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Lomax v Lomax

Parties to litigation have long been encouraged to consider Alternative Dispute Resolution as a means to resolve disputes more quickly and cheaply.  Mediation is often promoted, against the risk of sanctions in costs if a party unreasonably refuses to mediate, but the courts have so far stopped short of compelling parties to mediate (save where there is a pre-existing agreement between the parties to do so).  However, in Lomax v Lomax, the Court of Appeal considered whether parties to litigation can be compelled, against their will, to engage in Early Neutral Evaluation (“ENE”).

ENE is a process led by an independent third party (engaged via the court, or privately) who considers the facts, law and evidence and provides an opinion on the merits.  ENE provides only a provisional view on the legal issues and the strength of the evidence but, as an early stage process, it can be extremely useful especially where the parties have very different views on the likely outcome.  By agreement between the parties, ENE can produce a binding outcome to a dispute.  However, even if not binding, the ENE will naturally inform the settlement process.

Under CPR 3.1(2)(m) the Court has the power to “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case”.  

Lomax was a contentious probate dispute, which the first instance judge identified as one which “cries, indeed screams out, for a robust judge-led process to focus on the legal and factual issues…and perhaps even craft a proposed solution for the parties to consider”.  However, Parker J did not consider she had the power to compel parties to engage in ENE against their will.  The Court of Appeal disagreed, and decided that implying a requirement for consent into CPR 3.1(2) was inconsistent with the overriding objective of the Civil Procedure Rules.  As the case would clearly benefit from an ENE hearing, one should be held as soon as possible.

The Lomax decision appears to have raised the profile of ENE with litigants and the courts.  For example, in Telecom Centre (UK) Limited v Thomas Sanderson Limited (2020), Master McCloud provided guidance on how parties may approach the ENE process. 

Insurers should consider, with their legal advisors whether ENE would assist in resolving a dispute.  While it will involve additional costs, if the opposing party is refusing to accept the weakness of (parts of) their case, hearing that message from an authoritative third party could be invaluable.  Insurers should also be aware that, on the back of the Lomax decision, there is speculation that the judiciary may revisit the question of whether litigants can be compelled to mediate.

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