Will the Chancery Division embrace ENE?

Will the Chancery Division embrace ENE?

scales2Early Neutral Evaluation (ENE) is a form of alternative dispute resolution (ADR) whereby the parties to a dispute invite a neutral third party to give an opinion on the merits of the case (or particular aspects of the case) usually with a view to encouraging settlement or otherwise narrowing the issues in dispute.

The evaluator will generally be a lawyer or an expert in the relevant field. The use of judicial ENE is less common; indeed, some parties (and their legal representatives) may not be aware that this option is available.

In this post, we consider the use of ENE in the Chancery Division as well as how parties may provide for judicial ENE in their draft directions.

ENE: "a valuable tool"

Both the TCC Guide and the Admiralty and Commercial Courts Guide encourage the use judicial ENE within those courts, yet the Chancery Guide contains no equivalent provision (although the use of ADR in general terms is encouraged).

In his 2013 ‘Chancery Modernisation Review: Final Report’, Lord Justice Briggs endorsed ENE as a ‘valuable tool’ for encouraging settlement in a range of Chancery cases, but there have been no formal developments or pronouncements since regarding the use of ENE in the Chancery Division.

Advantages of ENE - Seal v Williams

A recent decision from Mr Justice Norris in the Chancery Division suggests that judicial ENE is alive and well in the Chancery Division, with the judge commenting, with approval, that ENE is being adopted in the Birmingham and Manchester District Registries.

In Seals v Williams [2015] EWHC 1829 (Ch), Norris J in the Chancery Division considered the use of ENE in an acrimonious inheritance dispute following a failed attempt at mediation. In a move that Norris J described as ‘commendable’, the parties’ legal representatives proposed the use of ENE to the court. The following advantages of ENE were highlighted in the judgment:

‘The advantage of such a process over mediation itself is that a judge will evaluate the respective parties’ cases in a direct way and may well provide an authoritative (albeit provisional) view of the legal issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy in addressing those legal issues. The process is particularly useful where the parties have very differing views of the prospect of success and perhaps an inadequate understanding of the risks of litigation itself.’

Having identified that judicial ENE can be requested in the TCC and Commercial Court, the judge stated that its ‘precise foundation’ is unclear. The judge pointed to CPR 3.1(m), which authorises the court to ‘take any other step or make any other order for the purpose of managing the case and furthering the overriding objective’, but observed that the CPR couldn’t supply the court with a jurisdiction that was otherwise lacking.

In his view, the expression of provisional views, with a view to assisting the parties reduces the areas of dispute and the general scope of the argument, is an ‘inherent part of the judicial function’, which, with respect, must be right.

The judge continued that the expression of provisional views during a hearing is not dependent in any way on the consent of the parties (indeed, it is often the case that such views are expressed in practice), but the expression of views about the ultimate outcome of a case at a hearing specially convened for that purpose is ‘slightly different’.

Norris J stated that it was part of the judicial function for a judge to accede to a request from the parties that they express provisional views on ‘particular hypotheses’ or upon the judge’s overall impression of the case so far. Norris J said that judges don’t have to accede to such requests, and it is assumed, although the judge did not address this specifically, that all parties would have to consent to a judicial ENE in the Chancery Division as this is a requirement of ENE in both the TCC and Commercial Court.

Providing for judicial ENE in proposed directions

The court also provided an insight into how, practically speaking, parties may provide for judicial ENE. In Seals, the parties proposed directions that:

  • the ENE be performed by a separate ‘ Settlement Judge’
  • the Settlement Judge would made non-binding recommendations as to the outcome of the case
  • short reasons would be given for those recommendations, although this would not be a provisional judgment
  • the Settlement Judge would take no further part in the proceedings
  • in light of the recommendations, the parties may agree a Consent Order (which would bind the parties, although the ENE recommendation in and of itself would not be binding)

In the absence of formal guidance, parties wishing to request judicial ENE in the Chancery Division may wish to take note of the points above when drafting their proposed directions for the court.

If, as Norris J’s judgment suggests, ENE is being adopted in the Chancery Division, the time seems ripe for the Chancery Division to include guidance on the use of ENE in the Chancery Guide and act on Briggs LJ’s recommendation that a judicial ENE option be developed for the Chancery Division.

What’s your experience of ENE?

Have you encountered ENE in the Chancery Division? If so, what are your views on the process?

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About the author:

Barry specialises in international arbitration and commercial litigation. He trained and practised at Jones Day before joining Pinsent Masons. At LexisNexis, Barry is Head of Arbitration and Head of the Lexis®PSL Dispute Resolution Group.

In practice, Barry’s work included commercial, aviation and technology arbitrations pursuant to international arbitral rules, involving UK and international clients. He also has a background in general commercial, civil fraud and IT litigation, including experience before the High Court. While in private practice, Barry worked with a broad range of clients from the private and public sectors.

At LexisNexis, when not focused on the strategic development and operational requirements of the Dispute Resolution Group, Barry’s content work focuses on the law and practice of international commercial arbitration and investment treaty arbitration. In addition to his work for Lexis®PSL, Barry contributes to the LexisNexis Dispute Resolution Blog and New Law Journal on litigation and arbitration matters