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There are many forms of alternative dispute resolution, such as mediation, arbitration, and adjudication. One form that business owners may not be aware of is Early Neutral Evaluation (ENE).

In this article, we will discuss ENE and how it can provide a quick, cost-effective way to resolve your small business commercial disputes in any subject matter.

What is early neutral evaluation?

Early Neutral Evaluation (ENE) aims to provide parties to a dispute with an objective and realistic evaluation of their case. The information obtained in an ENE forms the framework for negotiations.

Neutral evaluation is a process wherein a neutral third party, hears the presentations of the disputants, and after the cross-examination then provides his opinion and legal advice regarding the dispute. 

An independent and impartial evaluator is appointed to evaluate the facts, circumstances and key issues of the case and then renders an insight about the same.

ENE is:

  • Voluntary
  • Non-binding
  • Confidential

An ENE is conducted without prejudice, meaning that what is discussed during the process cannot be used as evidence in court without consent.

No decision is reached via ENE, and legal issues are not resolved. Instead, the process provides an opportunity for both parties to have their side of the dispute analysed by a neutral expert, suitably qualified person so they can attempt to reach an agreement outside of court.

When can an early neutral evaluation be used?

Early Neutral Evaluation is typically used in the beginning stages of a dispute. It is highly valuable in situations where several preliminary issues must be decided before a matter can proceed to trial. ENE provides an opportunity to determine the problems outside of court, saving time, resources, and money.

In a commercial dispute, you and the other party can use ENE as a stand-alone dispute resolution method or as part of a package. For example, ENE is followed by arbitration.

Who can be appointed as an evaluator?

It is up to the parties to appoint an evaluator. A barrister or Queen’s Counsel specialising in the law related to the dispute that is selected.

You can also pursue ENE through the Technology and Construction Court (TCC) and the Commercial Court. If you choose this route, a judge will act as the evaluator.

What are the benefits of early neutral evaluation?

The benefits of ENE include:

  • Central issues in dispute can be identified and clarified
  • The process is quick
  • Often it provides all sides with a reality check
  • It will identify weaknesses in a party's case and evidential gaps
  • Parties will have a chance to comprehend the risks of litigation
  • It may facilitate settlement discussions if parties are encouraged to move towards a realistic starting position
  • The process may narrow the issues and focus on the critical aspects of the case

What are the risks of engaging in early neutral evaluation?

All processes have their pitfalls. The risks of ENE include:

  • The required preparation may render the ENE very expensive when the dispute is complicated 
  • The process does not necessarily lead to a settlement
  • It can be difficult for one party to recover from a negative ENE evaluation which can compromise that party's negotiating position
  • The party that lost the case may say that the evaluator was not suitable to make the decision or did not spend enough time evaluating. At a trial, the judge will reach a different conclusion with the benefit of all the evidence. This may lead a party to better prepare its case in litigation, making it more difficult for the winning party to capitalise on the successful evaluation
  • The TCC and Commercial Court guides state that the judge conducting the ENE cannot take further part in the case if it goes to trial unless the parties agree otherwise. Therefore, ENE may be used to eliminate a particular judge tactically
  • The limitation period will continue running while the ENE process is ongoing. In disputes involving complex, multiple, and/or cross-jurisdictional matters, ENEs can go on for a considerable time

How does an early neutral evaluation work? 

If you and the other side in a dispute choose to engage in the ENE process, an ENE agreement will be drawn.

This will set out the details of how the ENE will be run. The agreement will confirm matters such as:

  • Whether the process will be confidential and privilege
  • How the ENE will be conducted
  • The role of the evaluator
  • Timescales
  • Documents which each party are to produce
  • The neutrality of the evaluator
  • The evaluator’s fees
  • Whether the evaluator can consider matters outside of what is presented by the parties

There is no set procedure for ENE – you and the other party are free to decide how the process will run. 

Furthermore, you can both choose to be represented by a solicitor in the hearing/s.

The flexibility of the ENE process provides an ideal setting in which parties to a dispute can take the first steps to clarify the specific points of the disagreement. This will facilitate working towards an early, non-contentious settlement.

 

Free Dispute Settlement Agreement template

 

Get legal assistance from LawBite

You must know your legal options, as well as your company's legal strengths and weaknesses if you are a business owner a facing commercial dispute or conflict. At LawBite, our expert dispute resolution solicitors can talk you through various options, including ENE and help you evaluate what might work best for you when a new dispute arises.

To speak to one of our experts in dispute lawyers about our legal services, book a free 15 minute consultation or call us on 020 3808 8314.

 

Additional resources

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.