Sanctions for Refusing to Engage in ADR Processes

Abstract This chapter studies the sanctions for refusing to engage in alternative dispute resolution (ADR) processes. The court can penalize a party who unreasonably refuses to comply with an order made by the court directing the parties to attempt to resolve the dispute by ADR or by directing them to take part in an out-of-court dispute resolution process; accept an offer made by the other side to attempt to settle the dispute using an ADR process before the issue of proceedings; or accept an invitation by the other side to use an ADR process during the course of litigation, or even after judgment and prior to the hearing of an appeal. The orders that the court can make include depriving the party of costs even if they are successful in the litigation; ordering them to pay some or all of the other side’s costs even if they are successful in the litigation; or ordering them to pay costs on an indemnity basis (an indemnity costs order). The most common sanction that is imposed for unreasonably failing to consider or use an ADR process to resolve the dispute is to make an adverse order for costs. Since the Jackson Reforms were implemented in April 2013, the courts have been more robust in penalizing parties who fail to consider or use ADR processes where it is appropriate to do so.