Monday, September 2, 2019

Lomax v Lomax

[2019] EWCA Civ 1467

The question for the CA in this inheritance dispute was whether the court can only order that an Early Neutral Evaluation (“ENE”) hearing takes place if all the parties agree. CPR 3.1 sets out the  court’s “general powers of management” and includes that the court may “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case”. 

The TCC Guide describes ENE in this way: “Alternative forms of ADR include early neutral evaluation either by a judge or some other neutral person who receives a concise presentation from each party and then provides his or her own evaluation of the case.”

The TCC Guide also notes that: “In an appropriate case, and with the consent of all parties, a TCC judge may provide an early neutral evaluation either in respect of the full case or of particular issues arising within it.”

It is intended to be carried out at an “early” stage of the court process. There is usually a preliminary meeting at which the procedure is agreed. Then following some pre-reading and a short “hearing” the evaluation is prepared. What passes in the course of the ENE is entirely privileged.

At first instance, the Judge concluded that the case cried “out for a robust judge-led process” by which the case might be resolved by agreement. However, she also considered that she did not have power to order an ENE because of the refusal to agree to this taking place. The defendant said that they were not opposed to any form of ADR, but they were opposed only to ENE because they considered that mediation was more appropriate. The defendant further said that the court had no power to order parties to submit their dispute to ADR which the defendant said included ENE. In support the defendant relied on Halsey v Milton Keynes, a case involving mediation, in which the court held that (i) to oblige unwilling parties to engage in this, as a form of ADR, would be an unacceptable obstruction of their right of access to the court; and (ii) to compel unwilling parties to have an ENE hearing would achieve nothing except to add to costs. 

LJ Moylan noted that the CPR did not contain an express requirement for the parties to consent before an ENE hearing was ordered. It would have been easy to include such a constraint. The difference between ENE and mediation (and so Halsey) was that an ENE hearing was part of the court process. Further, ENE did not prevent the parties from having disputes determined by the court if the ENE hearing did not lead to a settlement. It did not obstruct a party’s access to the court. It was “a step in the process which can assist with the fair and sensible resolution of cases”. The Judge continued:

“Looking at the issue more generally…the great value of a judge providing parties with an early neutral evaluation in a case has been very well demonstrated in financial remedy cases. Further, the benefits referred to above have been demonstrated not only in cases where the parties are willing to seek to resolve their dispute by agreement and are, therefore, willing to engage in an FDR. In my experience...the benefits have also been demonstrated frequently in cases in which the parties are resistant or even hostile to the suggestion that their dispute might be resolved by agreement and equally resistant to the listing of an FDR.”

Noting that the Judge at first instance held a clear view that the case would benefit from an ENE hearing, the CA directed that one be held as soon as possible. The emphasis on the Financial Dispute Resolution hearing or FDR may explain the difference in approach to the TCC Guide. The FDR is the second court hearing, held on a without prejudice basis, in matrimonial financial proceedings where a Judge usually gives an indication as to which elements of each party’s position they prefer. This was, however, a CA case, and clearly represents further guidance from the courts about the importance of looking for alternative ways to resolve disputes. 

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