Compulsory mediation – the story continues

Judgment has now been given by the UK Court of Appeal in Churchill v Merthyr Tydfil concerning whether parties could be compelled to mediate or enter another form of non-court-based alternative dispute resolution (ADR) before bringing proceedings, and whether this would be inconsistent with Article 6 of the European Convention on Human Rights (ECHR) and a citizen's right to a fair trial including access to a court without restraint.

Reverse of the status quo

Halsey v Milton Keynes General NHS Trust set the precedent that the English courts can strongly encourage parties to mediate but not compel them to do so as this would breach their rights to a fair trial (Article 6 ECHR). 

However, Halsey was concerned with whether a successful litigant would face costs sanctions on the grounds of refusal to agree to ADR (and there were other factors to be considered in deciding whether such refusal was unreasonable). 

The court decided the passage from the judgment in Halsey whereby "to oblige unwilling parties to refer disputes to mediation would impose an unacceptable obstruction on their right of access to the court", and also violate Article 6 ECHR, was not a necessary part of the reasoning that led to the decision in Halsey and therefore they were not bound by it. 

Article 6 ECHR

The Court of Appeal therefore had free reign to decide for itself whether the court could compel mediation and whether to do so would be compatible with Article 6 ECHR. 

Following consideration of relevant cases from the European Court of Human Rights, pre-Brexit decisions of the Court of Justice of the European Union, and domestic case law, the Court of Appeal held that it does have the power to halt a claim or compel parties to go through ADR options, as long as this would not breach a party’s right to a fair trial under Article 6 ECHR, and if the order is proportionate and the parties are made to settle the dispute fairly and quickly. 

When will the court exercise this power? 

The Court of Appeal did not lay down fixed principles on when the court should order parties to engage in ADR, noting many factors may be relevant. It also stated that it “would be undesirable to provide a checklist or a score sheet for judges to operate”. However, various factors suggested by the Bar Council are likely to be of relevance, such as: (i) whether the parties are legally represented; (ii) the urgency of the case and the reasonableness of the delay caused by ADR; and (iii) the reasonable prospect of the claim being resolved through ADR, and reasons given for not wishing to engage in ADR (e.g. a recent unsuccessful attempt). 

The Churchill decision is part of a trend towards ADR processes effectively becoming a compulsory first step before litigation is commenced, provided the process is not unduly onerous and leaves the parties free to decide whether to settle or continue to trial. The decision is perhaps unsurprising given the recent announcement that all civil disputes up to GBP 10,000 will have a free mediation session integrated into the court process.

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Melissa Munday is a Managing Associate in Ward Hadaway's Commercial Litigation team. She works in general commercial dispute resolution, has over 20 year’s experience in her particular specialism of commercial, marine and insurance litigation and holds a Masters in Legal Aspects of Marine Affairs and Commercial Law from Cardiff University.