THE COURT CAN ORDER PARTIES TO TAKE PART IN AN EARLY NEUTRAL EVALUATION: COURT OF APPEAL DECISION

I am grateful to barrister Christopher Buckingham for pointing out that the Court of Appeal decision in Lomax v Lomax [2019] EWCA Civ 1467 is now on BAILLI.  The Court of Appeal held that the consent of both parties was not necessary for a matter to be referred to an Early Neutral Evaluation.

“I see no reason to imply into subparagraph (m) any limitation on the court’s power to order an ENE hearing to the effect that the agreement or consent of the parties is required. Indeed, in my view such an interpretation would be inconsistent with elements of the overriding objective, in particular the saving of expense and allotting to cases an appropriate share of the court’s resources, and would, therefore, be contrary to rule 1.2(b).”

THE CASE

The claimant brought an action under the Inheritance (Provision for Family & Dependants) Act 1975. One party sought an Early Neutral Evaluation. The other did not agree. At first instance the judge held that, in the absence of consent from both parties the court did not have power to order a hearing.

THE RULES

The relevant rules are summarised in the judgment.

“Rule 3.1 contains the court’s “general powers of management” and sets out a “list of powers” which are in addition to any other powers the court might have. The list, in subparagraph (2), includes at (m) that the court may “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”.”

THE DECISION IN THE COURT OF APPEAL

The Court of Appeal found that the consent of both parties was not necessary.  Moylan LJ stated:-

1. 1. I start by noting, as referred to above, that the wording of subparagraph (m) does not contain an express requirement for the parties to consent before an ENE hearing is ordered. The question therefore is whether such a limitation is to be implied.

   2. I do not consider that Halsey v Milton Keynes assists with the proper interpretation of subparagraph (m) because it was dealing with a very different situation. It was concerned with whether a court can oblige parties “to submit their disputes to mediation”. It does not, therefore, in my view assist with the interpretation of subparagraph (m), which is dealing with an ENE hearing as part of the court process.

   3. In any event, ENE does not prevent the parties from having their disputes determined by the court if they do not settle their case at or following an ENE hearing. It does not, in any material way, obstruct a party’s access to the court. Insofar as it includes an additional step in the process, this is not in any sense an “unacceptable constraint”, to use the expression from Halsey. In my view, it is a step in the process which can assist with the fair and sensible resolution of cases.

   4. This means that I do not need to enter into the question raised in Wright v Michael Wright Supplies Ltd & Anor [2013] EWCA Civ 234 as to what Halsey determined and the extent to which it remains good law. I would only comment that the court’s engagement with mediation has progressed significantly since Halsey was decided. I also do not consider that Seals and Seals v Williams directly assists. It dealt with the position prior to the express introduction of ENE in subparagraph (m).

   5. As for the Court Guides relied on by Mr Entwistle, whilst they can assist in particular where there is ambiguity, as stated in the White Book at 12-44, p.2898:

“It is clear that the effect of rules and directions cannot be suspended or disapplied by what may be said in Court Guides.”

Equally, the commentary in the White Book as to the effect of subparagraph (m) is not determinative.

1. 1. Looking at the issue more generally, as I have already described, the great value of a judge providing parties with an early neutral evaluation in a case has been very well demonstrated in financial remedy cases. Further, the benefits referred to above have been demonstrated not only in cases where the parties are willing to seek to resolve their dispute by agreement and are, therefore, willing to engage in an FDR. In my experience and that, I would suggest, of every other judge who has been involved in financial remedy cases, the benefits have also been demonstrated frequently in cases in which the parties are resistant or even hostile to the suggestion that their dispute might be resolved by agreement and equally resistant to the listing of an FDR. As Norris J said in Bradley v Heslin [2014] EWHC 3267 (Ch):

“24. I think it is no longer enough to leave the parties the opportunity to mediate and to warn of costs consequences if the opportunity is not taken. In boundary and neighbour disputes the opportunities are not being taken and the warnings are not being heeded, and those embroiled in them need saving from themselves.”

1. Dealing with Mr Entwistle’s second submission, I also do not consider that his analysis of the rules supports the conclusion that consent is to be implied in subparagraph (m). If the intention had been to require the parties to consent, it would have been very easy to make this clear by expressly providing for this. In my view, the absence of any such express requirement is a powerful indication that consent is not required. As I have already indicated, in my view an ENE hearing is not an obstruction to or constraint on a party’s access to the court.

2. I would also suggest, in response to Mr Entwistle’s submission that ordering an ENE is a strange way of helping parties settle a case, that it requires parties to focus on whether a case might be capable of settlement and requires them to hear a judge’s neutral evaluation. It requires them to hear this because the parties can be, and would typically be, ordered to attend the hearing as permitted by rule 3.1(2)(c), because one of the key purposes of such a hearing is for the parties to hear directly the judge’s evaluation of the case. Also, contrary to another of his submissions, based on my experience of FDRs, the result of requiring parties to have such a hearing can and often will be to achieve a great deal, including saving rather than adding to costs.

3. In conclusion, I see no reason to imply into subparagraph (m) any limitation on the court’s power to order an ENE hearing to the effect that the agreement or consent of the parties is required. Indeed, in my view such an interpretation would be inconsistent with elements of the overriding objective, in particular the saving of expense and allotting to cases an appropriate share of the court’s resources, and would, therefore, be contrary to rule 1.2(b). If my Lord and my Lady agree, I propose that the appeal be allowed, and, having regard to Parker J’s clear view that this case would benefit from an ENE hearing, I would propose that the court directs that one be held as soon as possible.