Non-Court Dispute Resolution (NCDR)

April 2024 saw a pivotal change in the rules that has reshaped the landscape of dispute resolution. The Courts now expect parties to actively engage in Non-Court Dispute Resolution (NCDR) before initiating formal proceedings.

The Court’s Stance on NCDR

The revised rules empower the Court to:

• Stay proceedings and mandate parties to engage in NCDR if they have failed to do so initially.
• Consider unreasonable failure to engage in NCDR as a significant factor when determining costs orders. This change directly impacts the financial implications of litigation, encouraging meaningful attempts at resolution before resorting to the courtroom.

Form FM5: A Key Requirement

At the First Directions Appointment (FDA), the Court now requires the submission of Form FM5, which outlines the parties’ views on NCDR. Importantly, this obligation doesn’t end at the FDA. Parties may be required to update their NCDR engagement status at future hearings, emphasising that NCDR is now integral to the Court’s procedural approach.

What Qualifies as NCDR?

The Pre-Action Protocol (PAP) clarifies that a mere exchange of correspondence will not suffice. Recognised forms of NCDR include:

• Mediation
• Arbitration
• Neutral Evaluation (NE), including Early Neutral Evaluation (ENE)

Exploring Neutral Evaluation (NE)

Neutral Evaluation, sometimes referred to as Early Neutral Evaluation (ENE), is a flexible tool that can address specific aspects of a dispute. Examples include:

• Assessing whether a trust is likely to be deemed a resource.
• Determining whether an asset is matrimonial or non-matrimonial.
• Evaluating the enforceability of a prenuptial agreement.

ENE can also be used to narrow the scope of issues before proceedings begin, helping parties define the relevant questions and streamline the case. This proactive approach is recognised as meeting the NCDR requirements, enabling claims to move forward in Court.

The Future of Dispute Resolution

The introduction of these changes reflects the Court’s commitment to fostering a culture of resolution outside traditional litigation. By prioritising NCDR, parties can potentially save time, reduce costs, and achieve more collaborative outcomes.

If you’re considering Arbitration, Neutral Evaluation, or other forms of NCDR, we’re here to guide you through the process and help you meet these new requirements effectively.

The cost of instructing counsel (including King’s Counsel) at a NCDR hearing (as opposed to appearing as an advocate) could be money well spent.  A KC’s opinion at an early stage which may not conclude the case but would narrow the issues and focus the disclosure and thus limit the costs is a clear advantage.  It would placate the Court at the FDA when deciding whether the case should be stayed to encourage the parties to consider NCDR.