The ADR Smörgåsbord Case Law Update

1. The ADRSmörgåsbordCase Law Update Sarah Williams Keating Chambers

2. Question One: What should be the response of the court to a party which, when invited by its opponent to take part in a process of alternative dispute resolution, simply declines to respond to the invitation in any way?

3. Since 2004, the leading case has been Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; [2004] 1 W.L.R. 3002, CA. • Don’t compel parties to mediate • Robust encouragement is permissible in certain cases • Power to deprive successful party of some/all of its costs if there is unreasonable refusal to take part in ADR

4. PGF II SA: freehold owner of 33 Lombard Street OMFS Company 1 Limited: leaseholder of various floors

5. Rule 36.10 (4) Where – (a) ... (b) a Part 36 offer is accepted after expiry of the relevant period, if the parties do not agree the liability for costs, the court will make an order as to costs. (5) Where paragraph (4)(b) applies, unless the court orders otherwise – (a) the claimant will be entitled to the costs of the proceedings up to the date on which the relevant period expired; and (b) the offeree will be liable for the offeror’s costs for the period from the date of expiry of the relevant period to the date of acceptance.

6. Mr Recorder Furst QC concluded: • That there is a continuing debate about the virtues of mediation • However most civil disputes were suitable for mediation and are encouraged by various sources including CPR and the court guides .

7. Court of Appeal: “In my judgment, the time has now come for this court firmly to endorse the advice given in Chapter 11.56 of the ADR Handbook, that silence in the face of an invitation to participate in ADR is, as a general rule, of itself unreasonable, regardless whether an outright refusal, or a refusal to engage in the type of ADR requested, or to do so at the time requested, might have been justified by the identification of reasonable grounds.”

8. Court of Appeal: “this case sends out an important message to civil litigants, requiring them to engage with a serious invitation to participate in ADR, even if they have reasons which might justify a refusal, or the undertaking of some other form of ADR, or ADR at some other time in the litigation.”

9. PGF II SA v OMFS Company 1 Limited [2013] EWCA Civ 1288; [2014] 1 B.L.R Plus 2, CA.

10. Question two: Does the limitation period to an action run from the date of payment of the adjudicator’s decision or from the date of the underlying cause of action?

11. Contractor Asbestos sub-contractor

12. Key Dates March 2004 Sub-Contract between Higgins and Aspect for asbestos removal February 2005 Alleged discovery of asbestos June/July 2009 Adjudication 3 February 2012 Court proceedings issued

13. Aspect sought this implied term: “… that in the event that any dispute between the parties was referred to adjudication pursuant to the Scheme and one party paid money to the other in compliance with the adjudicator’s decision made pursuant to the Scheme, that party remained entitled to have the dispute finally determined by legal proceedings and if or to the extent that the dispute was finally determined in its favour, to have that money repaid to it.”

14. Aspect Contracts (Asbestos) Limited v Higgins Construction PLC [2013] EWCA Civ 1541; [2014] C.I.L.L. 3449, CA. (being appealed to the Supreme Court)

15. Court of Appeal: “I agree that, for limitation purposes, no new cause of action arises either as a result of an implied contractual term, or on the basis of a restitutionary claim, and that, when an unsuccessful party to the adjudication subsequently brings court proceedings, it is doing so on the basis of its original rights under the construction contract to claim payment under the contract, damages for breach of contract or a negative declaration that it is not in breach.”

16. Walker Construction (UK) Limited v Quayside Homes Limited [2014] EWCA Civ 93, CA

17. Question three: Are human rights relevant to adjudication?

18. “Article 1 of the First Protocol Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

19. Whyte & Mackay Limited v Blyth & Blyth Consulting Engineers Limited [2013] CSOH 54; 2013 S.L.T. 555, OH

20. Question Four: In serial adjudications, can the decision of the first adjudicator be put in front of the second adjudicator, or does this bias the second adjudicator and/or breach the rules of natural justice?

21. Employer Contractor

22. Decision of the first adjudicator put in front of the second adjudicator

23. Arcadis UK Ltd v May and Baker Ltd (t/a Sanofi) [2013] EWHC 87 (TCC); [2013] C.I.L.L. 3305

24. Question Five: Does the English Court have power to declare that a claim can only be properly commenced by arbitration where that claim is brought in a foreign jurisdiction outside the European regime?

25. Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydroplant LLP [2013] UKSC 35, [2013] 1 W.L.R. 1889, Supreme Court.

26. Sarah Williams Keating Chambers