Courts Can Force Parties To Use ADR

Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (29 November 2023)

It is hard to overemphasise the significance of the Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council, which held that Courts could stay proceedings and compel parties to participate in alternative dispute resolution (ADR), also called non-court dispute resolution. The judgment could fundamentally change the process by which disputes are resolved, forcing even reluctant parties to participate in ADR before filing their claim in court or during court proceedings.

The facts of the case

After finding Japanese knotweed in his garden, Mr Churchill claimed against Merthyr Tydfil Council. The latter argued that Mr Churchill should have used non-court dispute resolution options, such as its internal complaints process, before bringing court proceedings.

The issue before the Court was whether a Claimant unreasonably refusing non-court dispute resolution can be prohibited from making a civil claim in the Courts and this would breach their rights under Article 6 of the European Convention on Human Rights (ECHR), namely the right to a fair trial.

Article 6 of the ECHR provides as follows under the heading “Right to a fair trial”:

1. In the determination of his civil rights and obligations …, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. …

The Court of Appeal’s decision

The Court of Appeal reconsidered the longstanding precedent of Halsey v Milton Keynes General NHS Trust [2004], which stated that parties could not be compelled to engage in mediation. The Court of Appeal deemed these remarks obiter (not binding on lower Courts) and out of step with current legal thinking.

Sir Geoffrey Vos, Master of the Rolls, who delivered the judgment, concluded that as long as it does not stop the Claimant from eventually taking their claim to court and is proportionate to the ultimate aim of settling the dispute fairly, swiftly, and cost-effectively, the Court could stay proceedings for, or order parties to engage in ADR. This effectively deals with any concerns that compelling parties to participate in non-court dispute resolution negates their Article 6 rights.

Regarding when it is appropriate to halt proceedings to let parties engage in non-court based dispute resolution, Sir Geoffrey stated that it was at the discretion of the Court.

“It would be undesirable to provide a checklist or a score sheet for judges to operate. They will be well qualified to decide whether a particular process is or is not likely or appropriate for the purpose of achieving the important objective of bringing about a fair, speedy and cost-effective solution to the dispute and the proceedings, in accordance with the overriding objective.”

Sir Geoffrey went on to say that “the court can stay proceedings for negotiation between the parties, mediation, early neutral evaluation or any other process that has a prospect of allowing the parties to resolve their dispute” (our emphasis). The latter part of this statement seems to support including internal ADR methods like the one proposed by Merthyr Tydfil Council.

What does the decision in Churchill v Merthyr Tydfil County Borough Council mean for the future of dispute resolution?

The Civil Courts in the UK are heaving with cases. To have any hope of clearing the backlog and regaining control of the system, fresh solutions must be explored. In July 2023, the former Conservative Government made mediation a key step in the Court process for small civil claims valued up to £10,000 (the Small Claims Track). And in August 2023, the Civil Justice Council published a review of the Pre-Action Protocols which proposed that all parties to civil litigation should be compelled to participate in ADR before filing Court proceedings. This is already the case in family law, with exceptions in place for cases where mediation would not be suitable, such as where there is a history of domestic abuse.

What about where parties do not want to participate in ADR? Sir Geoffrey was direct on this matter, stating:

“Even with initially unwilling parties, mediation can often be successful”

Although this is fine in theory, in reality, commercial claimants are likely to baulk at being forced to take part in ADR which they know will not succeed as this will ramp up legal costs and the time required to resolve the matter.

As time passes, we shall see how keen the Courts are to impose non-court based dispute resolution on parties, especially those who are reluctant to engage. In the meantime, contact us today if you need any advice on dispute resolution.

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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article, please contact 43Legal.