Dispute resolution: judgment in Churchill finds in favour of court-mandated ADR

Rachael JohnsonFriday 1 December 2023

The UK Court of Appeal has found that parties to a dispute can be ordered by the court to engage in alternative dispute resolution (ADR). In a judgment handed down on 29 November 2023, Sir Geoffrey Vos, Master of the Rolls, states that ‘as a matter of law, the court can lawfully stay existing proceedings for, or order, the parties to engage in a non-court-based dispute resolution process’.

The judgment was handed down in the Churchill v Merthyr Tydfil County Borough Council case (Churchill). The case came before the UK Court of Appeal after Deputy District Judge Kempton Rees dismissed an application by Merthyr Tydfil Council to stay proceedings when a Mr Churchill made a claim against it. Churchill alleged that Japanese knotweed had encroached from council land onto his adjoining property, with detrimental effects.

The Council asked why Churchill hadn’t used its Corporate Complaints Procedure before making his claim and stated it would apply to the court for a stay in proceedings if he pursued the claim. Churchill did so, which prompted the Council to apply for a stay in proceedings.

Following the lower court’s dismissal of its application to stay the proceedings, the Council was allowed to appeal the judgment and the case was referred to the Court of Appeal because, according to the resulting judgment, ‘it raised an important point of principle and practice’.

The Court of Appeal judgment is significant because it finds that Deputy District Judge Kempton Rees was not bound by the findings of a previous judgment in Halsey v Milton Keynes General NHS Trust (Halsey) when deciding to dismiss the Council’s application to stay the proceedings. It says the parts of the Halsey judgment the judge referenced – which include the argument ‘it seems to us likely that compulsion of ADR would be regarded as an unacceptable constraint on the right of access to the court’ – are ‘not a necessary part of the reasoning that led to the decision in that case (so was not part of the ratio decidendi and was an obiter dictum)’.

Jane Colston, Secretary of the IBA Litigation Committee and a partner at Brown Rudnick in London, says that ‘the Court of Appeal’s decision in Churchill v Merthyr Tydfil confirms the integral role ADR and mediation plays in effectively resolving disputes’. She argues that by overturning the Halsey judgment and treating ADR positively, ‘the Court has both encouraged parties to think strategically when approaching complex dispute resolution and supported parties seeking to resolve disputes in a cost effective and fair manner’.

The Court of Appeal’s decision in Churchill v Merthyr Tydfil confirms the integral role ADR and mediation plays in effectively resolving disputes

Jane Colston
Secretary, IBA Litigation Committee

The decision comes against the backdrop of growing support for ADR in the UK and internationally. Geoffrey Vos, Head of Civil Justice in the country, had previously spoken in favour of ADR. In 2021 he welcomed a report by the Civil Justice Council that ‘concluded that parties can lawfully be compelled to participate in ADR’.

This trend is emerging across jurisdictions. For example, the Singapore Convention on Mediation entered into force in autumn 2020. The Convention is a multilateral treaty that offers a framework for enforcing and invoking international settlement agreements resulting from mediation. To date the Convention has 55 signatories, of which eight are parties to the Convention.

Italy already has experience of mandatory mediation. According to Federico Antich, Co-Chair of the IBA Mediation Committee and Founder of Studio dell’Avvocato Antich in Florence, ‘the Italian experience shows [mandatory mediation] can be done in a very easy way, in a very accessible way.'

In India, Section 6 of the country’s draft Mediation Bill 2023 provided for compulsory pre-litigation mediation in civil or commercial disputes before parties could approach a court or a tribunal. However, this provision was not included in the final Mediation Act 2023, notified in September. Instead, the final Act makes pre-litigation mediation voluntary rather than mandatory. For some, India has missed an opportunity to embrace the international trend of promoting ADR.

According to Neerav Merchant, Conference Quality Officer of the IBA Litigation Committee and Head of Disputes at Majmudar & Partners in Mumbai, making mediation mandatory would absolve the intent that mediation is based on the mutual consent of the parties to the dispute. He says mandatory pre-trail mediation was removed from the final version of India’s Mediation Act on the basis of recommendations outlined in the country’s Standing Committee report. In particular, the report advised that mediation should be voluntary because making it mandatory would amount to a denial of justice where parties are unwilling to mediate.

Merchant believes that pre-trial mediation being voluntary in India doesn’t go against the international tend of promoting ADR. ‘The courts still have a right to encourage the parties to mediate’, he says, ‘even if it’s not part of the contract’. He sees the Mediation Act 2023 as a significant step towards promoting ADR in India.

The experience in India highlights two important aspects of the debate surrounding compulsory mediation, which have also been central to discourse in the UK. One is that, as Merchant argues, mediation cannot be made mandatory because it’s based on voluntary participation. However, an alternative argument is that voluntariness can be preserved in mandatory mediation if parties are only compelled to come to the table and aren’t forced to settle, and where they still have the option to go to trial if necessary. In this case the client remains in control of the process and the parties voluntarily try to reach a settlement.

The second argument against making mediation mandatory is that it constitutes a denial of justice, as set out by India’s Standing Committee report. This was also one of the central arguments in the Halsey judgment, overturned by Churchill, which had dominated the debate over compulsory ADR in the UK. Those who counter this argument emphasise that what clients really want is to resolve their dispute and are less concerned about the method used.

Proponents of mediation suggest that it offers an important pause where parties can review the facts and the costs of the case. It’s a creative process that looks at all the options and encourages parties to think hard about their criteria for a win. Further, it can offer outcomes that aren’t available in the courts, such as an apology – which is sometimes what parties are looking for above all.

Making mediation mandatory raises awareness of it as an option, proponents also argue. It relieves pressure on the courts and treats judges as a precious resource. A judge will know that, if a dispute reaches them, it means all attempts to settle the matter out of court have been unsuccessful.

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