This article was first published in the ELA Briefing March 2019.
Author: Peter Frost
With the abolition of tribunal fees, the number of claims has increased considerably. But greater access to justice is only meaningful if that system of justice works efficiently and employment lawyers have misgivings as to the operation of the current Employment Tribunal Service. Therefore, it seems propitious to re-examine ADR as a means of resolving employment disputes.
The Civil Justice Council ADR report and ELA ADR report
In November 2017, ELA published a report of a working party, co-chaired by myself and Paul Goulding QC, examining the use of various types of ADR exercised to resolve employment disputes and making recommendations to enhance its use.
A year later, the CJC published a separate report on the use of ADR in civil cases and various ways in which it could be encouraged (or even mandated), both within the Civil Procedure Rules and outside those rules. It is important to recognise important differences between the conduct of disputes in the civil courts and those in the employment tribunal – the obvious one being the different costs rules – but a number of the observations and recommendations made in the report are of potential relevance to employment claims. While also recognising the direct relevance of the recommendations of the CJC report to ELA members conducting employment cases in the civil courts, the focus of this article will be on the relevance of those recommendations to the conduct of employment disputes in the employment tribunal.
The CJC quoted a striking statistic, namely that in a recent HMCTS court users’ survey, nearly 70% of all litigants contacted said that they would have preferred to avoid court proceedings, if at all possible. There is, therefore, consumer demand for a greater use of ADR. The CJC, however, identified three key challenges: the awareness of ADR; its availability (mainly in terms of funding and logistics); and the extent of the encouragement of ADR by the Government and courts. Before examining these issues, it surveyed the current ADR landscape.
The current ADR landscape
The CJC concluded, as had ELA, that mediation is the dominant form of ADR and that early neutral evaluation – whether judicial ENE or private ENE – was rarely used, although it felt that there may be potential for its greater use in certain types of case. The CJC also gave prominence, however, to the use of ‘round table meetings’ (also known as ‘mediation without the mediator’). Apparently frequently used in clinical negligence and personal injury cases – albeit perhaps encouraged by the relevant pre-action protocols – I am not aware that these all-party-and-adviser meetings are much used in the resolution of employment disputes (as opposed to more informal forms of negotiation between legal advisers).
The ‘usefulness and efficiency’ of judicial mediation, as expressed by employment judges, merited specific mention and was specifically praised in the ELA report, which called for further resources to be made available for it. More puzzling was the CJC’s acceptance that ‘Acas early evaluation was extremely effective in the employment tribunal world’ (para 4.17), combined with the later description of Acas early conciliation as a form of ‘pre-action mediation, information and assessment meeting’ (para 8.10). Valuable though Acas pre-action conciliation undoubtedly is in reducing the number of cases that might otherwise further burden the ETS, it cannot properly be described as a form of ‘evaluation’ given that Acas officers are specifically forbidden from giving advice to putative claimants.
Two specific mediation schemes described in the report are of potential relevance to employment lawyers. First, the NHS has recently established a permanent mediation scheme under which mediation is proposed or accepted through its panel firms. Two mediation providers – Trust Mediation and CEDR – provide rosters of specialist mediators. Where mediation is chosen, the NHS pays the mediation fee if the claimant is unrepresented or the NHS has admitted liability. This thereby goes some way to addressing the funding issue and ensures the availability of suitable mediators. At present, this scheme appears to apply only to clinical negligence cases, but there could be scope to extend it to other forms of claim, including employment claims. Indeed, the ELA report noted the existence of in-house mediation schemes for employment claims run by a number of NHS Trusts as well as various public bodies.
The second mediation scheme is the small claims mediation service, where parties to a dispute worth up to £5,000 receive the services of the small claims mediator for a one-hour telephone mediation and the accompanying administrative effort free of charge. This would cover all small contractual employment claims, including claims for holiday pay, deductions of wages and notice pay (although, subject to remission, a fee would be payable – issue fees alone for a claim of that value can be between £25 and £205, depending on the size of the claim).
Awareness of ADR
The CJC found evidence of ‘a chronic lack of public awareness and understanding of the operation of the legal system as a whole’, including the existence of ADR. It rightly observed that ‘public awareness is critically important in the broadly lower value cases where parties may not be represented’. This would apply to many of the claims brought in the employment tribunal.
Among the various ways identified to address this awareness gap, two recommendations were: the proposal for a new user-friendly central ADR website describing the different forms of ADR available and how ADR professional services could be accessed; and further education in ADR matters in law faculties and professional training bodies. Similarly, it recommended that the profession should introduce a duty to advise on the availability of ADR as a disciplinary requirement (as it is for solicitors in relation to funding options). Any such change would, of course, extend to all ELA members and would presumably cover all cases conducted in the tribunal. The ELA report recommended that further training could be provided to ELA members in relation to the various forms of ADR and that a list of mediators be made available, as has recently been done.
Availability of ADR
There is no shortage of trained mediators, but the key challenge is organising and funding ADR at a proportionate cost. Mid-priced and low-priced mediation schemes exist to provide a proportionate service, but are relatively little used. The reason for this could be that however modest the expenses of the mediator, the cost of the venue and legal fees combine to make mediation unattractive for cases worth up to around £50,000 (which would cover many cases brought in the employment tribunal).
The CJC recommendations to address this issue include a telephone mediation process to seek to minimise legal costs, further judicial resources to be made available for judicial ENE, and for evaluative conciliation for low and mid-value cases. The ELA report also found that cost was a key barrier to the use of ADR (although by no means the only one). It noted that judicial assessment had been introduced by the President as a cost/resource-light method of ADR, whereby the parties could be given a confidential and informal evaluation of the claims and defences in the action but questioned how widespread would be its use. However, it also noted the relatively widespread and increasing use of workplace mediation in both the public and private sectors as a way of solving largely run-of-the-mill employment disputes, albeit that this was a phenomenon largely unknown to employment lawyers (and presumably many putative claimants/respondents).
Government/court encouragement of ADR
The CJC saw encouragement as vital. It stopped short of introducing any form of compulsion to mediate, including any requirement that proof of ADR activity had to be produced as a pre-condition of any particular step. Nevertheless, while recognising that a considerable amount had been achieved by Government and the courts, the CJC felt that ‘more nudges and encouragements towards ADR can be built into the system at the stage at which proceedings are being or are about to be issued’.
Similarly, the Halsey test of acceptable reasons for not entering into ADR needs to be narrowed considerably. References to ADR in court forms should be strengthened to make it clear that it is not acceptable to reject ADR simply because the case is too complex, or that there are bad relations between the parties, or that there may be issues of law involved.
Instead, the acceptable opt-outs should be limited to the following circumstances:
- the parties have already attempted ADR without success;
- the parties are already committed to an ADR process in the near-term;
- the parties/a party satisfy the court of a need to wait for any meaningful negotiations to take place but they will commit to using ADR at that stage (often after disclosure) if there has been no prior settlement;
- there has been ‘unreasonable or obsessive conduct’ (as set out in Hurst) by one or other party; or
- there is a genuine test case in which the court’s judgment on an issue of principle is required.
An additional step identified by the CJC, but ultimately thought not yet appropriate for introduction, is the ‘notice to mediate’ procedure currently operating in British Columbia. Here, a notice to mediate issued by one party to the other constitutes a formal invitation to mediate, which triggers the automatic appointment of a mediator from a court-approved roster (unless the parties agree on an alternative mediator). The court has a residual supervisory role, but apparently this is little used or required in British Columbia.
An ADR toolkit for employment disputes
It was recognised that wider case management powers and costs sanctions were simply irrelevant to many low-value cases within the civil courts. The same could be said of just about all cases conducted in the employment tribunal because of the absence of cost shifting. However, whereas such cases in the civil courts benefit from the availability of the Small Claims Mediation Scheme, there is no equivalent scheme in the tribunal.
The ELA report recognised these challenges. The Acas early conciliation scheme offers the opportunity for early settlement discussions, but it is often purely seen as an administrative ‘tick box’ pre-action requirement. Neither the ET forms nor the accompanying guidance contain any reference to ADR, bar Acas early conciliation. The President’s recent ‘Guidance on ADR’, incorporating a description of the operation of judicial assessment and judicial mediation was a welcome reminder of the existence of these two additional forms of ADR; however, both seem to apply only to the higher value cases where a preliminary hearing is listed.
In my experience, there is little (if any) discussion of ADR in preliminary hearings and, sadly, little judicial encouragement to the parties to pursue it, even if one party expresses a willingness to do so. Similarly, there are no sanctions for an unreasonable refusal to engage in ADR, unless tribunals show themselves willing to see this as unreasonable behaviour resulting in a costs award, which would arguably represent a change to the present state of the law, as well as raising policy issues.
The CJC report makes clear that it ‘does not purport to describe a perfect end-state for ADR or its role in the Civil Justice system’. It sees a clear need for a continuing liaison between the judiciary, ADR professionals and other stakeholders to progress ADR’s contribution to the resolution of civil disputes. It is similarly clear that much can still be done in relation to the use of ADR in the resolution of employment disputes.
The ELA report noted the need for the development of an ‘ADR toolkit’, providing suitable forms of ADR at various points both prior to and during the litigation process, and that this was an aim shared by the President of the Employment Tribunal. It can be seen that with the combination of workplace mediation – particularly if this can be extended in the private sector to smaller employers – Acas pre-action conciliation, judicial assessment and judicial/private mediation, the ADR toolkit now arguably exists.
The challenge now for ELA members is how best to increase awareness and usage of these tools for the benefit of their clients; for example, as with explaining funding options, ELA members could ask their clients in the initial discussions if their employer operated a workplace mediation scheme. As the ELA report also demonstrated, those countries overseas whose governments had invested in ADR systems generally saw that investment paid off via increased early settlement of employment disputes. Perhaps there is a lesson here for the Department for Business, Energy and Industrial Strategy.