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Early Neutral Evaluation

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04/11/2015

Early Neutral Evaluation (ENE) is a form of Alternative Dispute Resolution (ADR) whereby parties to a dispute appoint an independent person, perhaps a judge or another third party, often with expertise in the relevant discipline, to provide a non-binding opinion which evaluates the facts, evidence and law in dispute. The opinion helps the parties to understand and appreciate the strengths and weaknesses in their case and that assessment, in turn, helps the parties to negotiate a settlement. The process is usually non-binding and without prejudice and can combine the privacy and flexibility of negotiation with the assistance of an independent, and potentially an expert, evaluator.

ENE was pioneered in the US in the late 1980s, but it has, so far, been relatively under-used within England and Wales – particularly outside the Commercial and Technology and Construction courts. One reason for this might be a lack of clarity as to whether the process requires party consent and/or whether it can be ordered by the court; another might simply be a lack of general awareness and therefore an under-appreciation of its merits.

In a recent case, Seals v Williams [1], the High Court considered the question of the court’s power to direct ENE. Norris J referred to the court’s wide case management powers under rule 3.1 (2) (m) of the Civil Procedure Rules (CPR) and concluded that those powers allowed the court to order ENE. The judge also considered that for a judge to conduct ENE is part of the judicial function and does not depend upon party consent.

In 2013 the Chancery Modernisation Review Final Report recommended the development of judge-led ENE in Chancery proceedings and, as of 1 October 2015, Norris’ J’s views expressed in Seal have been codified into CPR 3.1 (2) (m) so that the rule, which is of general application to all civil proceedings, now specifically refers to the court’s ability to order ENE.

ADR can assist with the effective and efficient resolution of disputes. With its combination of privacy, flexibility and third party assistance, ENE (judge-led or otherwise) is likely to prove an increasingly popular and valuable tool for parties wishing to resolve their disputes without having to resort to or progress litigation. Please speak to any member of Walker Morris’ Commercial Dispute Resolution team if you would like any further information.

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[1] [2015] EWHC 1829 (Ch)

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