PLC Public Sector reports:
A recent report on the Effective use of mediation by local authorities in judicial review by Nabarro LLP, 39 Essex Street and ADR Group, shows that only 3 per cent of local authority judicial review cases are referred to mediation before court proceedings are issued, despite the fact that paragraph 3 of the Pre-Action Protocol for judicial review requires a letter before claim and an attempt at alternative dispute resolution.
So why is this?
The strict time limits imposed by Rule 54.5(1) of the Civil Procedure Rules 1998 may discourage the parties from using mediation before proceedings commence. An application for permission to apply for judicial review has to be made promptly and in any event not later than three months from the date on which the claim first arose. Even though the court has a discretion under rule 3.1(2)(a) to allow a late claim, the discretion is only exercised in exceptional circumstances. Therefore, the most appropriate time to consider mediation is once permission has been granted and after evidence has been served by both parties rather than before proceedings commence.
Why mediate?
Given that local authorities have finite resources and are under increasing pressure and scrutiny over expenditure, mediation may be a way of achieving effective cost savings both in terms of legal costs and management time. Using mediation as a way of resolving a dispute:
- Should not be seen as evidence of a weak case. It offers a local authority greater control over the outcome since no settlement can be reached without the authority giving its consent. Also, mediation offers other ways to resolve the dispute than those offered by judicial review where the court can only dismiss or allow a claim.
- Mediation is a confidential process so that it allows the parties to engage in a full and frank exchange of views. Greater dialogue means that a claimant’s true motive or objective can be clarified with the possibility of a settlement being facilitated by the mediator.
- Can be arranged in a shorter time frame than court proceedings and therefore may avoid lengthy litigation.
- Means that a local authority may not be on the receiving end of an adverse costs order.
- Has the potential to avoid adverse publicity for a local authority.
Is it always appropriate?
However, the report indicates that some of those local authorities which responded to the survey considered that mediation was not a viable alternative to judicial review because:
- The particular case was not suitable for judicial review.
- The other side would not agree to a mediation.
- It duplicated court costs (although only 6% of those who responded to the survey held this view).
- There was no guarantee of settlement.
Clearly mediation may not be suitable for all local authority disputes, for example those which relate to the scope of a local authority’s powers. In this situation, although mediation may not be appropriate to resolve the entirety of a dispute, it could be used to resolve other parts of the dispute once the court has ruled on whether a local authority has the power to act in a particular way.
However, it is likely that in the near future, more parties will be encouraged to settle disputes outside of the court room. Lord Justice Jackson’s final review of civil litigation costs is not published until 14 January 2010, but it is likely to conclude that the fewer cases that go through the court the better. Therefore, local authorities and or their lawyers should:
- Have regard to the pre-action protocol and the cost penalties of refusing to mediate. Upon receipt of a letter before claim, they should actively consider if and when mediation can be used.
- Consider making representations to the Legal Services Commission if a legally-aided claimant is unreasonably refusing an offer to mediate.
- Consider seeking a stay of proceedings for mediation, either:
- after the issue and receipt of a letter before claim from the claimant and before proceedings are commenced in the court.
- immediately after court proceedings have been issued; or
- immediately after permission to proceed is granted by the court and evidence has been served by both parties.
In 2001, the ADR Pledge was introduced for central government departments and the latest annual report makes interesting reading on the use of mediation in central government.
PLC materials
PLC Public Sector subscribers have access to a substantial number of resources relating to judicial review and mediation and in particular local authority lawyers may find the following resources useful:
- A practical guide to the judicial review procedure.
- Issuing a claim for judicial review: checklist.
- Defending a claim for judicial review: checklist.
- An overview of mediation for the client.
- Persuading the client and the opponent to mediate.
- Mediation: administrative arrangements.
- Model clauses for alternative dispute resolution mediation clauses.
- Sample paragraph: letter encouraging client to accept suggestion of mediation.
- Sample letter to opponent after mediation has been agreed .
- Mediation agreement and drafting notes.