What is alternative dispute resolution?

Alternative dispute resolution (ADR) relates to certain processes which aim to resolve disputes without a full judicial hearing in a court or employment tribunal. Both parties usually have to agree to participate in ADR before it can go ahead.

New guidance

It is well known that employment tribunals have a large backlog of claims to work through, meaning it is now more so than ever in the interests of the Tribunal Service to try to facilitate as many settlements as possible to minimise the number of cases which flow through to a final hearing.

New presidential guidance in respect of ADR has been published by the President of the Employment Tribunals (England and Wales) and can be found here. This guidance highlights the four main types of ADR available to parties involved in litigation in an employment tribunal, namely:

• Acas's early conciliation service;
• judicial mediation;
• judicial assessment; and
• dispute resolution appointments.

Whilst the first three options above have been available to parties involved in employment tribunal litigation for some time, dispute resolution appointments are a new form of non-consensual ADR which has recently been piloted in the Midlands West Employment Tribunal.

The guidance largely focuses on the positives of ADR and how it can assist parties in avoiding the financial and emotional strain of litigation. However, the document is also clear that employment litigation which ends up at a hearing is putting a strain on the public purse.

Acas's early conciliation service

Before an individual is able to bring an employment tribunal claim, they must tell Acas that they intend to make the claim. If the individual chooses, Acas will try to help them reach an agreement with their employer before they file their claim. This process is called early conciliation (EC).

The use of Acas's EC service resolves a lot of potential cases: Acas's 2022-23 Annual Report found that approximately only 9% of all EC cases made it to a tribunal, and it says it "positively resolved" 77% of employment tribunal claims and 37% of all EC notifications. Acas estimates it saved the taxpayer up to £100 million by reducing demand on employment tribunals. On the face of it, Acas's EC service appears to be very effective at disposing of claims before they reach a tribunal.

The EC process acts as a "filter" to help decrease the number of claims reaching a tribunal and wasting judicial time.

The guidance does not focus on EC, probably because it does not directly involve the Tribunal Service and is well known.

Judicial mediation

Judicial mediation is a process where a specially trained employment judge chairs a mediation hearing between the parties. The judge does not seek to give any meaningful view on either party's prospects of success, but concentrates on mediating a resolution, so this is a "facilitative process". It is estimated that judicial mediation has a success rate of 65-70% and has saved around 22,000 sitting days of judicial time.

All parties have to agree to participate in judicial mediation and a tribunal must consider whether it is a good use of judicial resource. In other words, they must believe there is a realistic prospect of the matter being resolved.

During a judicial mediation, the judge works with the parties with the aim of trying to reach a settlement between them. It usually lasts either half a day or a full day and often takes place via video call. The process is confidential and allows for creative solutions to be included as part of any settlement (including things which could never be awarded by a tribunal following a final hearing, such as references or apologies).

It is important that those attending the mediation have authority to make decisions on settlements so that the process can run smoothly.

If an agreement to settle is reached, it will usually be dealt with through Acas, with the parties agreeing and signing a COT3 agreement.

Judicial assessment

Judicial assessment is a process whereby an employment judge evaluates each party's respective prospects of success and possible outcomes in terms of remedy, while remaining impartial (an "evaluative process").

No details are provided in the guidance in relation to the number of cases where judicial assessment has been used, or the extent to which it has reduced the number of hearing days within a tribunal. Therefore, it is not clear whether judicial assessment as a concept has gained much traction, or the extent to which it is effective.

This is likely due to the fact that both parties have to consent to participate in a judicial assessment. A party which knows its case has weaknesses is unlikely to want that highlighted to the other party by a judge in advance of a full hearing, if no agreement is reached.

Dispute resolution appointments

The guidance states that around 200 dispute resolution appointments (DRAs) have been conducted so far during the pilot in the West Midlands region, saving around 1,000 sitting days in a tribunal. DRAs are now being rolled out across the UK.

Like judicial assessment, DRAs are an evaluative type of ADR. However, in contrast with both judicial mediation and assessment, DRAs can be scheduled without the consent of the parties. They are therefore intended to resolve cases with a historically low uptake of other forms of ADR, such as discrimination and whistleblowing cases, and tend to be utilised in longer cases with final hearings listed for six days or more. However, while parties can be compelled to attend a DRA and must generally co-operate with a tribunal as well as each other throughout the process, they are not bound to follow the judge's recommendation after the conclusion of the appointment.

As they have been introduced quite recently, the full impact of DRAs remains to be seen. As mentioned above, the range of target cases for DRAs is limited to longer cases in types of claim that tend to discourage the parties from other forms of ADR. In addition, the fact that parties are being "forced to the table" rather than opting to attend, in combination with the outcome of a DRA being non-binding, may create situations where the parties have no intention of reaching agreement, but end up wasting time and legal fees considering the point regardless.

That said, there appears to have been success in the initial pilot of DRAs and we will be keeping an eye on their use.

Conclusion

The new guidance is a helpful reminder of the key role that ADR plays in respect of resolving employment disputes. It is recommended that consideration is always given as to whether or not ADR is appropriate or necessary in all employment litigation cases.

Of course, we can assist with that. If you have any queries in relation to ADR, please do not hesitate to reach out to the team.

Sources

• Presidential guidance on ADR (July 2023)
• Acas Annual Report (2022 and 2023)
• Acas Annual Report (2021 and 2022)