Civil Justice since the Woolf reforms – how useful is ADR?

Hazel Genn has produced some interesting statistics on civil justice and alternative dispute resolution in England. These observations were made at a seminar in January 2005 for the Scottish Consumer Council, and refer to as yet unpublished research for the Department of Consumer Affairs (DCA).

The pre-Woolf civil landscape

It is difficult to compare the pre-Woolf and post-Woolf civil landscape without baseline statistics. As yet unpublished research for the DCA on the pre-Woolf litigation landscape (pre-1999) demonstrates that:

  • 50% – 83% of defended cases in the county courts were personal injury (PI) claims
  • overall at least 75% of cases were within the small claims or fast track financial limit; in most courts this figure was 85% or more
  • the higher the value of the claim, the more likely both sides were to have legal representation
  • PI cases had high settlement rates and a small number of trials. Non-PI cases had a higher proportion of trials, and a much higher proportion of cases withdrawn. Debt cases were most likely to end in trial (38%) and in all of those the claimant succeeded. In 96% of all cases going to trial the claimant was successful
  • In all types of cases 50% of awards or settlements were for £1,000 – £5,000, and a further 25% – 33% were for £5,000 – £10,000. Costs in non-PI cases were relatively modest, and in PI cases around 50% had costs of £2,000 or less, 24% had over £4,000.

The impact of the Woolf reforms

Lord Woolf’s approach to reform was to encourage the early settlement of disputes through a combination of pre-action protocols, active case management by the courts, and cost penalties for parties who unreasonably refused to attempt negotiation or consider ADR. Such evidence as there is indicates that the Woolf reforms are working, to the extent that pre-action protocols are promoting settlement before application is made to the court; most cases are settling earlier, and fewer cases are settling at the door of the court. In fact, most cases are now settled without a hearing. However, costs have increased, or have at least been front-loaded. In particular, in cases where mediation has been attempted and agreement has not been reached, costs are clearly higher for the parties.

The role of ADR

Despite the encouragement of pre-action protocols, civil procedure rules, and the Funding Code, the use of ADR has not increased in the way that was anticipated. The voluntary pilot mediation scheme at the Central London County Court (CLCC) only had a take-up rate of 4% before 1999. Between 1999 and 2003, when the effect of the Woolf reforms was beginning to be felt, there was an increase in the take-up of this scheme, but a decrease in settlement rates from 62% to 40%. Hazel Genn hypothesises that the Woolf reforms have led parties to mediate in order to avoid cost penalties, and in order to appear to cooperate with judicial direction, but they may be only “half-hearted” in their attempt to negotiate a settlement. Reasons given by both lawyers and parties involved supports this theory; this emerges from research which she has conducted for the DCA on the CLCC scheme, which is so far unpublished.

Automatic Referral to Mediation

An Automatic Referral to Mediation Scheme (ARMS) is now being piloted at CLCC; the pilot scheme began in March 2004. Details were given in the ADR Update no 12 (June 2004). In this scheme 100 cases a month are randomly assigned to mediation rather than a hearing, and parties who do not want to participate in mediation must justify their decision to a judge. Evidence from Hazel Genn’s research on this pilot for the DCA (as yet unpublished) indicates that 80% of cases have sought to opt out from mediation, although the proportion of cases in which both parties opt out is higher among personal injury cases than among other cases. Of 689 cases automatically referred to mediation between May and October 2004, only 53 mediations have taken place. However, of those that agreed to mediate, the success rate is 66%. In the majority of cases legal advisers are advising clients against using mediation.

Any conclusions?

These observations were made during a seminar given by Hazel Genn for the Scottish Consumer Council (SCC) on January 19th 2005. The SCC is leading a project, funded by the Nuffield Foundation, to consider the reform of civil justice in Scotland. They have arranged a series of seminars to explore different aspects of how civil justice operates. Hazel Genn’s seminar considered the effect of Lord Woolf’s Access to Justice report on the civil justice system in England, and considered the implications for reform in Scotland. She is conducting various research projects for the Department for Constitutional Affairs (DCA) which have not yet been published, and used figures from these projects to illustrate her observations.

She concludes that in England pre-action protocols have influenced pre-issue dispute resolution behaviour, in that more cases are being resolved before an application is made to court. Cases that are not settled at an early stage are moving more rapidly through court procedures.

ADR, and mediation in particular, is being promoted by the government as an alternative to court in England. However, despite this promotion, mediation is not a particularly popular option, nor is it necessarily a cheaper option. When court-based mediation schemes are no longer offered at low cost by mediation providers, they are even less likely to attract more users.

She suggests that mediation and other ADR options can only be a supplement to traditional settlement processes, not a substitute for them. If ADR is to be encouraged, it should be as part of a “flexible and proportionate dispute resolution landscape”.

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