Clarity on orders to mediate

The Court of Appeal have handed down judgment in the case of Churchill v. Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416.

Challenge

The Court of Appeal was required to decide whether a Court had the power to order parties already engaged in litigation to engage in a dispute resolution process that was not within the court system and, if so, under what circumstances could this happen?

The Churchill appeal followed the previous decision in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002 where it was held that whilst the courts could encourage parties to engage in alternate methods of resolution, to order them to do so would in fact breach the parties’ right to a fair trial which is set down in Article 6 of the European Convention on Human Rights.

Background

The claim concerned Mr Churchill who had purchased a property in Merthyr Tydfil in 2015, Merthyr Tydfil County Borough Council (“the Council”) owns the adjoining land and Mr Churchill claimed that Japanese knotweed had caused damage to his property as it encroached from the neighbouring land. It was claimed the knotweed caused loss of enjoyment and a reduction in value to Mr Churchill's property.

In 2021 Mr Churchill engaged solicitors who sent a letter of claim to the Council, the Council responded asking why Mr Churchill had not made use of their Corporate Complaints Procedure (“the Procedure”) and stating that if he progressing to issue proceedings they would seek a stay from the Court together with costs.

Mr Churchill progressed to issue a claim without participating in the Procedure.

The Council made an application to stay proceedings as they had threatened.

First Instance

The Council’s application was dismissed with Deputy District Judge Kempton Rees (“the Judge”) observing he was bound by the Dyson LJ’s judgment in Halsey that: “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”.

Permission to appeal was granted and the Court of Appeal sought to resolve the points on whether the Halsey judgment did require the Judge to dismiss the application to stay proceedings.  If the judgment did not require the Judge to act in that way, can the Court compel disputing parties to engage in an alternate dispute resolution process?  If the Court can make such an order, how long should proceedings be stayed for? And finally, should the Council’s original application have succeeded?

Judgment

Sir Geoffrey Vos, Master of Rolls, who wrote the judgment, adjudged that the reasons given in Halsey which were relied upon by the Judge were not essential reasoning in that case and as a result they did not serve to bind the Judge to follow them.

The Court of Appeal decided that “the court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made does not impair the very essence of the 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 reasonable cost”.

Further the Court of Appeal , in handing down the Churchill judgment, have declined to lay down fixed principles as to what will be deemed relevant when future court consider the question of a stay of proceedings or an order that the parties engage in a non-court-based dispute resolution process. 

It is important to note that the Court of Appeal were firm on the point that each case is to be considered on its own specific factors and as a result litigators need to consider both litigation and other methods of resolution as a means of resolution to disputes.

Conclusion

David Vaughan, Commercial Dispute Resolution Partner, commented:

“The Churchill judgment is important in providing clarity to disputing parties in relation to the consideration of alternate means of resolving disputes.  The judgment clarifies the role the courts can play in assisting parties to see utilise such methods and also neatly combines ADR with the more formal court process.

“Ultimately the judgment reinforces the message that mediation and other such methods of dispute resolution hold as much weight as the legal process in seeking an agreeable conclusion to a dispute”.

For more information on Dispute Resolution, please contact Katie Byrne, Tom Barnard or David Vaughan in our Commercial Dispute Resolution team.