New Guidance on the use of alternative dispute resolution (ADR) has been published by the President of the Employment Tribunals (England and Wales only). It discusses four types of ADR available with the aim of saving costs (to both the parties and the Tribunal) and reducing the backlog in the Tribunal system.
Avoiding Tribunal hearings | New guidance on Alternative Dispute Resolution
ADR in this context refers to the confidential processes available to parties engaged in employment litigation to resolve their disputes without the need for a full judicial hearing.
We discuss the four forms of ADR below:
ACAS conciliation is a well-established, independent service that users of the Tribunal system will already be familiar with. Very little information is given about ACAS conciliation in the Guidance for this reason.
Briefly, for individuals who intend to bring a claim in the Tribunal, they must first notify ACAS in order to explore the possibility of settlement before a claim is filed. However, the parties do not have to attempt conciliation if they do not wish. After this, conciliation is open to the parties up to and during a final hearing.
Statistics from ACAS for 2022/2023 show that 37% of early conciliation cases resulted in a positive outcome, and 77% of Tribunal claims were also positively resolved.
Judicial mediation is a service offered by the Tribunal for cases listed for three days or more. Whilst they used to be primarily held in person, the intention now is that the majority will be conducted via video or telephone. This one-day meeting will take place before the parties incur significant cost, to maximise the savings that an agreement can deliver. It is a voluntary process, and any party may withdraw prior to finalising settlement terms. Any settlement reached will need to be confirmed via ACAS.
A trained Judge will mediate and help the parties to reach a resolution by exploring their issues, interests, needs and concerns. They are not afraid to tell parties to be realistic in their expectations. Their role is intended to be ‘facilitative’, which means that the Judge will generally not discuss the party's prospects of success as part of the process, unless parties agree to it. Even then, it will be the Judge's own view based upon the information available to them at the time and their expertise. It is not binding.
One of the benefits of judicial mediation is that the process allows for creative outcomes which a Tribunal would not typically be able to order. A key example is a reference.
Tribunals are keen to list judicial mediation: they can be listed fairly quickly and have a high success rate - according to the Guidance approximately 65-70% of mediations have been successful.
Judicial assessment involves an evaluation of the strengths, weaknesses and risks of the parties' respective claims, allegations and contentions by an impartial Judge. The assessment is 'evaluative', which means that the Judge will encourage the parties to be open and pragmatic and will consider the liability and/or remedy aspects of the case. It will do so based on the information available to them at the time (which is often limited). The Judge will typically not have sight of the evidence which will be relied upon at final hearing. The assessment is not binding.
Whilst not technically a form of ADR itself, by identifying the issues in the case, the risks and potential liabilities involved, it can encourage settlement. It takes place at an early stage at the end of a preliminary hearing, in the hope that the case can be resolved before significant costs are incurred. It will usually take place via video or telephone but may be held in person. Any settlement reached will need to be confirmed via ACAS.
It can be a useful tool where parties have unrealistic goals in terms of remedy.
The Guidance provides no details on the number of cases where judicial assessment has been used, or the savings to the Tribunal.
Dispute resolution appointment is a new scheme which has been introduced across Tribunals in England and Wales following a successful pilot scheme in the West Midlands Tribunal.
An independent Judge will provide a view as to whether either party is being unrealistic, either in respect of the issues raised or the amounts sought or disputed and may express an opinion as to the strength or weakness of the claim or response. The view is not binding. Instead, the aim is to encourage parties to resolve their disputes – although it is not envisaged that settlement discussions will occur during the appointment itself.
Appointments will automatically be listed for 2-3 hours in cases scheduled for a final hearing lasting six days or more (although this may vary according to each region). Whilst the Guidance suggests that parties may make submissions before an appointment is listed as to why it would not be necessary, it does not set out any criteria which the Tribunal will consider. This may, however, include things like public sector respondents who have strict limitations on use of public money. Notwithstanding this, the Guidance highlights that the appointments offer wider benefits beyond settlement, such as helping the parties to understand the core of the case and to clarify or narrow the issues to ensure a more focused final hearing. Therefore, it is more likely than not that dispute resolution appointments will proceed.
The appointments will take place after witness statements are ordered to be exchanged. The Tribunal must be provided with an agreed file of documents including the pleadings, case management orders, list of issues, witness statements, expert evidence, schedules and counter-schedules of loss, and a very limited number of other key documents. As such, there will be limited scope to vary case management directions, and there may be severe consequences for parties who have failed to exchange statements or are otherwise not prepared for the final hearing.
According to the Guidance, Judges in the Midlands West Tribunal have conducted about 200 such appointments, resulting in a net saving of over 1,000 sitting days.
It is worth keeping in mind that the four forms of ADR are not exclusive of one another. For example, a judicial assessment could lead to a judicial mediation, and a dispute resolution appointment may be followed by a judicial mediation. And of course, ACAS discussions can be conducted in parallel.
Our helpful short-form table setting out the key information can be found here.
The Presidential Guidance is worth a read in full for those bringing or responding to claims in the Tribunal. You can access it here.
Our Employment team deal with litigation and ADR on a daily basis and would be delighted to discuss any of the issues raised in this article with you.