Besides pre-action protocols, the first attempt to persuade the parties to settle is the case management questionnaire that the parties are obliged to complete early in proceedings. It asks whether either party wishes a one-month stay in order to attempt settlement of the case by negotiation or any other form of alternative dispute resolution. The court has the power to order a stay even if the parties do not think it a good idea, in which case the judge will specify the length. That period can be extended if the parties are making good headway when it runs out.
This is where “early neutral evaluation” can take place – although, sadly, few litigators are telling their clients about it. In this procedure, a “neutral” gives the parties to a dispute a non-binding assessment of their respective chances of success, were the litigation to be pursued. It is, in effect, a quick look at the case so the parties get a clear idea of which way the wind is blowing.
Early neutral evaluation can be traced to the Commercial Court. Before Woolf, the Commercial Court sought to encourage parties to consider ADR as part and parcel of their preparation for litigation. It directed the attention of the parties and their legal advisers to considering cost-effective means of resolving disputes pending before the court. If at this juncture it appeared to the Commercial Court judge that the matter before him was appropriate for alternative dispute resolution, including early neutral evaluation, he could invite the parties to embrace it. The judge had the power to adjourn the proceedings to encourage and facilitate the parties to refer their dispute to that process.
Recent Commercial Court guidance suggests that, following discussions with the parties, the judge can offer to provide the evaluation himself if he believes that early neutral evaluation is likely to assist in resolving the dispute. If he does so, he disqualifies himself from further involvement in the case unless the parties agree otherwise. This means the judge does not prejudice his ability to conduct the trial of the action.
- Early neutral evaluation is a pre-trial assessment of the parties’ chances of success
- The neutral can be the judge
- Parties must prepare their cases better, earlier
Early neutral evaluation should appeal to parties that have previously attempted to resolve matters before starting proceedings but have been met with a brick wall from the other side. Building’s legal pages have highlighted the importance of a party having at least rudimentary expert and witness evidence ready and a good grasp of the documents before it starts its action. To embrace early neutral evaluation, they will have to be better prepared than ever before.
Although the process is not binding and anything said in the evaluation cannot be used in evidence later on, parties are less likely to start posturing or suggesting that they have a legal Exocet up their sleeve if they have already presented their cases to a neutral.
Perhaps the best thing about the process is that the parties are in attendance and will see first hand how their “case” pans out. Even if a settlement does not ensue there and then, it does give them a day in court in a more formal context than a facilitative mediation.
The process’ other major selling points are that it takes place well before serious costs have been incurred and that it can deal with subjects that might not otherwise be adjudicable because they do not arise under a construction contract. His Honour Judge Toulmin has so far taken the lead in promoting the process in the Technology and Construction Court and gave a paper to the Society of Construction Law on the subject not long ago.
Simon Tolson is a partner in solicitor Fenwick Elliott.