What the compulsory ADR changes mean for litigation from 1 October 2024

So, what’s changed?
New CPR provisions will expressly state that, in appropriate cases, the court may give directions “ordering or encouraging the parties to engage in alternative dispute resolution (ADR)”. Currently, the CPR state that litigation should be a last resort, and parties should consider whether negotiation or other forms of ADR might enable them to settle their dispute without issuing proceedings.

What does this mean for litigation?
• Nothing has really changed under the new rules: good legal advisers have always advised clients to use ADR and will continue to do so.

• ADR is just another tool to achieve your goals: it needs to be viewed as that, and not a “soft option”.

• Timing and preparation are key: ADR should be part of every litigation strategy, but you need to ensure it is deployed at the right point in the process. Our previous update shares some really valuable insight on this topic: When is the right time to settle your commercial dispute? – Greenwoods Legal LLP.

• Have clear aims.  Engage with, and understand, the process and your advisers throughout to secure the maximum benefit.

• Even if ADR fails, it always provides valuable insight into your opponent’s thinking and strategy.  It might also narrow the issues in dispute.  This means it is always worthwhile.  Many claims settle shortly after a failed ADR process, because of the momentum gained.

How we’ve recently successfully used mediation to resolve a long-running dispute
We provided ongoing advice to shareholders in a family-run business following a falling out between the shareholders/family members.  The sale value was in excess of £100m, so the stakes were high.  After several years of pre-action correspondence, the parties agreed to mediate. We helped set up mediation with a threatened application for security for costs, which was listed for shortly after the mediation date (emphasising the importance of proper preparation in ADR and seeing ADR as part of a wider litigation strategy, maximising the prospects of success).

It was a difficult mediation. But after a full day of negotiations, assisted by the mediator, heads of terms were signed which were finalised a few days later.

If you need help resolving a dispute, either at pre-action stage or after proceedings being issued, please get in touch. We’d be delighted to try and help you with a solution.