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Is Alternative Dispute Resolution now compulsory in legal proceedings?

The Court of Appeal has this week handed down its decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416. This was effectively a test case which centred on whether or not unwilling parties can, in appropriate cases, be forced to engage in a "non-court based dispute resolution process".

This case relates to an alleged infestation of Japanese knotweed in Mr Churchill’s garden, which was said to have migrated from the Council’s land. The Council made an application seeking a stay of proceedings as they argued that the claim should not be allowed to proceed until the claimant had engaged with its internal complaints process. The Court at the first hearing dismissed the application, on the basis that it said it was bound by a previous case (some readers may be familiar with the Halsey decision) and the Council sought permission to appeal this decision.

The Court of Appeal determined that parties can be compelled to engage in alternative, non-court based, ways of resolving their disputes. As above, it had previously been thought that the Courts did not have the power to compel parties to mediate, or otherwise engage in some other form of dispute resolution process.

However, the Court has expressly acknowledged the benefits of mediation for parties who want to resolve their differences in this way, which will generally be quicker and sometimes cheaper than Court-based solutions. In his judgment, the Master of the Rolls, Sir Geoffrey Vos clearly stated that “even with initially unwilling parties, mediation can often be successful.”

Does this mean that all parties will have to engage in ADR going forward?

In short, the answer is no. It is still not the case that mediation is actually compulsory in all cases, although this judgment is certainly a step towards mediation and other forms of ADR becoming more fully embedded in the litigation process.

The judgment states that the staying of proceedings for ADR, or the court ordering such, is dependent on not impairing the “very essence of a claimant’s right to proceed to a judicial hearing and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at a reasonable cost“. However, beyond that, the Court expressly declined to lay down fixed principles as to what would be relevant to determining whether or not the Court should order a stay of proceedings for ADR to take place.

The ruling went on to say that it should be left to the discretion of the judge dealing with the matter to decide if it is appropriate, based on the individual facts of the case, to make such an order. Similarly, the method of any ADR ordered will be entirely at the discretion of the Court.

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What does this case tell us about the future of litigation?

It is difficult to ascertain the full impact of this judgment at this stage, but it does suggest that there will be a further shift within the litigation process including:

  1. More cases will be filtered through an internal complaints process or a form of ADR either at a pre-action stage or early into proceedings.
  2. Perhaps a similar process to that currently in place for all Small Claims in the County Court (whereby claims are referred to the Court’s Small Claims Mediation Service)being rolled out across higher value claims in the not so distant future.
  3. Mediation can be integrated more effectively into the civil justice process in more cases, which will give parties the opportunity to resolve their disputes in a more cost-effective and timely manner. The hope would be that this will ultimately free up Court timetables for those more complex and serious matters which are deemed inappropriate for ADR and/or which require determination by the Court;
  4. A potential concern that if parties do not have a genuine interest in mediating, then ultimately settlement will not be achieved, and meditation will then simply be an additional set of costs for the parties to bear. Although guidance from the Court of Appeal suggests that the likelihood of success of ADR will be a relevant factor when weighing up whether it is appropriate to order compulsory ADR (such that, if a case is obviously doomed not to settle, the Court is unlikely to force the parties to mediate).
  5. A changing attitude of previously unwilling participants in ADR to acknowledge the benefits of resolving appropriate claims outside of the Court process.

How can Ward Hadaway assist you?

In the evolving landscape of litigation and ADR, the recent Churchill v Merthyr Tydfil ruling highlights the growing importance of skilled mediation. Our commercial litigation lawyers are not only experienced in navigating these changes but also uniquely positioned with members who are qualified mediators. Whether you need robust representation in ADR proceedings or are considering mediation as a pathway to resolving your dispute, our team is equipped to offer tailored support.

If you require assistance from our highly experienced team, then please do contact us.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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