ENGLAND & WALES Law and Practice Contributed by: Damian Taylor, Olga Ladrowska, Christy Conlon and Nathan Barrow, Slaughter and May
12.2 ADR Within the Legal System ADR is typically a voluntary and consensual process agreed between the parties. However, recent devel- opments indicate an important shift in favour of the courts encouraging or, in some cases, ordering par- ties to use ADR to resolve their disputes outside of the courts. The Civil Procedure Rules make clear that litigants should consider the possibility of ADR in every case. For example, the Practice Direction on Pre-Action Conduct and Protocols requires parties to consider whether ADR would be suitable for their dispute and, if required by the court, to provide evidence that ADR has been considered. In addition, with effect from October 2024, the overriding objective of enabling the court to deal with cases justly and at proportionate cost includes “promoting or using alternative dispute resolution”. The court can stay proceedings to enable litigants to pursue ADR and, as of October 2024, the court’s power (previously confirmed in case law) to order litigants to undertake ADR has been codified in the Civil Procedure Rules. The court may also impose costs sanctions on a litigant who unreasonably refus- es to engage in ADR or fails to comply with a court order for ADR, regardless of the outcome of the case. In May 2024, a pilot scheme was introduced to make ADR mandatory in the majority of small money claims valued at up to GBP10,000. 12.3 ADR Institutions England and Wales is home to a number of leading institutions offering and promoting ADR, including: • the Centre for Effective Dispute Resolution (CEDR), which specialises in mediation, conflict manage- ment and ADR services and training; and • the London Court of International Arbitration (LCIA), which is one of the world’s leading interna- tional institutions for the administration of arbitra - tion and other ADR proceedings.
ately) incurred are paid. That means that a successful litigant will never recover all of its costs; in practice, it is very unusual for a litigant to recover more than 70% of its costs. 11.2 Factors Considered When Awarding Costs In awarding costs, the court will consider factors such as the conduct of the litigants and their compliance with the overriding objective (ie, the rule that cases should be dealt with justly and at proportionate cost). Serious non-compliance can result in an adverse costs order, regardless of who actually wins the case. In addition, in most cases, the court will assess the proportionality of the costs incurred in relation to the value of the case when deciding whether those costs should be reimbursed by the other litigant. In every case, the court will only order that costs that were reasonably incurred will be paid. 11.3 Interest Awarded on Costs Interest on judgments for costs accrues from the date the judgment for costs is given until it is paid, at the rate of interest set by the court. The statutory interest rate for post-judgment interest is 8% per annum. 12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country ADR is increasingly popular as it can be a more effi- cient and cost-effective way for parties to resolve their disputes than pursuing court proceedings. A variety of different ADR mechanisms are available to parties to suit their circumstances, including: • non-binding ADR without the intervention of a third party (eg, negotiation); • non-binding ADR facilitated by a third party (eg, mediation); and • binding ADR, where a decision is imposed by a third party (eg, expert determination and adjudica- tion). For information on arbitration, see 13. Arbitration .
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