Early Neutral Evaluation (“ENE”)

Litigation by its very nature is an adversarial process which sparks emotions often in the form of anger, upset and frustration. It is natural for the parties to sometimes be led by these emotions and matters of principle, but if they become too entrenched in their own position it can create a barrier to settlement. 

This post/blog explores Early Neutral Evaluation which is a form of alternative dispute resolution (“ADR”) – an alternative way to resolve a dispute without having to go to Court for trial where the parties in the matter seek directions from the Court so that the case can be heard in front of a Judge. The Judge at an ENE evaluates the case by providing the parties with an opinion on the merits of the case. It should be noted that the opinion of the Judge and the process is non-binding, and the parties may choose not to accept the opinion of the Judge’s evaluation.

Often, the Judge’s opinion can form the basis for subsequent negotiations between the parties where the parties may then choose to consider seeking a without prejudice agreement.

A benefit of ENE is that it is generally cheaper than other forms of ADR such as mediation or arbitration. This is because, rather than appointing an independent mediator and paying them by the hour, your case is heard in front of a Judge and includes certain aspects similar to a trial such as the Judge listening to each party’s submissions.

Furthermore, because you are usually provided with an opinion from a Judge, the process is intended to ensure that the parties have a realistic view of the merits of their case before extensive  legal costs are incurred. Parties may feel that although the opinion is not binding, due to the formal setting of being in the presence of a Judge, it can often sway both parties to come to an agreement. The process of a Judge providing an opinion can also be quicker than mediation because ENE puts each parties’ position into perspective which can sometimes take longer to achieve in mediation, depending on the willingness to cooperate and communicate with the other party.

ENE can be effective in disputes that involve complex legal or technical issues given that the opinion is provided from by a Judge, retired judge or counsel who will, have the knowledge of the fact, information and skills required to be able to conduct the ENE as well as having the expertise of the disputed area. ENE is usually considered at an early stage of the dispute, often once court proceedings have been issued. It is typically considered at the first case management conference and when you are looking to seek directions from the court. It is encouraged to consider ENE in the beginning stages of a dispute as it provides an opportunity to determine the problems outside of court which can save time, resources and money.

However, evaluations can be sought by the parties at any point up until trial and depending on the type of case involved, ENE can often be appropriate after experts have produced their report.

Due to ADR being encouraged by the courts throughout the litigation process, the consequence for unreasonably refusing or failing to engage in ADR can include costs sanctions. Costs sanctions can apply even if you are successful in the ultimate litigation because the overriding objective in Part 1 of the Civil Procedure Rules provides an obligation on the court to manage cases actively which includes encouraging the parties to use a form of ADR if the court considers it appropriate to do so and even if the other side’s attitude is uncompromising.

Here are our Top Ten Tips when considering whether to participate in Early Neutral Evaluation

1. Understanding the disputed areas – This includes understanding whether the disputed issue is complex. If it is, then it can be helpful to participate in ENE  as it is valuable to have an  opinion from a Judge  on the merits of your claim.

2. Consider the stage of the dispute – ENE is often used at an early stage of the dispute but can also be used up to the point of trial, depending on the issues and complexity of the case.

3. “Non-binding” – The opinion produced by the Judge is generally non-binding and so it is important to consider whether this is something the parties are looking for or whether the parties feel having a binding opinion would be more beneficial when trying to reach an agreement.

4. Affordability – As discussed, ENE can generally be cheaper than other forms of ADR such as mediation and arbitration so can be more suitable if you are looking for a cheaper alternative.

5. Formality – Compared to other forms of ADR such as mediation, the formality of being in front of a Judge may deter people from considering ENE. However, the process of ENE is made in a formal way to help parties understand what the procedure at trial may look like and can be beneficial in determining whether the parties would rather settle or proceed to trial.

6. Expertise – The Judge will often have relevant expertise to the area of dispute. This may be important when considering a form of ADR as you may feel this is something required to reach an agreement.

7. “Without Prejudice” and Confidentiality – Information discussed during the process cannot be used as evidence in court without consent. The Judge who deals with the ENE will not be permitted to hear the case should the case go to trial or deal with contentious applications to ensure confidentiality throughout the process.

8. Failure to engage in ENE – The court can impose cost sanctions on parties who unreasonable refuse or fail to engage in forms of ADR. It is important to consider if refusing, what the reasons are for refusing and implications for doing so.

9. Reality check – In an ENE a judge will provide their views on the strengths and/or weaknesses of your case.  You will have the unique benefit of a “non-binding judicial opinion” which can be a reality check for the parties involved. This insight can be an effective tool to an early settlement, especially if one party has an unrealistic view of the case. 

10. Be prepared and transparent– Submit your core bundle of documents early.  It is preferable that the parties agree what documents are included in this bundle.  

Litigation can be emotionally charged, often obstructing settlement. Early Neutral Evaluation (ENE) is a form of alternative dispute resolution (ADR) where a judge provides a non-binding opinion on the merits of a case. ENE is typically less expensive than mediation or arbitration and helps parties realistically assess their positions early, promoting quicker resolutions. It’s particularly useful in complex disputes and is encouraged by courts to avoid extensive litigation costs. For assistance with ENE or other ADR methods, contact our dispute team here.