To mediate or not to mediate, may no longer be the question
From 1 October 2024, the CPR was amended to allow the courts to order or encourage parties to use ADR.
ADR is any alternative way of resolving issues or disputes between parties which aims to avoid determination through the formal court process. ADR is usually cheaper, faster and less adversarial than the court process, which is increasingly being seen as costly and time-consuming. ADR includes mediation, expert determination, without prejudice meetings and negotiations.
ADR was seen as discretionary within the civil courts, although ADR is already mandatory in some arears, i.e. family and employment. Currently in disputes about land, breaches of contract and the like, it is for the parties to decide if they participate in ADR, with the court’s powers limited to imposing costs sanctions on a party who unreasonably refuses to participate in ADR.
The changes follow the Court of Appeal’s judgment in James Churchill v Methyr Tydfil Borough Council [2023] EWCA Civ 1416 (“Churchill”), which held that the court could stay proceedings or order parties to "engage in a non-court- based dispute resolution process" so long as:
1. It does not impair the claimant’s right to proceed to a judicial hearing.
2. It is proportionate to the legitimate aim of settling the dispute fairly, quickly and at a reasonable cost.
In Churchill, the court was asked to consider a claim for damages as a result of damage to the Claimant’s land caused by Japanese Knotweed. Japanese Knotweed had been present on the Defendant’s land for many years and had historically been treated by the Defendant. The Court of Appeal was asked to adjudicate on the Defendant’s application to stay the proceedings for ADR. The Court of Appeal decided that a 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.”
Mandatory ADR is unlikely to be divisive with most solicitors already advising their clients to engage in ADR from an early stage, in order to save themselves time and money. However, there is now a clear signal from the court that ADR is more important than ever and determination of claims at trial should rightly be reserved for the limited number of claims for which ADR does not result in compromise.
Contact Tom to discuss this further.
