Contractual Clauses Requiring ADR Before Litigation – What Happens When They Are Breached?

The Court of Appeal recently delivered an important decision regarding the enforceability and effect of contractual dispute resolution provisions that oblige parties to engage in an ADR process before commencing proceedings. Of particular interest is the court's discussion of what remedy is appropriate where such a clause is enforceable and has been breached by a claimant starting litigation before engaging in the process: Kajima Construction Europe (UK) Ltd v Children's Ark Partnership Ltd [2023] EWCA Civ 292.

It is well established that such clauses can be enforced by the court, but only where the nominated ADR process is specified in enough detail to provide certainty as to the parties' obligations. In this case the process, which had been imported into a construction subcontract from the head contract, was found to be not workable in that context and unenforceable for uncertainty. To that extent, the decision is a reminder of the importance of such clauses