Although Early Neutral Evaluation (“ENE”) has existed as a settlement tool for some time, it has recently been brought back into focus by the High Court and by a change to the Civil Procedure Rules (“CPR”).
What is Early Neutral Evaluation?
ENE is an alternative dispute resolution method. It is usually without prejudice (i.e. it cannot be referred to in court proceedings) and non-binding. Whilst it can take a number of forms, broadly speaking it is a voluntary process which allows an independent neutral third party to give an objective view of the respective strengths and weaknesses of the parties’ cases. The idea is that the parties will then often take into account the evaluator’s views in trying to settle the case.
ENE can take place independently of court proceedings but the Commercial Court and Technology and Construction Court already include provisions in their respective Guides. When using court based ENE the parties can have a judge as evaluator and that judge then takes no further role in the proceedings. As with any alternative dispute resolution process it is not suitable for all claims and whether it should be considered will depend on the facts of a particular case including the amount at stake and the issues in dispute.
Why the recent focus on Early Neutral Evaluations?
In Seals and another v Williams  the High Court was asked to consider a proposal for it to undertake an ENE in relation to an Inheritance Act dispute.
Mr Justice Norris commended the suggestion of the parties’ representatives that the court be invited to undertake an ENE. He commented that the:
“advantage of such a process over mediation itself is that a judge will evaluate the respective parties' cases in a direct way and may well provide an authoritative (albeit provisional) view of the legal issues at the heart of the case and an experienced evaluation of the strength of the evidence available to deploy in addressing those legal issues. The process is particularly useful where the parties have very differing views of the prospect of success and perhaps an inadequate understanding of the risks of litigation itself.”
He also noted that in the Manchester and Birmingham District Registries of the Chancery Division ENEs were being adopted and the move is “warmly to be welcomed”.
Norris J commented that whilst the precise foundation for ENE in the Commercial and Technology and Construction Court Guides was unclear, he felt able to proceed on the basis of CPR 3.1(m) which allows the court to:
"take any other step or make any other order for the purpose of managing the case and furthering the overriding objective".
If there was any doubt over the court’s jurisdiction to allow ENE, this will shortly be overcome by an amendment to the CPR. With effect from 1 October 2015 CPR 3.1(m) will be amended to include the following additional words:
“including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case”.
As mentioned above, ENE is not a new concept. In our experience it is rarely suggested by parties as a settlement tool with mediation often seen as the favoured option. It therefore remains to be seen whether the forthcoming change to the CPR results in more widespread use by parties in dispute.
For more information about Early Neutral Evaluation or to find out more about how the Dispute Resolution team can help you please contact Rowan Turrall on [email protected] or 0118 925 7206.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.