What is Early Neutral Evaluation?

If you have ever been a party to a legal dispute, you may have encountered the concept of early neutral evaluation. Early neutral evaluation is a form of dispute resolution where the substance of the parties’ dispute is put in front of an independent adjudicator. The adjudicator (a judge or an industry expert) reviews the matter and delivers a non-binding opinion about which party has the stronger case. This article will explain early neutral evaluation in more detail. 

What is Early Neutral Evaluation (ENE)?

ENE is a form of alternative dispute resolution (ADR). ADR refers to several different processes available to parties in dispute that allow them to settle their dispute without involving the court. In other words, ADR is distinct from litigation. 

ENE involves an independent and impartial evaluator, which the parties agree to appoint to review the case’s merits. The independent evaluator will issue a non-binding opinion on which party has the stronger position. 

Is Early Neutral Evaluation Mandatory?

ENE is not mandatory. Both parties must agree to participate in the ENE. That said, the courts may require or compel the parties that, as a precondition to pursuing litigation, the parties must first submit to an ENE or another form of ADR. This is a relatively new procedure the courts have introduced. The purpose is to ensure the parties have exhausted all other dispute resolution avenues.

How Does Early Neutral Evaluation Work?

The primary purpose of ENE is to provide both parties with an appraisal. The evaluator is typically a qualified independent dispute resolution professional.

The evaluator may be a qualified judge offering ENE through the courts. For instance, ENE is usually available for parties that would otherwise be eligible to bring proceedings in the Commercial Court, a subset of the High Court, King’s Bench Division and reserved for high-value (>£1m) and complex claims. 

Alternatively, ENE might be provided by arbitration institutions. As with arbitration, the ENE will occur under the institution’s procedural rules. 

Finally, you might pursue ENE through an independent channel. Some senior solicitors, barristers, and active or former judges might offer ENE. 

What is the Procedure for Early Neutral Evaluation?

The exact procedure for ENE depends on who is providing the ENE. An ENE process through courts will differ from one provided through an arbitration institution or a private ENE provider. 

However. the general procedure usually involves parties:

• agreeing in writing to undergo ENE;
• negotiating and agreeing to procedural matters like timetabling and the venue of the ENE;
• providing written statements of their case to the evaluator; and 
• directing the evaluator as to which aspect of the dispute they wish for the evaluator to consider.

Then, the evaluator will:

• read the statements of the case or participate in an oral hearing; and
• produce a decision, usually in writing which may include reasons for the decision.

Is an ENE Decision Binding?

Typically, any ENE decision, including those issued by sitting judges, is not binding on the parties. However, the parties are free to enter into a binding agreement before the ENE that obligates both parties to accept the outcome of the ENE as final. 

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When Should I Use Early Neutral Evaluation?

ENE is suitable for any disputing parties. The parties can use ENE as the sole procedure for resolving disputes. Alternatively, ENE can be used with other ADRs, such as mediation. 

ENE is beneficial when there is a single issue in dispute, such as a matter of legal, technical, or commercial nature. Likewise, the parties to the dispute may find ENE helpful where:

• one party has a substantial advantage over the other party, especially in terms of resources and funding; 
• one party has an unrealistic expectation of success; 
• there is a preliminary issue that the parties need to resolve before they can proceed with another form of ADR or litigation; or
• the parties both wish to keep the matter confidential. 

Key Takeaways 

Early neutral evaluation is a form of alternative dispute resolution (ADR). The parties to a dispute voluntarily agree to put one or more issues in dispute before an independent evaluator. The evaluator may be a sitting judge or some other dispute resolution professional. The evaluation will consider each party’s position, usually set out in a written statement of the case, and issue a non-binding opinion about the strengths and weaknesses of each party’s case. This allows the parties to reconsider their position and work towards a negotiated resolution.

If you need advice regarding a business dispute, LegalVision’s experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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