Alternative Dispute Resolution: The recent judgment made in Churchill v Merthyr Tydfil

Alternative Dispute Resolution (ADR) is an important part of the legal process for the claimant, defendant and the court.

ADR provides opportunities to settle a claim at any given point and is one of the main ways claims are settled without going to trial. There are many forms in which ADR can take place, for example:

1. Mediation;
2. Joint settlement meetings;
3. Arbitration;
4. Neutral evaluation; or
5. Ombudsmen schemes

The advantages of engaging in ADR are as follows:

1. Costs are saved;
2. Time is saved in progressing the claim and preparing for trial;
3. The claim may not become public, protecting the privacy and reputation of both the claimant and defendant;
4. Claimants can sometimes achieve better results for their clients given that the claim is not in open court;
5. The stress of being involved in lengthy and protracted litigation may fall away; and
6. The solutions which the court cannot order can be agreed between the parties. 

The court’s view on ADR prior to judgment

The overriding objective in Part 1 of the Civil Procedure Rules encourages parties to engage in ADR where appropriate. Historically, there have been occasions where parties have been penalised as a result of their failure to engage in mediation or ADR ahead of trial. Where parties refuse to engage in ADR, penalties may come in the form of costs.

In July 2023, the Ministry of Justice outlined the compulsory introduction of mediation to the non-injury small claims track.  It offers parties a one-hour free telephone mediation and court-appointed mediator. This was not mirrored throughout the legal system and accordingly higher value claims were not subject to the same expectations. 

A significant case that commented on this point until recently was Halsey v Milton Keynes General NHS Trust [2004] EWCA 576. This outlined that parties should be encouraged to engage in ADR where possible, but that introducing it as a compulsory measure would be ‘an unacceptable obstruction to the right of access to the court’ in breach of Article 6 of the European Convention of Human Rights. Accordingly, and since this time the court was not able to enforce ADR, however they have continued to strongly recommend that parties engage in the process.

Prior to Churchill, there was a significant gap where ADR was recommended by the court, but there was limited recourse in the way of sanctions other than costs. In many cases, the court would use its discretion as to whether ADR was appropriate, however if parties were not committed to engaging then there was little in the way of enforcement.  The Halsey judgment furthered the argument that ADR should not be made compulsory, which subsequently risked protracted and costly litigation. 

The recent judgment in Churchill v Meythr Tydfil County Borough Council [2023] went further to address this gap in compulsory ADR and has provided parties with more clarity as a result paving a new way to approach ADR from here there on.  

Churchill v Merthyr Tydfil

The case of Churchill v Merthyr Tydfil provides a recent judgment confirming that the court can order parties to engage in ADR.

In this case, the claimant had brought a claim against the local authority for damage to his property caused by Japanese knotweed which had encroached on to his property from neighbouring land that was owned by the council. The claimant brought an injunction to stop any further damage occurring.  The claimant informed the council, who asked the claimant to instead engage in their complaint’s procedure. The claimant did not engage in the complains procedure and proceeded to bring a claim against the council.

In the first instance, the Judge found himself bound by the judgment made in Halsey v Milton Keynes General Hospital NHS Trust.

Upon the case being heard in the Court of Appeal, Master of Rolls Sir, Geoffrey Vos found that the court can lawfully stay proceedings and order the parties to engage in a non-court-based dispute resolution process, so long as it 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.”

The court refused to provide fixed principles as to what factors will determine whether the alternative process is appropriate. Sir Geoffrey Voss stated: “I do not believe that the court can or should lay down fixed principles as to what will be relevant to determining those questions… 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."

Without fixed principles, discretion needs to be applied and the facts considered on a case-by-case basis. Relevant considerations should be proximity to limitation and whether resolution through alternative means provides a realistic prospect of resolution. 

In conclusion, it has been determined that the court can impose a stay of proceedings where appropriate, and that ADR can be ordered by the court.

The impact on future cases

The judgment made in Churchill should cause parties to consider ADR before bringing a claim given that the civil courts have the power to stay proceedings whilst the parties engage in the process. We may see more judges strongly suggesting or ordering that the parties engage in ADR.

Possible risks of this may be that internal complaints procedures could give bias towards defendants, and this may be something that claimants should be alive to when progressing through these processes.  Increased engagement with complaints procedures may in turn bring increased delays with response times and thus increased frustration from claimants. 

However, the utilisation of ADR will no doubt go some way to reducing the increasing costs of litigation and the lengthy time to resolution.

Any updates to the Civil Procedure Rules are awaited, and any such changes may bring around further clarification as to the process pre-litigation. 

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