This week the Court of Appeal heard a case that could have far-reaching implications for the way civil disputes are resolved. In Churchill v Merthyr Tydfil County Borough Council, the appeal court will finally have its say on the issue of whether a party can be compelled to mediate.
As Lady Justice Andrews put it in November last year when the Court of Appeal agreed to hear the appeal: ‘This case raises an extremely important issue relating to access to justice, namely whether a claimant who unreasonably refuses to engage in ADR in breach of the requirements of the Practice Direction (Pre-Action Conduct and Protocols) can be precluded from bringing or advancing a claim in court.
‘The court will need to consider whether, and if so to what extent, its decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 is affected by the Practice Direction… which came into force 11 years later.’
This is the big moment that the mediation industry has been waiting for – to finally knock down the Halsey ruling, an annoying stumbling block in which the Court of Appeal ruled that compelling parties to mediate would breach their right to a fair trial under Article 6 of the European Convention on Human Rights. Three mediation bodies (the Civil Mediation Council, Chartered Institute of Arbitrators and Centre for Effective Dispute Resolution) joined forces and were granted the right to intervene in Churchill. They submitted written arguments as to why Halsey, which they see as a ‘thorn in the side’ of mediation, should be set aside.
If the Court of Appeal decides to do just that – giving more power to judges to order parties to engage in alternative dispute resolution before their case can move forward – this will be in keeping with the highly romantic mood music coming from both the government and the judiciary towards ADR in recent times. This summer the Ministry of Justice set out plans for automatic referral to a free hour-long mediation session for small claims worth £10,000 or less. In July 2021, a report by the Civil Justice Council commissioned by master of the rolls Sir Geoffrey Vos concluded that mandatory ADR did not breach Article 6, and could be made compulsory ‘subject to a number of factors’. Endorsing the report, the MoR repeated previous comments that ADR should no longer be viewed as ‘alternative’, but as an ‘integral part’ of the dispute resolution process. So in a justice system that is overburdened and under-resourced, ADR seems to be just the knight in shining armour that judges and ministers are looking for.
Tempting as it might be for judges to dump their caseload on to mediators and others, forcing parties to go through ADR processes – even if they retain the right to refuse any deal offered and continue on to court – is not unproblematic. The most obvious point is that for parties dead set against mediation and where no settlement is therefore achieved, ADR simply adds another layer of cost. There is also a valid question as to whether mediated settlements (which are usually confidential) are always as fair as whatever a judge would have ordered – particularly where the parties are not equally matched in power, experience or legal representation. The mediator may receive a tick in the box for ‘successfully’ concluding an agreement, but was it actually a good deal for both parties?
Returning to Churchill, there is another aspect to this case that somewhat muddies the waters in relation to mandatory ADR. Churchill is one of a surging number of nuisance cases being brought against local authorities alleging that Japanese knotweed spread from council land on to private landowners’ property. Merthyr Tydfil council (pictured) argues that by refusing to go through its own internal complaints process, the claimant refused to engage in ‘a form of ADR’. It says the claim should therefore be stayed and the claimant ordered to use its complaints process.
So the ADR procedure in question in Churchill is not an independent mediator; it is the defendant’s own procedure. Will the court conclude that this is a valid ADR option that the claimant must use? That could save local authorities a lot of money, but should it be considered a fair forum?
Pursuing the same logic, if the internal complaints procedures of public bodies are considered valid ADR routes that must be pursued, will this be extended to ombudsman schemes as well? If so, do such schemes have the resources to deal with what could be a sharp rise in claims heading their way?
Given that Churchill involves the council’s own complaints procedure, the Law Society, which is also intervening, has expressed ‘strong reservations’ over whether it is a suitable case to challenge Halsey. It points out that while ‘independent’ ADR will often be in parties’ best interests, and compulsory referral will not necessarily be unlawful in all cases, it would be better for such issues to be considered in the round rather than constrained by the individual facts of the case before the court.
There are many questions still to be answered, but it is clear that Churchill could significantly reshape the litigation landscape – not just for lower-value claims covered by various complaints procedures, but potentially for much larger cases too.
Rachel Rothwell is editor of Gazette sister magazine Litigation Funding, the essential guide to finance and costs.
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