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United Kingdom

In the United Kingdom, ADR is encouraged as a means of resolving taxpayers' disputes with His Majesty's Revenue and Customs.

ADR providers exist in the regulated finance, telecoms and energy sectors. Outside these regulated areas, there are schemes in many sectors which provide schemes for voluntary membership. Two sets of regulations, in March and June 2015, were laid in Parliament to implement the European Directive on alternative dispute resolution in the UK.

Alternative Dispute Resolution is now widely used in the UK across many sectors. In the communications, energy, finance and legal sectors, it is compulsory for traders to signpost to approved ADR schemes when they are unable to resolve disputes with consumers. In the aviation sector there is a quasi-compulsory ADR landscape, where airlines have an obligation to signpost to either an approved ADR scheme or PACT - which is operated by the Civil Aviation Authority.

The UK adopted the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 on 1 October 2015, which set out rules in relation to ADR and put measures into place to widen the use and application of ADR in disputes with consumers after any available internal procedures have been exhausted.

Judges often encourage use of ADR in appropriate legal cases, and such encouragement is endorsed in the Civil Procedure Rules (CPR 1.4). Halsey v The Milton Keynes General NHS Trust (2004) provided guidance on cases where one party is willing to take part in ADR and the other refuses to do so on grounds which might be considered unreasonable. In a case which followed shortly after Halsey between Burchell, a builder, and Mr and Mrs Bullard, his customer, the Bullards and their solicitors had "blithely battle on" with litigation where the Appeal Court found that ADR would have been a speedier and less costly means of resolving the parties' dispute. In a 2013 appeal case which has been described as "com a long way" since Halsey, the Court of Appeal strengthened the argument for using mediation and asserted that "mediation works". In PGF II SA v OMFS Company 1 Ltd., PGF II issued several invitations to OFMS to take part in mediation to resolve a dispute on dilapidations between them, which received no response. The trial court and appeal court agreed that "no response" amounted to an "unreasonable refusal to participate" in ADR. The issues were resolved by a settlement immediately prior to the trial date and a cost sanction imposed on OFMS. The Appeal Court upheld the guidance in the ADR Handbook, which stated that "silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable", and thus endorsed the value of the ADR Handbook itself.

In England and Wales, ADR is now more commonly referred to as ‘NCDR’ (Non Court Dispute Resolution), in an effort to promote this as the normal (rather than alternative) way to resolve disputes. A 2023 judgment of the Court of Appeal called Churchill v Merthyr confirmed that in the right case the Court can order (i) the parties to engage in NCDR and / or (ii) stay the proceedings to allow for NCDR to take place. This overturns the previous orthodoxy ((the 2004 Court of Appeal decision of Halsey v. Milton Keynes General NHS Trus t) which was that unwilling parties could not be obliged to participate in NCDR.

The Senior Judiciary in England and Wales are strongly in favour of greater use of NCDR. The Online Procedure Rule Committee was set up under the Judicial Review and Courts Act 2022 to make rules governing the practice and procedure for specific types of online court and tribunal proceedings across the Civil, Family and Tribunal jurisdictions. OPRC is an advisory non-departmental public body, sponsored by the Ministry of Justice. The committee is chaired by the Master of the Rolls, Head of Civil Justice. The aim is to deliver more integrated, efficient and digital approach to justice. Its work will support the use of innovative methods of resolving disputes and help define the operation of pre-action dispute resolution

In the Family Division, there has been a prevailing judicial view that the court should be the last resort for families. High Court judgments have followed the Court of Appeal decision in Churchill v Merthyr, confirming that the courts can stay proceedings to require parties to attend NCDR (Re X and NA v LA).

In April 2024, a new definition of NCDR was set out in the Family Procedure (Amendments No 2) Rules 2023/1324 as “methods of resolving a dispute other than through the court process, including but not limited to mediation, arbitration, evaluation by a neutral third party (such as a private Financial Dispute Resolution process) and collaborative law.”

In the accompanying Pre-application Protocol (Annex to PD9A), the One Couple One Lawyer process was also referenced “The court may also consider the parties having obtained legal advice via the “single lawyer” or a “one couple, one lawyer” scheme as good evidence of a constructive attempt to obtain advice and avoid unnecessary proceedings ” One Couple One Lawyer, or Single Lawyer, is a family law process developed in England and Wales where a separating couple shares one lawyer who advises them both, impartially and together, as to how a judge would view their case, and the likely outcome were they to litigate, thus enabling them to reach a fair settlement on separation or divorce. This differs from early neutral evaluation as it is designed so that parties never require separate representation, are assisted throughout by one legal team and the process has no adversarial features at all, either at the financial disclosure or advice stages.

The new Family Procedure rules also gave the courts two new powers:

1.to require parties to set out their views on using NCDR in Form FM5; and

2.to consider whether a failure, without good reason, to engage in NCDR should impact on who pays the costs of the litigation.