Can the courts force a party to mediate?
On 29 November 2023, judgment was handed down in James Churchill v Merthyr Tydfil County Borough Council and others [2023] EWCA Civ 1416. This has been an eagerly anticipated judgment for litigators and mediators alike.
The facts are simple. The Claimant occupied a property within the district council area governed by the Defendant. The property was blighted by Japanese Knotweed. The Claimant complained to the Defendant about this and was told to make a referral to the Defendants internal complaints procedure. Instead, he issued proceedings in the County Court.
At an early stage in the claim the Defendant applied to stay the proceedings to enable the case to be referred to the complaints scheme. The application was heard by a Deputy District Judge, who held:
- He was not able to stay the proceedings; and
- To do so would be an unacceptable obstruction on the parties’ rights to have access to the court (known as the Article 6 right, as Article 6 of the European Convention on Human Rights establishes the right to a fair and public hearing).
In ordering this, the Court followed the key and well-established judgment of Dyson LJ in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576. In his judgment, Lord Dyson (as he went on to be, he also served a term as Master of the Rolls) stated “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the Court”. He went on to quote the 2003 version of the White book, stating “the hallmark of ADR procedures, and perhaps the key to their effectiveness in individual cases, is that they are processes voluntarily entered into by the parties in dispute”.
The Defendant appealed and the matter was referred to the Court of Appeal, to be determined by a very senior panel of judges, consisting of a senior civil appeals judge, the Master of the Rolls and the Lady Chief Justice.
The lead judgment was delivered by Sir Geoffrey Vos, the Master of the Rolls. The other two judges simply agreed with Sir Geoffrey’s judgment.
Given who gave the lead judgment, the outcome perhaps came as a surprise to no one – Sir Geoffrey is known to be a keen advocate of alternative dispute resolution as an alternative to the court process and has written widely and presented seminars on the subject.
He determined that he needed to consider 4 issues in the appeal. These were:
- Whether the judge in the County Court was right to think that Dyson LJ’s judgment in Halsey bound him to dismiss the application for a stay,
- If not whether the court can lawfully stay proceedings and/or order that the parties engage in alternative dispute resolution,
- If it can make an order, then how should the court exercise that discretion,
- Whether the judge in the County Court should, therefore, have ordered a stay in this case. This issue was not determined – by the time that the appeal was heard the case had moved on in a way that a court-imposed stay would not be helpful (although Sir Geoffrey still encouraged them to try and resolve their dispute if possible).
As to the first issue, Sir Geoffrey held that Dyson LJ’s comments on mediation in Halsey did not form a part of his judgment on the issue before the court in that case; they were in effect a set of observations (technically known as “obiter” comments). Accordingly they were not binding on the County Court.
With regards to the second issue, Sir Geoffrey conducted a lengthy examination on European Law (to see how the European Court of Human Rights dealt with the Article 6 right) and of the Civil Procedure Rules, which are the rules that govern how the civil courts operate in England and Wales.
He concluded that the Court already possessed a wide power to stay proceedings for almost any reason, so long as the stay furthered the overriding objective. The overriding objective is essentially an obligation imposed on the court and those using the court to deal with cases in a just and proportionate way. In Sir Geoffrey’s judgment, a stay for alternative dispute resolution, coupled with an order compelling the parties to engage in the process, would further the overriding objective. As a stay only delayed proceedings, it would not fetter the parties right to access to justice and so would not offend the Article 6 rights. However, an order must be made in pursuit of a legitimate purpose and be proportionate to achieving that aim.
As to the third and final issue that he determined, Sir Geoffrey held that the court must not use the power to stay the claim and order alternative dispute resolution as a way to impede a parties’ right to proceed to a judicial hearing in due course. Also, the right to impose a stay is a matter of judicial discretion, to be exercised on a case by case basis. Therefore, there will not be stays and orders compelling alternative dispute resolution in every case.
Practical Observations
The judgment represents a significant step away from the accepted position; namely that the court could not compel a party to mediate, but only encourage them to do so with the threat of adverse costs orders for those who unreasonably refuse to engage. Now the court can actually order the party to engage in a dispute resolution process; however the practical consequence of a refusal to do so is probably still an adverse costs order and not a strike out of the parties’ case – doing that would appear to be offensive to the article 6 rights. However, adverse costs orders seem a lot more likely where a party has acted in direct defiance of a court order.
Many mediators will be excited at the prospect of a deluge of mediations. However, there must be a concern that parties compelled to mediate may not be as engaged in the process as those who choose to be there. Mediation (but not all alternative dispute resolution processes) is confidential and without prejudice, and so how the parties conduct themselves at mediation ought never be mentioned to the court. Could mediation become a tick box exercise, to avoid costs sanctions sand incurring the wrath of the Court?
However, and on a more positive note, the judgment in Churchill probably means that parties should consider some form of alternative dispute resolution (most commonly, mediation) at the earliest possible stage in their dispute and most probably before they actually issue proceedings. The fact that a mediation has happened (but obviously not the detail of the discussions) probably then needs to be mentioned in open correspondence so that the court can be aware of the fact that there has been an attempt at alternative dispute resolution. Ultimately (and bearing in mind the passage from the White Book cited by Dyson LJ in Halsey) the process has more value if the parties want to be there, rather than have got to be there.
This encouragement probably also means that fewer disputes will actually result in proceedings ever being issued, let alone matters proceeding to trial. Sir Geoffrey has probably therefore achieved the aim of his judgement – but only time will tell.
Peter Brewer is a partner in our Commercial litigation team, and is also an accredited civil and commercial mediator. He mediates for parties directly and via the ADR Group. Get in touch with Peter by email or by calling 07799 347 840.
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