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Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, a decision of the Court of Appeal, issued on November 29, 2023, saw the Court unanimously overrule the seminal decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002.  The Court of Appeal held that the courts have power to order a stay of proceedings and order parties to engage in Alternative Dispute Resolution (‘ADR’) before, if applicable, continuing with the court process. In this commentary discussion is focussed on the effect of the decision, rather than outlining the underlying facts of Churchill which (in brief), arose following Mr Churchill sending a letter of claim to Merthyr Tydfil County Borough Council (the owners of the adjoining land next to his), in which Mr Churchill claimed the local authority had allowed Japanese Knotweed to encroach upon his land. The Council applied for a stay of proceedings, on the basis that Mr Churchill had not availed himself of the Council’s complaints procedure.

What of Halsey?

The court held that the passages in Lord Dyson’s judgment in Halsey, dealing with pre-trial ADR processes, were merely obiter dicta and “not a necessary part of the reasoning that led to the decision in that case.”[para 20] Therefore, that part of the Halsey judgment which had been thought to bar the courts from ordering parties to engage in ADR, is not binding. Previous concerns that compelling parties to engage in ADR would be a breach of Article 6, of the European Convention on Human Rights (‘ECHR’), which deals with the right to a fair trial, were addressed by the Court in Churchill, holding that a ‘proportionate’ [para 20] pre-trial stay did not impact on Article 6 rights.   

Is mediation beneficial?

The Court of Appeal in this case was compromised of very senior judges, including the Lady Chief Justice of England and Wales, The Master of the Rolls and Lord Justice Birss, Deputy Head of Civil Justice. The Master of the Rolls, Sir Geoffrey Voss, gave the leading judgment and outlined the importance of ADR observing at [para 59]:

“  "Experience has shown that it is extremely beneficial for the parties to disputes to be able to settle their differences cheaply and quickly. Even with initially unwilling parties, mediation can often be successful. Mediation, early neutral evaluation and other means of non-court-based dispute resolution are, in general terms, cheaper and quicker than court-based solutions."

Certainly, the authors would wholeheartedly agree, based on their experience. Further, the Centre for Effective Dispute Resolution (CEDR) states that the aggregate settlement rate is 92%, from their 10th Mediation Audit (2023). However, both the authors would highlight that in their experience, a high success rate depends not only on the quality and skill of the mediator, but also the preparation by the representatives.

What will be the effects?
The Civil Mediation Council (CMC), Chartered Institute of Arbitrators (Ciarb) and the Centre for Effective Dispute Resolution (CEDR) jointly intervened in Churchill with the aim of overturning the Halsey decision, which had long been seen by many commentators as an unsatisfactory and/or a misunderstood decision. The effect of Halsey had likely been to limit the degree to which ADR was used by those involved in litigation since then. Within the judgment in Halsey, Lord Dyson commented 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”.  As mediators and practitioners, our experience has been that not all cases brought before the courts till now will be amenable to resolution by ADR, as one of the fundamental principles being that the parties must agree to mediate.

One of the key issues, in Churchill was that Mr Churchill had not availed himself of the Council’s internal complaint system. The Court of Appeal said this “In this context, I should mention that we heard some argument about whether an internal complaints procedure of the kind offered by the Council is properly to be regarded as a species of ADR at all. That definitional issue seems to me to be academic. The court can stay proceedings for negotiation between the parties, mediation, early neutral evaluation or any other process that has a prospect of allowing the parties to resolve their dispute. The merits and demerits of the process suggested will need to be considered by the court in each case.”  [para 94]

The court did not lay down fixed principles as to how any court or tribunal may, decide whether or not to stay proceedings to allow for an ADR process to take place. It will (as often) depend on the circumstances in each case. What is clear is that any stay or order should not impair the claimants right to proceed to a judicial hearing and it is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost [at para 74]

It is well established that mediation offers the ability to resolve any dispute quickly, cheaply and (importantly) confidentially, when compared to traditional litigation. The costs of litigation are also increasing at a significant rate. Mediation in comparison offers significant cost benefits, can obtain a settlement that court cannot give the parties and a resolution which is legally enforceable. In that context it is a tremendous outcome that the Court of Appeal has allowed judges to direct that parties use alternative means of resolving their disputes. ADR complements the court system and greater use of ADR will take significant pressure off the Courts and allow judges to better deal with the volume of cases that are either unsuited to, or not settled by ADR.

The CEO of the Ciarb, one of the joint intervenors in Churchill observed:

‘ “This judgment confirms that integrating mediation into the civil justice system does not breach human rights. Private dispute resolution is an integral part of an effective justice system. Providing parties with access to mediation and other dispute resolution processes supported by qualified dispute resolution professionals, creates more opportunities for parties to reach a resolution appropriate for them.’

It Is of course too early to say how judges will exercise the discretion afforded to them by the decision in Churchill.  However, it is clear that other practical issues may arise if there is a significant increase in the use of certain ADR processes, such as mediation. From experience, although many legal practitioners will say they are familiar with legal mediation – some even declining to hear about the topic again, upon further discussion there is often some obvious confusion about what mediation actually is about, and the serious benefits it can bring. Some parties may find it difficult to obtain a sufficiently experienced mediator for their specific dispute. Many still are unfamiliar with the Civil Mediation Council, Ciarb and CEDR. Some clients may select upon price alone, without considering the ongoing legal costs that they are looking to save by having the dispute mediated by someone highly skilled in that particular dispute, with good prospects of settlement. Some are shocked that mediation is also not a regulated profession. Nevertheless, this is a significant decision which in our opinion will have a huge practical effect on dispute resolution in England & Wales and which of course is of persuasive effect in other common law jurisdictions. We look forward to seeing what the effects will be in practice.

4-5 Gray’s Inn Square Chambers has an experienced group barristers, mediators and arbitrators who act as counsel in mediations, arbitrations and adjudications (and other ADR processes). With a specialist practice group our members regularly sit as mediators, arbitrators and adjudicators in disputes across numerous jurisdictions.

For any queries as to the professional availability of 4-5 Gray’s Inn Square Chambers mediators, arbitrators and adjudicators please contact Deputy Senior Clerk Stephen Somerville on + 44 20 704 5252 or by email: [email protected]