Many in the family justice system welcomed the Government's decision early this year to abandon their proposal to make mediation compulsory. While the support for non-court dispute resolution (NCDR) was strong, with the approach having clear benefits for families, there was concern regarding safeguarding and the effectiveness of making an essentially voluntary process mandatory.
However, in the recent judgment of the High Court in X v Y (Financial Remedy: Non-Court Dispute Resolution) [2024] EWHC 538 (Fam) the court reminded those supporting and advising families that the court retains (and will soon have enhanced) powers to make orders in respect of non-court dispute resolution (NCDR) and indeed encouraged judges to use those powers.
The case concerned a financial settlement upon divorce where the assets were between £27 million and £29 million. Despite having incurred costs of over £580,000 and anticipating further costs of over £510,000, the parties had not engaged in any form of NCDR, whether before or after issuing court proceedings, a situation the judge described as "unfathomable".
The judge noted that Rule 3.3 of the Family Procedure Rules mandates the court to consider if NCDR is appropriate at every stage in proceedings. The court may, where appropriate, adjourn proceedings for a specified period to enable the parties to obtain information and advice about, and to consider using, NCDR. The Rules (which will be amended from 29 April 2024) include provision that the court can require a party to produce a form setting out their views on using NCDR as a means of resolving the case.
The updated Rules will also permit the court to adjourn a matter for the parties to attend NCDR even when the parties do not agree to the adjournment. Where a party has not attended a mediation information and assessment meeting (MIAM) or attempted NCDR, if a court finds there is not a good reason for this, it has the power to penalise them in costs by departing from the general starting point that there should be no order as to costs.
Laying down a clear marker as to the importance of NCDR, the court made clear that in future, parties to financial remedy and private law children proceedings should expect that at each stage of the proceedings the court would keep under active review whether NCDR is suitable in order to resolve the proceedings. Where NCDR can be undertaken safely and the parties and their legal representatives have not engaged meaningfully in any form of NCDR before issuing proceedings, the court is very likely to think this process appropriate and will make orders accordingly.
While NCDR remains in essence a voluntary process, it is clear that the combination of the forthcoming rule changes and appetite of the judiciary to keep parties away from the costs, acrimony and delay of court proceedings means that families (and their advisors) must consider very carefully at the beginning and throughout a case how NCDR can assist and be prepared to justify their position if they decide not to engage with it.