In a key decision that will be of interest to all litigators, the Court of Appeal decided on 29 November that courts in England and Wales can force parties to engage in non-court-based ADR processes – provided that doing so is proportionate to achieving the legitimate purpose of settling the dispute quickly, fairly and at reasonable cost. The case is Churchill v Merthyr Tydfil County Borough Council  EWCA Civ 141 and the judgment can be found here.
It will be interesting to see whether we’ll see an uptick in parties being mandated to engage in ADR processes in the wake of this judgment. But practitioners now need to be thinking even more carefully about whether ADR is appropriate for their clients. And if clients do refuse to engage in ADR, it would be wise to set out their reasons in full in writing, in order to discourage Churchill applications and to make sure that clients’ houses are in order in case applications are ultimately made.
The facts were straightforward. Mr Churchill bought a property in Merthyr Tydfil. He claimed that the adjoining property had a Japanese knotweed problem that was encroaching onto his property. The adjoining property was owned by Merthyr Tydfil council. Mr Churchill wrote a letter before action to the council threatening to sue. The council responded to ask why he had not used the council’s ‘Corporate Complaints Procedure’ and that, if he sued, the council would apply to stay the claim. Mr Churchill ignored this and sued anyway. The council applied to stay the claim.
The council’s application for a stay was initially dismissed. The lower court found that it was bound to follow Dyson LJ’s statement of principle in Halsey v Milton Keynes General NHS Trust , to the effect 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’. Churchill appealed.
The issues for the Court of Appeal were as follows:
|Issue for the Court of Appeal
|Was the lower court right to think it was bound by Halsey or was the passage relied on obiter?
|The passage in Halsey was obiter and therefore not binding on the lower court.
|Can the court lawfully stay proceedings for, or order parties to engage in, non-court-based dispute resolution processes? Does it have the power?
|Yes, provided it does not impair the essence of the parties’ article 6 rights to a fair trial, in pursuit of a legitimate aim, and in such a way that it is proportionate to achieving that legitimate aim.
|How should the court decide whether to stay the proceedings for, or order, the parties to engage in a non-court-based dispute resolution process?
|This was a question of discretion and many factors could be relevant. Examples given by the Bar Council that were cited with approval included the following, but the Court was clear that these are not exhaustive and there may be other relevant factors:
|Should the Deputy District Judge have granted a stay to allow the claimant to pursue a complaint under the Council’s internal complaints procedure?
|Had the first instance judge not considered himself bound by Halsey to refuse a stay, he would have ordered one. But the Court of Appeal found there was little to be gained by ordering a stay at the point the judgment was handed down because the dispute had become entrenched.