As of 1st October 2024, courts in England and Wales will have the authority to impose legal costs on parties who fail to participate in non-court dispute resolution processes in cases under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) and the Inheritance (Provision for Family and Dependants) Act 1975, as reported by STEP.
This new power aligns with existing financial remedy proceedings, where similar sanctions have been in place since 29 April 2024, under Family Procedure Rule 28.3(7).
This amendment allows courts to depart from the usual “no order as to costs” principle when a party unjustifiably refuses to attend alternative dispute resolution (ADR). Previously, the rule applied only to financial remedy cases and did not cover other proceedings, such as Schedule 1 of the Children Act 1989, interim applications, or appeals, which follow a modified version of Civil Procedure Rules (CPR) Part 44. It also excluded claims under TOLATA and the 1975 Act, both governed by the full application of CPR Part 44.
However, the Court of Appeal’s recent ruling in Churchill v Merthyr Tydfil CBC [2023 EWCA Civ 1416] has prompted changes to the CPR. The judgment overturned the precedent set by Halsey v Milton Keynes General NHS Trust [2004 EWCA Civ 576], which held that requiring ADR would breach the right to a fair trial under Article 6 of the European Convention on Human Rights. The ruling clarified that courts can, in fact, compel parties to participate in ADR.
Although family courts will not have the power to directly order ADR, they can now issue cost penalties for parties who unreasonably refuse to engage. This effectively brings TOLATA and 1975 Act cases under the broader framework encouraging ADR participation.
Barristers Nicholas Allen and Rhys Taylor highlight the important distinction between ‘engage in’ and ‘attend’ non-court dispute resolution in Family Procedure Rules. While the word ‘attend’ was chosen to avoid overstepping into how diligently parties engage in ADR, which could risk breaching without prejudice privilege, ‘engage in’ leaves room for interpretation. ‘Attend’ remains a more straightforward, factual requirement.
