Lomax v Lomax

The issue in this appeal is the effect of rule 3.1(2)(m) of the Civil Procedure Rules 1998

Rule 3.1 contains the court's "general powers of management" and sets out a “list of powers” which are in addition to any other powers the court might have. The list, in subparagraph (2), includes at (m) 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".

Does this provision mean that the court can only order that an Early Neutral Evaluation (“ENE”) hearing takes place if all the parties agree? Or, does it mean that the court can order that such a hearing takes place whether or not the parties agree?

The substantive proceedings comprise an application by a widow under the Inheritance (Provision for Family & Dependants) Act 1975. By her order dated 20 May 2019, Parker J declined to order an ENE hearing. She decided that the court did not have power to do so when, as in this case, one party refused to consent to such a hearing.

The party who opposed an ENE hearing is the defendant (the respondent to this appeal). The claimant (the appellant) seeks such a hearing and submits that the judge was entitled to order and should have ordered it to take place despite the defendant's opposition. It is clear from Parker J's judgment that, if she had concluded she had power to order an ENE hearing, she would have done so. The issue on this appeal is, therefore, largely one of principle, as summarised above.

Reference to an ENE hearing was incorporated into rule 3.1(2)(m) by the Civil Procedure (Amendment No. 4) Rules 2015. It came into effect on 1 October 2015.

Paragraph (m), as I have said, appears in a list of other powers available to the court. It provides that, among the steps the court can take and among the orders it can make, is to hear an ENE. There are no express words either in rule 3.1 generally or specifically in subparagraph (m) to the effect that an ENE hearing can only be ordered if all the parties consent.

We were also referred during the course of the parties' submissions to the overriding objective, which I do not propose to set out; to rule 1.4(2)(e), which states that active case management includes "encouraging the parties to use an alternative dispute resolution

Until recently the commentary on rule 3.1(2)(m) in the White Book 2019, at 3.1.13, stated that:

We have been referred specifically to the Chancery Guide, paragraphs 18.7, 18.8 and 18.9; the Commercial Court Guide, paragraph G2.3; and the Technology and Construction Court

The authorities to which we have been referred include, in particular, Halsey v Milton Keynes General NHS Trust and Seals and Seals v Williams [2015] EWHC 1829 (Ch). In the former decision, Dyson LJ (as he then was), giving the judgment of the court, said at paragraph 9:

In Seals and Seals v Williams, which was decided before the rules changed expressly to incorporate ENE, Norris J said at paragraph 3:

I would also refer to the equivalent hearing in financial remedy cases in the Family Court and the Family Division, the Financial Dispute Resolution appointment. This was initially introduced on a trial basis in 1996. Its success meant that it was incorporated into the then rules in 2000, and it has been a standard part of the process since then. It is now in the Family Procedure Rules 2010, Part 9.

The benefits of the FDR appointment for the parties, by promoting the early settlement of the case, and for the court, by saving time, have been amply demonstrated in the thousands, I would estimate, of cases in which it has taken place since 2000. In her judgment in this case, Parker J rightly referred to the FDR appointment as having been proved to be “outstandingly successful”.

Parker J concluded that this case “cries … out for a robust judge-led process” by which the case might be resolved by agreement. However, as I have said, she felt constrained to decide that she did not have power to order an ENE having regard to the defendant's refusal to agree to this taking place.

Initially, at the hearing before her, it had been conceded on behalf of the claimant that the judge was indeed so constrained. This had been based significantly upon what was stated

I am grateful to both counsel for their elegant submissions.

Mr Buckingham on behalf of the claimant submits, simply, that the rule does not expressly provide that the parties have to consent to an ENE hearing being ordered and that there is nothing which suggests that the need for such consent should be implied into the rule. He submits that it could not be right that one party should be able to exercise, what he described as, a veto over one of the court's case management powers. He further relies on the overriding objective as supporting the rule being interpreted as not requiring consent.

Mr Entwistle on behalf of the defendant made clear that his client is not opposed to any form of ADR. The defendant is opposed only to ENE because he considers that mediation is more appropriate in this case.

Mr Entwistle summarised his submissions in three parts. First, he submits that the court has no power to order parties to submit their dispute to ADR which, in his submission, includes ENE. He relies in support of this submission on, in particular, Halsey v Milton Keynes. Secondly, the relevant provisions of the CPR reinforce the principles set out in Halsey v Milton Keynes. Thirdly, the fact that the authors of the Court Guides consider consent is required support the conclusion that it is.

In support of his submission that ADR includes ENE, he took us to the definition of ADR in the Glossary in the White Book. He also referred to the Court Guides as supporting the conclusion that ENE is a form of ADR. Based on Halseyv Milton Keynes, he submits that the court does not have power to order parties to submit their dispute to ENE against their will, absent an express provision to the contrary. This is because: (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. He submits that what was said in Halseyv Milton Keynes applies to all forms of ADR and is still good law.

In support of his second submission, Mr Entwistle relies on the use of the words "encouraging” and “facilitating" in rule 1.4(2)(e). He submits that these words support the conclusion that ENE can only be ordered with the parties' consent. He also relies on the use of the words "helping the parties settle the case" in subparagraph (m). Additionally, he pointed to the use, in other subparagraphs of rule 3.1(2), of mandatory words such as "require", "direct" and "hold" in contrast to the words that appear in subparagraph (m). He submits that forcing the parties to have an ENE hearing would be a strange way of helping them to settle the case.

Mr Entwistle also submits that the previous commentary in the White Book and the passage in the CPN were based on a misreading of Seals and Seals v Williams. Finally, he relies on what is said more generally in the Court Guides about ENE and the requirement for the parties to consent before the court can order it.

I start by noting, as referred to above, that the wording of subparagraph (m) does not contain an express requirement for the parties to consent before an ENE hearing is ordered. The question therefore is whether such a limitation is to be implied.

I do not consider that Halsey vMilton Keynes assists with the proper interpretation of subparagraph (m) because it was dealing with a very different situation. It was concerned with whether a court can oblige parties “to submit their disputes to mediation”. It does not, therefore, in my view assist with the interpretation of subparagraph (m), which is dealing with an ENE hearing as part of the court process.

In any event, ENE does not prevent the parties from having their disputes determined by the court if they do not settle their case at or following an ENE hearing. It does not, in any material way, obstruct a party's access to the court. Insofar as it includes an additional step in the process, this is not in any sense an “unacceptable constraint”, to use the expression from Halsey. In my view, it is a step in the process which can assist with the fair and sensible resolution of cases.

This means that I do not need to enter into the question raised in Wright v Michael Wright Supplies Ltd & Anor [2013] EWCA Civ 234 as to what Halsey determined and the extent to which it remains good law. I would only comment that the court's engagement with mediation has progressed significantly since Halsey was decided. I also do not consider that Seals and Seals v Williams directly assists. It dealt with the position prior to the express introduction of ENE in subparagraph (m).

As for the Court Guides relied on by Mr Entwistle, whilst they can assist in particular where there is ambiguity, as stated in the White Book at 12-44, p.2898:

Looking at the issue more generally, as I have already described, 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 and that, I would suggest, of every other judge who has been involved in financial remedy cases, 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. As Norris J said in Bradley v Heslin [2014] EWHC 3267 (Ch):

Dealing with Mr Entwistle's second submission, I also do not consider that his analysis of the rules supports the conclusion that consent is to be implied in subparagraph (m). If the intention had been to require the parties to consent, it would have been very easy to make this clear by expressly providing for this. In my view, the absence of any such express requirement is a powerful indication that consent is not required. As I have already indicated, in my view an ENE hearing is not an obstruction to or constraint on a party's access to the court.

I would also suggest, in response to Mr Entwistle's submission that ordering an ENE is a strange way of helping parties settle a case, that it requires parties to focus on whether a case might be capable of settlement and requires them to hear a judge's neutral evaluation. It requires them to hear this because the parties can be, and would typically be, ordered to attend the hearing as permitted by rule 3.1(2)(c), because one of the key purposes of such a hearing is for the parties to hear directly the judge’s evaluation of the case. Also, contrary to another of his submissions, based on my experience of FDRs, the result of requiring parties to have such a hearing can and often will be to achieve a great deal, including saving rather than adding to costs.

In conclusion, I see no reason to imply into subparagraph (m) any limitation on the court's power to order an ENE hearing to the effect that the agreement or consent of the parties is required. Indeed, in my view such an interpretation would be inconsistent with elements of the overriding objective, in particular the saving of expense and allotting to cases an appropriate share of the court's resources, and would, therefore, be contrary to rule 1.2(b). If my Lord and my Lady agree, I propose that the appeal be allowed, and, having regard to Parker J's clear view that this case would benefit from an ENE hearing, I would propose that the court directs that one be held as soon as possible.

I agree.

I also agree.