002, 32 had been mediated, 31 successfully.
Letter from the Chairman to the Rt Hon
Baroness Scotland of Asthal QC, Parliamentary Secretary, Lord
Thank you for your letter of 1 November enclosing
a copy of the Government's response to the Commission's Green
Paper. This was considered by Sub-Committee E (Law and Institutions)
at its meeting on 20 November.
We fully support the approach being taken by
the Government. There should be no unnecessary regulation of ADR,
whether at national or European level. As regards the latter,
we urge the Government to seek to ensure that any action at Union
level respects the principle of subsidiarity and is limited to
cross-border cases. We would not expect the Commission to do anything
more than look at ways to encourage the use of ADR in cross-border
cases and to support the mutual recognition of training.
The Committee decided to clear the document
from scrutiny. I should be grateful if you would keep us informed
23 The Chartered Institute of Arbitrators has responsibility
for promoting and facilitating the determination of disputes by
arbitration and ADR, including mediation and adjudication. It
has 10,000 members in 89 countries, and is committed to upholding
standards in arbitration and mediation. Its series of examinations,
training programmes, workshops and stringent criteria aim to ensure
that members designated as "Chartered Arbitrator" are
operating at the very highest professional standards. Back