At ProMediate we have long advocated introducing mediation early in the dispute process and mediating housing cases, including disrepair and landlord and tenant.
On 5th March 2020, JUSTICE launched its latest working party report, Solving Housing Disputes, chaired by Andrew Arden QC. It recommends embedding ADR into the system.
In the section on ADR it states that:
“Notwithstanding its expansion across the justice system and agreed benefits, The uptake of ADR in housing disputes remains unreasonably low. This section of the report explores how that might be changed. It takes a broad view of ADR, as including negotiation, mediation and early neutral evaluation. Quite some time is spent on consideration of pre-action ADR, engagement and negotiation, which is where a huge amount of work is currently done.
Pre-action engagement
Pre-action protocols were introduced by the Woolf Reforms to “build on and increase the benefits of early, but well-informed settlements which genuine satisfy both parties to a dispute.
However, the introduction of the protocols long pre-dated austerity and legal aid cuts and our evidence gathering revealed current problems with the protocols in housing disputes.
First, protocols can be complex, notwithstanding that disputes themselves are not always complex, or worth a significant amount in damages.
They also pre-suppose the availability of legal advice and assistance before commencing a
claim. For many claimants, whether in disrepair or possession claims, this assumption no longer holds. More could be done to simplify the protocols…”
“Claimants are required to notify prospective defendants of their claim and parties are expected to meaningfully exchange information to see whether disputes can be resolved without proceedings ‘Practice Direction – Pre-action conduct and protocols’, available at https://www.justice.gov.uk/courts/procedure- rules/civil/rules/pd_pre-action_conduct
The report recommends:
1. The Civil Procedure Rule Committee revisit pre-action protocols for housing disputes, with view to simplifying them and making them more user friendly for both practitioners and the significant number of people who come before the courts without housing advice and representation.
A second issue is accountability for pre-action requirements. The pre-action protocols for social housing and mortgage possession claims encourage parties should be revisited for clarity and accessibility for non-lawyers. social housing possession,for example, do not require a claimant to certify
whether they have actively engaged with the tenant at the pre-action stage….
Justice’s evidence gathering suggests “many social landlords do not engage with tenants at the pre-action stage, meaningfully or at all. While we understand that, historically, social housing providers employed housing officers to work with tenants on the drivers of rent arrears at the pre-action stage, resourcing is such that they are increasingly disposed towards dedicating resources to income recovery and using the County Court process as a mechanism to secure rent arrears repayment. Notwithstanding, it should be remembered that the court is a mechanism of last resort. It is incumbent on housing providers to engage meaningfully with tenants to resolve underlying problems, such as debt or benefits, before initiating a claim. Housing providers should be required to detail those pre-action endeavours when making a possession claim. We think the best way to ensure this material comes before a judge is to ensure pre-action engagement is clearly indicated on any claim form. We recommend all court claim forms for possession which involve pre-action negotiation be strengthened to require applicants to adduce evidence or include details as to how they have engaged with the pre-action protocol requirement to work with a tenant or borrower to resolve the issues giving rise to the prospect of repossession.”
In the authors’ view, legal “developments are an opportunity to fundamentally reconsider how private landlords and tenants engage before a possession claim is initiated.
The pre-action protocol for social possession cases requires a housing provider to make good faith inquiries as to why, for example, a tenant is falling into arrears. The premise is good faith dialogue, and constructive discussion on the issues giving rise to problems in the tenancy. In our view, the desire to establish longer term, more sustainable relationships between tenant and landlord in the sector should inspire similar dialogue between private landlords and tenants before possession claims are initiated. The reform of statutory grounds for possession presents an opportunity to require that activity in pre-litigation behaviour. One way to do so would be the introduction of a simple pre-action protocol for private possession claims, designed with the needs of non-legally represented landlords in mind. This might be a protocol that amounts to a checklist, with a list of actions a landlord is required to carry out before initiating proceedings. These could include:
• a requirement to contact the tenant to find out what the cause of rent arrears is;
• a requirement to negotiate with the tenant to secure repayment; and/or
• issuing an email or letter demand for repayment within a specified
timeframe.
That protocol could be issued to a tenant with the bundle of documents issued at the commencement of a tenancy, explaining the steps a landlord would have to go through before they can attempt possession. Alternatively, prior to initiating a claim, private landlords could potentially be required to engage with the problem-solving requirements set out in the social possession protocol.
2. The authors recommend that the Civil Procedures Rules Committee (CPRC) should consider whether a simple, easy to follow pre-action protocol for private possession claims should be established as part of reforms under the Rented Homes Bill. That pre-action protocol would capture the spirit of the social housing possession pre-action protocol and encourage landlords
The Working Party was also “concerned that particular attention should be paid prior to enforcement of a charging order as to the individual circumstances of tenants and family members should the sale of the property be requested. In particular, the desire must be to minimise any hardship for those living in the house caused by the sale. “
3. “For that reason, we recommend the establishment of pre-action requirements before an application for enforcement of a charging order is brought. Those requirements, whether under protocol or otherwise, should require a creditor to engage proactively with the debtor and those in the household, to assess whether enforcement will bring hardship and if so, to contact local authorities for assistance.
Pre-action ADR
“The 2015 Civil Court User Survey included questioning around action conducted before a claim. 40% of participants said they had not considered mediation prior to the claim and only 28% of respondents indicated that they took up mediation before starting a claim”
“Ministry of Justice, ‘Civil Court User Survey’, Findings from a postal survey of individual claimants and profiling of business claimants’, (MOJ Analytical Series, 2015) Table 6.2 available at https://assets.publishing.service.gov.uk/governme nt/uploads/system/uploads/attachment_data/file/472483/civil-court-user-survey.pdf)
According to the Report “The absence of legal advice and representation from pre-action ADR stymies uptake. In family disputes, the withdrawal of legal aid and lack of contact with solicitors at an early stage caused a drop in the uptake of family mediation, which risks parties entering ADR at a pre-action stage without an appraisal of their true position, with a consequent risk of under-settling.
The Report’s authors say that “changing the definition of “legal help” to capture advising and engaging with ADR at the pre-action stage is crucial to uptake and efficacy, and should be available to encourage ADR as early as possible in the process. “
4. We recommend that the definition of “legal help” under legal aid contracting for housing should be changed to capture and remunerate acting and advising through pre-action ADR processes.
While the removal of practical obstacles to pre-action ADR uptake should improve the position, the biggest issue is that there is no coherent, structured method for uptake of pre-action ADR in most housing disputes.
“Solicitors on our Working Party explained that pre-action ADR is applied on an ad hoc basis, generally at the initiation of the wealthier party, as those who are legally aided are not funded to pay for pre-action ADR, nor act for parties through that process.
This lack of structure can be contrasted, for example, with that which is available for low value personal injury claims in road traffic accidents.
The Civil Justice Council has identified lack
of knowledge about ADR as an issue and recommended the establishment of an ADR portal or landing page that offers subject-specific and accredited ADR
The Civil Justice Council has recommended the establishment of a new mediation/ADR website called “alternatives”, which would describe the various forms of ADR available, illustrate each by video and indicate how quality guaranteed ADR providers could be accessed, Civil Justice Council, ‘ADR and Civil Justice: Final Report’, November 2018, para 6.11 available at https://www.judiciary.uk/wp- content/uploads/2018/12/CJC-ADR-Report-FINAL-Dec-2018.pdf
Expanding, for instance, on what is currently offered by the Civil Mediation Council, which offers “Civil & Commercial” and “Workplace” mediation at https://civilmediation.org/mediator-search/
We understand that the Civil Justice Council has recently convened a judicial liaison group to look broadly at the positioning of ADR within the civil justice system.
There is a need for any work on ADR in civil justice to consider its role at the pre-action stage.
5. The report recommends that “the Civil Justice Council consider how awareness of and uptake of ADR at the pre-action stage in housing disputes can be promoted and encouraged. Consideration ought to be given as to how court mediation services can be properly funded to allow them to reach their full potential, including the need for mediation and other ADR types to be made more widely available to the parties at the pre-action stage.”
The general position in civil disputes is that the losing party bears the winning party’s costs of litigation, subject to certain qualifications. In deciding costs orders, the court must have regard to the conduct of the parties during the litigation, including compliance with relevant pre-action protocols or practice directions and should not allow costs that are unreasonably incurred, Unreasonable conduct and can result in costs sanctions.(CPR 44.3(2)(a).)
The Court of Appeal decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 sets out a list of factors relevant when deciding whether a refusal to mediate is unreasonable, including (a) the nature of the dispute (b) the merits of the case (c) the extent to which other settlement methods have been attempted; (d) whether the costs of the ADR would be disproportionately high; (e) whether any delay in setting up and attending the ADR would have been prejudicial; and (f) whether the ADR had a reasonable prospect of success. The recent report from the Civil Justice Council on ADR and civil justice criticised these “Halsey Guidelines” as too generous to parties and recommended the circumstances where a refusal to mediate is permissible ought to be narrowed,
The implications of a failure to engage in ADR arises at the conclusion of litigation at the costs assessment stage. Arguably, this is too late. The Civil
Justice Council has suggested that there could be a form of interim sanction available to express disapproval of a refusal or failure to mediate by parties at the interim stage…, to encourage engagement in ADR as early as possible. We agree with this proposal, subject to the caveat that sanctions at an interim stage can only be introduced if pre-action ADR is meaningful and practical obstacles to engagement, which we have outlined above, are removed. Specialist providers must be widely available and accessible, it must be more prominently positioned in the dispute resolution process, and publicly funded advice and representation should be available.
6. We recommend that, subject to there being an appropriate level of funding for ADR providers and practitioners at the pre- action stage, the Civil Procedure Rule Committee should consider whether costs sanctions for failure to engage with ADR pre-action ought to be introduced earlier in the case management process.
The intention is to influence parties’ behaviour earlier in the court and tribunal process.
Procedural processes within the courts and tribunals contain certain “nudges” or encouragement towards ADR.
The FTT (PC) sends out mediation flyers to
parties early in the process, and after an initial case management hearing, case which asks an array of questions relevant for case management. The flyers explain the advantages of mediation under various sub-headings; “cost-effective”, “quick”, “private”, “win/win”, “positive relationships”. The agreement to mediate forms explains the benefits of mediation, and how it works in the tribunal, before offering parties a tick box, to express whether they want to participate in mediation or not. If the parties accept, mediation is offered by the FTT (PC) itself, as opposed to by an external provider.
The directions questionnaire sent depends on which “track” the case is in, which is governed by damages claimed. Claims under £10,000 are sent the small claims directions questionnaire, the N180 form, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachm ent_data/file/856374/n180-eng.pdf
Fast and multi-track claims are sent the N181 form, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/8563 74/n180-eng.pdf
Questions are included regarding compliance with the relevant pre-action protocol, endeavours to settle, experts needed and case management arrangements.
officers send out a lengthier “agreement to mediate form”.
The Small Claims Track Questionnaire alerts parties to the availability of mediation through a free, one-hour appointment with the Government-run Small
Claims Mediation Service (SCMS)220 and offers parties a “Yes” or “No” tick box to the question of whether they agree to the case being referred to the SCMS.
Conversely, the directions questionnaire for the fast and multi-track invites parties to consider a 1 month stay to pursue the prospect of settlement through
an array of ADR type strategies, which includes signposting parties to external mediation providers accredited by the Civil Mediation Council.
The report suggests that “parties across all claim tracks should engage with the question of whether mediation is suitable for their case. A directions questionnaire that does not require parties to articulate why their claim is not suitable for mediation is likely to see the option disregarded by parties. Assistance for parties could be derived from a list of non-exhaustive reasons as to why mediation might not be appropriate, such as urgency, third party interests, etc. The point is to emphasise that in most cases, and particularly where the housing relationship is ongoing beyond the dispute, the matter is likely to be suitable for mediation, or another form of ADR.
7. The report’s authors “recommend the directions questionnaire for all tracks should require parties to state the reasons why they do not wish to pursue ADR. The questionnaires could include a non-exhaustive list of potentially acceptable reasons as to why certain types of disputes may not be suitable for ADR, which implicitly makes clear that most disputes are suitable for ADR.
Practitioners on our Working Party expressed the view that the stay initiated when parties pursue mediation in the fast and multi-track can be a disincentive to uptake, as some in the profession continue to view mediation as a necessary hurdle or tool for delay before continuing to court-based adjudication.
Form N181 contains an embedded link to an external provider, the Civil Mediation Council. If parties do not elect to try and settle at the directions questionnaire stage, they are asked to state the reasons why they consider it inappropriate to settle at this stage. The Civil Justice Council report on ADR described that even where parties “gave wholly inadequate reasons in the N181 for not using ADR and seeking a stay”, judges were spending most of their limited judicial time at the interim stage on costs budgeting, and were spending comparatively little time interrogating compliance with ADR.”
“In our view, ADR is most effective where the prospect of court-based adjudication looms over it. Allowing a stay on proceedings risks parties failing to engage with ADR on a good faith basis. As an alternative, should parties wish to engage in mediation outside of the court process, a judge (or in the future, authorised court or tribunal staff member) should look to set down a case management timetable in advance, which sets out timetabling and deadlines, should the ADR process be unsuccessful. The approach must be one where ADR is part of an active approach which case manages a dispute to resolution.
We recommend that the Civil Procedure Rule Committee should review whether a stay for mediation disincentivises its use, and whether mediation should be ordered as part of case management timetabling with subsequent filing and case management dates post-mediation.
Consideration ought also to be given to how active case management can ensure parties engage with the mediation and any subsequent deadlines.
The standard direction for disrepair and multi-track cases provides includes that “at all stages the parties must consider settling this litigation by any means of
Alternative Dispute Resolution (including Mediation)” and that parties “not engaging [with] means proposed by another must serve a witness statement
giving reasons within 21 days of that proposal which would be shown to the trial udge should the questions of costs arise.”
Conversely, the standard direction for the small claims track contains no reference to ADR.
The report suggests that “unless courts and tribunals perceive mediation or ADR as a normal step in the dispute resolution process, it is liable to be marginalised. One way to ensure the take-up of mediation is at the forefront of judicial case management is to include a stronger coercion within procedure rules.”
8. The Justice Working party recommends “that both the Civil Procedure Rule Committee and the Tribunal Procedure Committee should review all standard directions which involve housing disputes to include a presumption for parties to engage in ADR.”
We understand that a further structural impediment to legally aided parties engaging is that prior authority must be obtained from the Legal Aid Agency to advise and act for a clients through ADR in the court process.
If ADR is to be normalised in housing disputes and parties are to be encouraged to resolve disputes early and at proportionate cost, practical obstacles to uptake must be removed. This includes reducing the procedural steps a practitioner must complete to engage in a process the justice system is otherwise seeking to encourage.
8. We recommend legal aid practitioners should not have to obtain prior authority from the Legal Aid Agency to engage in ADR but should be free to pursue it as part of an ordinary legal aid certificate.
Stronger compulsion to ADR
The historic position in England and Wales has been that court-ordered mediation, without party consent, constitutes a likely violation of the right to a
fair trial under Article 6 ECHR. This approach was on the basis that mandatory mediation strips the mechanism of its voluntary character, said to be the hallmark of effective ADR.
In August 2019, the Court of Appeal in Lomax (Lomax v Lomax [2019] EWCA Civ 1467. 77) held that CPR 3.1(2)(m), which refers to a court’s powers as including “hearing an Early Neutral Evaluation (“ENE”)”, allowed for a court to order ENE without party consent. Halsey did not apply, on the basis that the relevant section of the CPR dealt with an ENE process which can assist with the fair and sensible resolution of cases.”
hearing as part of the court process,
and so it was permissible.
The position has been entrenched since the Court of Appeal decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576. Lord Dyson remarked that “to oblige truly unwilling parties to refer their disputes to mediation would impose an unacceptable obstruction on their right of access to the court” para 9. Subsequent developments have softened that position.
Article 5(2) of the 2008 European Mediation Directive explicitly permits the use of mandatory mediation. In 2010, the Court of Justice of the European Union ruled in Alassini and Others, Joined Cases C-317/08, C-318/08, C-319/08 and C-320/08 that an Italian law requiring an attempt to reach an out-of-court settlement within 30 days before a dispute could be heard by the court was not a fetter on the right to a fair trial under article 6.
Mandatory mechanisms were said to be compliant, so long as the procedure is not binding, does not cause delays, suspends the limitation period on a claim and that interim measures are available in certain circumstances. Domestically, in September 2019 the Online Civil Money Claims service commenced piloting “opt-out” mediation for defended claims of less than £300 (extended to defended claims of less than £500 in December 2019) where parties participate in mediation unless they actively elect to remove themselves from it.
Elsewhere in the civil justice system, processes that have traditionally been called “ADR” have become normalised and are increasingly the default process
for disputes where there is a need to maintain ongoing relationships between the parties. The 2011 Family Justice Review recommended that mediation or an
alternate out of court mediation service be the first port of call for divorcing couples.
On one argument, Lomax represents no great diversion from Halsey, as it did not disturb Halsey as it relates to Article 6 compliance when mandating external ADR providers. However, it permits a court to order ADR as part of the court process irrespective of whether the parties’ consent, which is a substantive diversion from the traditional position.
The Government’s desire to abolish no fault eviction and promote longer tenancies sets a framework to try a similar approach in housing disputes, where longer, healthier tenant-landlord relationships could be sustained through the normalised use of ADR techniques in court and tribunal processes.
In those circumstances, we ask whether all courts and tribunals dealing with housing disputes should have ADR as the first port of call within the dispute resolution pathway and be empowered to order non-consenting parties to engage with an ADR process. Uptake of ADR generally remains tethered to party consent,
We recommend that ADR be more strongly encouraged by amending the procedural rules which apply to the current housing disputes system. Rules committees for the civil courts and First-tier Tribunal ought to consider how the rules could more strongly favour a presumption of or direction to ADR before any formal, adjudicative process takes place. If those rules change, tribunal and court case workers and/or judges should be able to direct parties to engage in all forms of ADR, including in circumstances where parties do not consent.”
To quote:
Too many people in England and Wales find it difficult to enforce access to housing or other housing rights. Over the past decade, homelessness has more than doubled and early legal advice and intervention to address housing problems, homelessness and associated or underlying issues has been greatly attenuated by cuts to civil legal aid. This has caused large parts of the housing advice sector to collapse, resulting in “advice deserts”, while local authorities are struggling under the demand for homelessness assistance. Beyond this context, housing dispute resolution suffers from disaggregation: there are too many places a person might go to resolve a dispute, with adversarial processes that can be difficult to access, navigate and understand for lay people. There is also lack of coherence in regulatory application and oversight and a need for greater emphasis on early resolution and conciliatory measures.
This Working Party reviewed the current system and presented proposals to create a more unified and accessible housing dispute system. Key to our recommendations are greater coherence, access to legal advice and information, and conciliatory methods to resolve disputes.
The report features 54 recommendations and is set out in two parts, making the case:
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First, for a future model of dispute resolution, the Housing Dispute Service (HDS)
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Second, irrespective of whether the HDS is introduced, for essential reforms to the current system.
The HDS would be an entirely new and distinct model for dispute resolution. It would fuse elements of problem-solving, investigative, holistic and mediative models utilised elsewhere in the justice system. The proposal offers a new approach premised not just on dealing with individual disputes, but rather on remedying underlying issues that give rise to housing claims and sustaining tenant-landlord relationships beyond the life of the dispute. We propose that should the HDS take off beyond a pilot phase, it would be a national service funded by subscription from housing providers.
However, the proposal for a fully formed HDS is bold, ambitious and will require significant time and investment. It will have to be tested and rigorously evaluated through a pilot phase. If the pilot shows positive results, in the longer term the HDS will need to be integrated with and replace elements of the current system.
The HDS is not an idea accepted by all our members and was opposed by the tenant lawyers we consulted. It is controversial and for many, the solution to current problems is to remedy austerity era policies. Nevertheless, the majority of the Working Party consider that the HDS could offer a better outcome for all parties to housing disputes than the current system and is worth exploring…
The second part to this report sets out recommendations which we consider necessary to improve access to and navigation through the current system. Building upon the Government’s proposed Housing Complaints Resolution Service, these promote improvements in:
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access to early legal help, making use of the Government’s Legal Action Plan;
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more accessible court and tribunal architecture through a single point of entry for all types of housing dispute;
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changes to how local authorities deal with people facing homelessness, to ensure people can access assistance in times of need; and
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assisted online services and, where face-to-face alternatives are needed for people who cannot engage online, flexible deployment of physical hearing venues so that people can reach the courts and tribunals that will decide upon whether they can keep their home.
Once proceedings commence, our proposals are for:
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alternative dispute resolution to be embedded pre-action and more strongly encouraged throughout the court and tribunal process;
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case management to engage case workers who can assist in the triaging of disputes to the correct resolution method; and
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cross-ticketed, specialist housing judges who can sit for both court and tribunal jurisdictions.