Has the door been opened to compulsory mediation?

The appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416; [2023] PLSCS 198 stemmed from a claim in nuisance brought by James Churchill against Merthyr Tydfil County Borough Council. He claimed Japanese knotweed had encroached from Merthyr’s land to his adjoining land. Following receipt of a letter before action, Merthyr invited Churchill to resolve the dispute by engaging in its internal complaints procedure. Churchill refused and issued a claim. Merthyr then sought a stay of that claim to enable the internal complaints procedure to be exhausted.  The application was heard by a deputy district judge, who held that he was bound to follow Dyson LJ’s statement in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 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”. His judgment was leapfrogged to the Court of Appeal, and such was its importance that various bodies, including the Law Society, the Bar Council, mediation providers and housing law associations were allowed to intervene and make submissions.  The issues The court considered the following issues: Was the judge right to think that Halsey bound him to dismiss the council’s application? If not, can the court lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process such as mediation? If it can, when can and should that power be exercised? Was Halsey binding? The Court of Appeal decided that Dyson LJ’s comments on mediation in Halsey were not a necessary part of his decision and were, therefore, not binding on lower courts, ie they were obiter.  Can the court lawfully stay proceedings for NCBDR? There have been many calls over the years for the courts to review Halsey and determine whether NCBDR truly overrides a party’s rights under Article 6 of the European Convention on Human Rights to a “fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”.  This was the crux of the issue in Churchill. The court looked at many authorities from various jurisdictions and concluded that a court does have the power to lawfully stay proceedings for, or order, the parties to engage in NCBDR. The question of the nature of the process for which a stay is ordered is considered in the next stage of the process as to whether the power should be exercised.  In the judgment, the court noted that this view is supported by the Civil Justice Council’s June 2021 report on Compulsory Alternative Dispute Resolution, which expressed that “any form of ADR which is not disproportionately onerous and does not foreclose the parties effective access to the court will be compatible with the parties’ Article 6 rights” and that “we think the balance of the argument favours the view that it is compatible with Article 6 for a court… to require ADR” (see EGi, Paving the way for compulsory mediation). When should the power be exercised?  Having decided that there is a power, it was held that, when considering whether to order the parties to engage in a form of NCBDR, a court should (while balancing the potential increased costs and/or delay which may result from the process) consider a wide variety of factors, including: Case-specific, for example the nature of the dispute, the stage of the dispute at which the order is sought; and Party-specific, for example resources, preferred means of resolving the dispute. The court shied away from providing a checklist of factors that will determine when the power can be exercised but noted that the following will have “some relevance”: The cost; Whether the dispute is suitable for the NCBDR process alighted on; Whether the parties are represented; The urgency of the case; The parties’ resources; and What sanction (if any) to apply to a refusal to engage in the process. This list is not exhaustive and each case will turn on its individual facts. As put by the Master of the Rolls: “The court should only 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.” Going forward It will take time for the decision to bed into the civil litigation system, and future cases will address the interplay between an order for an NCBDR process, the sanctions for non-compliance and a party’s Article 6 rights.  In our view, given the decision, lawyers and clients should have formed a reasoned view prior to the initial case management conference (or earlier in appropriate circumstances) as to whether the court should stay the claim until an NCBDR process has been carried out. With respect to property disputes it is reasonable to expect the volume of mediations to increase through court-ordered stays. Indeed, it is probable that over time it will become routine for judges to ask parties why the claim in question should not be stayed for a mediation.  Rupert Cohen and Jacqui Joyce are both members of the Property Mediators specialising in mediating property disputes. Cohen also appeared on behalf of the Law Society in Churchill Photo © Cytonn Photography/Unsplash