With alternative dispute resolution on the agenda, District Judge Russell James puts forward the case for the increased use of early neutral evaluation hearings.
This year is likely to see a resurgence in the push for greater use of alternative dispute resolution (ADR) in housing law, with Michael Gove, the levelling up, housing and communities secretary, pressing for those advising tenants in housing conditions claims to ‘always direct social housing tenants with complaints to the Housing Ombudsman’,
1‘Housing secretary shames three more failing social landlords’, Department for Levelling Up, Housing and Communities news story, 28 December 2022. For a response to this from Housing Law Practitioners’ Association co-chair Simon Mullings, see February 2022 Legal Action 8. and the Court of Appeal expected to revisit compulsory ADR, the decision in
Halsey v Milton Keynes NHS Trust [2004] EWCA Civ 576; [2004] 1 WLR 3002,
2See October 2004 Legal Action 21. and non-compliance with the ADR provisions of pre-action protocols in the leapfrog appeal of
Churchill v Merthyr Tydfil CBC later this year.
3This appeal has been listed to float on 27 or 28 June 2023. Against a backdrop of delays in the civil justice system
4See, for example, Civil justice statistics quarterly: July to September 2022, Ministry of Justice, 1 December 2022. and continued
legal aid advice deserts, the timing is particularly apt and it is important that practitioners with specialist knowledge of housing engage in and shape the debate.
This article is not intended to focus on the role of the ombudsman, which will no doubt be discussed in other forums in the months ahead, but instead considers the courts’ role in ADR and poses the question of whether there ought to be an early neutral evaluation hearing (ENE), similar to the financial dispute resolution hearing (FDR) in divorce law, as part of standard procedure in housing cases.
ENEs are expressly part of the Civil Procedure Rules 1998 (CPR) with r3.1(2)(m) providing the court with the power to ‘take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including
hearing an early neutral evaluation with the aim of helping the parties settle the case’ (emphasis added). The Court of Appeal in
Lomax v Lomax [2019] EWCA Civ 1467; [2019] 1 WLR 6527 described ENEs as ‘a step in the process which can assist with the fair and sensible resolution of cases’ (para 26) and being of ‘great value’ (para 29), and held that an ENE can be ordered even where a party may be unwilling to consent to one. Moreover, the Civil Justice Council has expounded their benefits and observed the success of the FDR,
5Compulsory ADR, Civil Justice Council report, June 2021. yet the use of ENEs in housing seems rare or non-existent.
Much of the current focus of ADR in a housing context concerns stages pre-litigation, such as the ombudsman or mediation. However, these have restrictions or face difficulties. Such difficulties include problems securing funding, advice and representation in an area of law that is often complex and technical, and tenants choosing not to or being unable to engage because their lifestyles are chaotic and disorganised (often symptomatic of the reason they are facing action) or because they are suffering trauma that impacts their ability to engage. Specifically to the two types of ADR identified, the ombudsman’s scope is limited, as are the remedies the ombudsman is able to offer. In respect of mediation, the involvement of a third party needs greater robustness than the facilitation a mediator can offer, especially bearing in mind the power imbalance in housing cases.
None of this is to minimise the potential of these forms of ADR, which undoubtedly have a place, but the aim of this article, instead, is to broaden the discussion of ADR options to encompass the ENE process as a potential option to meet some of these shortcomings. In addition, it is useful to widen the debate in a climate where ADR is very much on the agenda, so that all options are being considered in preference to specific forms of ADR being imposed without a full appreciation of the advantages and disadvantages of the choices on the menu.
An ENE in housing could, either with some minor amendment to CPR Part 55 or by simple exercise of the court’s case management powers in r3.1(2)(m), be listed at a first hearing in the same way that Family Procedure Rules 2010 r9.15(4) mandates the listing of an FDR at a first directions appointment. This, of course, begs the question: why? What benefits could an ENE bring? Is this not just another layer of delay and cost? These questions can be explored by reference to three common scenarios, but before doing so it may be helpful briefly to consider what an ENE in housing could look like.
A suggested procedure for housing ENEs
An ENE is, as the name suggests, held at the early stages of the court claim, but the fact that the proceedings have started means that, for those eligible, legal aid funding will be available, the parties will have hopefully engaged lawyers, and the respective cases will be clear. The parties will attend before a judge, who will hear brief argument from each side and give an indication as to their likely decision on the issues in dispute. The parties will then have time to consider the court’s indications and negotiate with the other side, before later returning for further indications from the judge, to explain that agreement has been reached and therefore seek an order to embody the settlement, or to obtain directions because it has not been possible to resolve the dispute. Properly organised, such a hearing has a focused but limited duration in front of the judge, but the parties have a much greater period to negotiate, with the benefit that if something additional arises, they can seek the further assistance of the court.
How might housing ENEs work in practice?
Turning to the three illustrative scenarios, the first example is a claim for possession in the private rented sector. Assume the landlord is bringing a claim pursuant to the procedure in Housing Act 1988 s21 and a challenge is brought to the validity of the notice, or non-compliance with the tenancy deposit provisions or with the other statutory requirements (eg, how to rent, EPC and gas safety). At an ENE, a court would give a view on any points of construction and could at least point out the strengths and weaknesses of the parties’ cases on the facts, as well as highlighting the financial and other risks of continued litigation. This would allow the parties to explore settlement, which may mean withdrawal of the notice, a new tenancy or an extended period to vacate, to name a few. Of course, it may be said that these can equally be satisfactorily achieved by both parties being represented, but if that is the case, it will not need to have reached the stage of an ENE at all.
The second potential scenario is a claim for possession by a social landlord based on allegations of anti-social behaviour. At an ENE, the court will not be able to resolve the disputed allegations, but often there will be independent, objective evidence such as cautions, convictions, injunctions or multimedia footage, and the court can address this and explore with the parties the realistic outcomes. In such cases, experience suggests that both parties can benefit from the input of a third party giving its views and assessment, leading to compromise and settlement. Moreover, if either party then unreasonably proceeds against an indication from the court – for example, that this was a case appropriate for a suspended possession order – this may have costs implications at the conclusion of the case (for the landlord) or impact the continuation of public funding (for the tenant) so that the limited resources of legal aid are not used where a sensible, reasonable proposal is on the table and those resources (both in terms of representatives' time and funding) could be used for other cases.
The third potential scenario is a case where a defence is raised pursuant to the provisions of the Equality Act 2010. In such cases, particularly disability discrimination cases, the ultimate outcome often depends on what more can be done by the landlord in conjunction with adult social care and/or the community mental health team to assist the tenant in sustaining their tenancy, or, on some occasions, involves moving the tenant to alternative suitable accommodation. In these cases, an ENE would have to await the receipt of medical evidence and may need to involve social services or mental health services. However, experience suggests that cases of the kind described are most effectively resolved by exploration, discussion and the implementation of alternative solutions.
This could be further facilitated by the attendance of those often crucial third parties at the ENE, with the ability to use a witness summons to secure their physical attendance and/or the production of documents such as a Care Act 2014 assessment, if they are unwilling to do so voluntarily, because the CPR specifically provide for the use of a witness summons (with the permission of the court) at hearings other than the trial (r34.2(4)(b)). Short evidence of what is actually being done, as well as what is being considered or proposed, could then be heard and feed into the parties’ settlement negotiations at court. Finally, an ENE in such cases also has the benefits of allowing the court a role before the trial, as well as, if successful, relieving an unwell occupier of the stress of preparing for a trial at which they could lose their home when other solutions to the problems exist.
The above examples are not intended to be exhaustive of the kinds of cases in which an ENE could prove beneficial. Indeed, they could be used to good effect in the full spectrum of housing cases, from unlawful eviction claims through to housing conditions cases and the multitude of possession claims. Regarding criticisms that an ENE as standard in all housing cases would add to the cost and delay that already exists, it is true that there is an additional cost for those who are represented, in that there is a further hearing, with proper detailed preparation for such a hearing being essential to its success. However, the actual ENE would be free, as compared with mediation, where a third-party mediator is required, and if the ENE proves successful, the savings of avoiding a trial will outweigh the costs of the ENE. Equally, there is no reason for an ENE to delay proceedings if listed, along with sensible case management directions, at the first hearing, and if the success of ENEs in this jurisdiction mirrors that of the FDR in divorce proceedings, the freeing up of court time where cases settle will reduce delay not just for the parties but all other court users, as a trial will not be required.
Conclusion
To the question posed at the outset of whether there ought to be an ENE hearing, similar to the FDR hearing in divorce cases, in all housing cases as a normal part of the standard procedure, the answer suggested by this article is in the affirmative. The FDR has been described as ‘outstandingly successful’ (see Lomax at para 14) and family law has similarities with housing law, such as the tensions on both sides and an increasing number of litigants in person. Moreover, as this article has sought to demonstrate, there are real potential advantages to the use of ENEs in housing law, as well as an ability to meet some of the difficulties faced by other forms of ADR.
It is hoped that this article may at least spark discussion and debate about this invaluable but underused form of ADR in the housing law jurisdiction, if not go further and encourage practitioners to actively promote this option in case management hearings. In the future, it may be desirable to consider whether minor amendments to the CPR could further facilitate and embed ENEs, and mandate their use as the Family Procedure Rules do with FDRs, but for now the CPR are adequately equipped to enable their use for those seeking to use ADR to try to resolve their claims in a more cost-effective and expeditious manner.