Enhancing ADR in Family Proceedings: Understanding Recent Rule Changes

Introduction:
The landmark case of Churchill v Merthyr Tidfyl has significantly impacted civil litigation and the integration of Alternative Dispute Resolution (ADR). However, its implications on family proceedings are equally noteworthy. This article delves into the recent changes in ADR rules within family law, highlighting the importance of amicable resolutions, particularly in cases involving children and finances.

Mediation Integration:
Mediation has long been integrated into family proceedings, with divorcing couples mandated to attend a Mediation Information Assessment Meeting (MIAM). To incentivize mediation, the Ministry of Justice (MOJ) has extended schemes, such as offering £500 vouchers per couple. Despite these efforts, domestic abuse remains a significant obstacle to amicable resolutions.

Recent Case Insights:
In a recent high-value divorce case (X [Financial Remedy: Non-Court Dispute Resolution], Re [2024] EWHC 538 (Fam)), Lady Justice Knowles emphasized the importance of ADR in family cases. Drawing parallels with the Churchill case, she advocated for adjournments to facilitate non-court dispute resolution, showcasing the judiciary’s commitment to promoting ADR.

The case concerned a 15-year marriage which came to an end on 7 June 2022 and I respect of which the final hearing was due to take place before her in June 2024. The parties had an 11-year old daughter and as is common, there were separate Children Act proceedings listed for a three-day hearing on 25 March 2024.

The couple had assets of between £27m to £29m. The parties had participated in an FDR in July 2023 which regrettably did not settle their dispute. The parties had never engaged in any form of non-court dispute resolution before issuing either financial remedy or children proceedings. The judge regarded their failure to do so as being “utterly unfathomable.” 

The costs relating to the financial remedy proceedings amounted to £581,000 to date. The projected costs going forward amount to £511,400. Therefore, the total amount spent, if this matter proceeds to a final hearing, would be close to £1.1m. That sum excludes the cost of the children proceedings, which will cost at least another £300,000 on a conservative estimate. Using the lower of the two valuations of the matrimonial assets, those legal fees in total would represent about 5% of the total assets.

Rule Changes and Implications:
Upcoming changes to the Family Procedure Rules 2010 (FPR) effective from April 29, 2024, will bolster the court’s ability to encourage ADR in family proceedings. Notably, amendments will allow courts to promote non-court dispute resolution without requiring parties’ agreement, reinforcing the importance of considering ADR at all stages of proceedings.

She said that:

It may be thought that the decision in Churchill v Merthyr Tydfil is of limited relevance to family proceedings. To make that assumption is unwise. The active case management powers of the CPR mirror the active case management powers in the FPR almost word for word and both the civil and the family court have a long-established right to control their own processes. The settling of cases quickly supports the accessibility, fairness and efficiency of the civil, and I emphasise, the family justice system. As Sir Geoffrey Vos, MR stated in paragraph 59 of Churchill v Merthyr Tydfil:

“…even with initially unwilling parties, mediation can often be successful. Mediation, early neutral evaluation and other means of non-court based dispute resolution are, in general terms, cheaper and quicker than court-based solutions. Whether the court should order or facilitate any particular method … is a matter for the court’s discretion, to which many factors will be relevant.”

Though the FPR rule changes due on 29 April 2024 do not go as far as compelling parties to proceedings to engage in non-court dispute resolution, the agreement of the parties to an adjournment for that purpose will no longer be required. Instead, the family court may – where the timetabling of the proceedings allows sufficient time for these steps to be taken – “encourage” the parties to obtain information and advice about and consider using non-court dispute resolution and “undertake non-court dispute resolution” (rule 3.4(1A) with effect from 29 April 2024). The accompanying Practice Direction 3A has been amended and makes clear that the court may also use its powers to adjourn proceedings to encourage the use of non-court dispute resolution (rule 4.1). In financial remedy cases, the power to encourage even unwilling parties will be reinforced by an amended rule 28.3(7) which will make the failure, without good reason, to engage in non-court dispute resolution a reason to consider departing from the general starting point that there should be no order as to costs. 

Lessons from Civil Litigation:
The parallels between civil and family proceedings underscore the importance of swift resolution through ADR. Referencing the Churchill case, it is evident that ADR promotes accessibility, fairness, and efficiency within the justice system. The judiciary’s discretion in compelling parties to engage in ADR aligns with overarching objectives of settling disputes fairly and at reasonable cost.

Encouraging ADR Participation:
While the new FPR rules do not mandate ADR participation, they empower courts to encourage parties to consider non-court dispute resolution. Failure to engage in ADR without good reason may impact cost sanctions, emphasizing the judiciary’s stance on promoting ADR as a viable alternative to litigation.

Conclusion:
The evolving landscape of family law underscores the significance of ADR in resolving disputes efficiently and amicably. Parties are urged to recognize the benefits of ADR, not only for their emotional and financial well-being but also for the best interests of any children involved. As courts continue to prioritize ADR, it is imperative for legal practitioners and litigants to embrace this shift towards resolving disputes outside the courtroom.