What did the Court actually say? What does it mean for mediation?

What Does the Judgment Say?

The Court of Appeal in Churchill has just given a positive answer to the question: Can the Court lawfully order parties to engage in “non-court-based dispute resolution” and given further consideration as to when it should do so.

The Judgment of Sir Geoffrey Vos, Master of the Rolls focused on three main questions:

1.     Was the Court bound by a previous Court of Appeal judgment in Halsey (which had previously been considered to be a foundation for the Court not being able to compel parties to mediate)?

2.     Can the Court lawfully (a) stay proceedings for, or (b) order parties to engage in, a “non-court-based dispute resolution” process? And

3.     If so, how should the Court exercise the power to make such orders?

1. The Court answered the first question firmly in the negative, concluding that the comments made by Dyson LJ in Halsey about compelling parties to engage in ADR were obiter (not part of the best/preferred justification for the conclusion reached). Halsey in fact merely gives guidance on costs principles relating to a failure to engage in ADR.

2. The bulk of the Judgment is concerned with the second question, in answer to which Sir Geoffrey Vos found, unequivocally, that the court does have the power to stay proceedings for, or order parties to engage in, a “non-court-based dispute resolution” process.

His reasoning makes clear that none of the parties/interveners in the case argued that the type of ADR being suggested was relevant to the question of whether the Court had such a power; the focus was on there being an impediment to a claimant’s right to bring and progress proceedings. This centred around the ECHR Article 6 ‘right to a fair trial’ and, having considered various other impediments (such as limitation periods, security for costs orders, arbitration clauses, and settlement procedures in other European countries’ domestic laws), Vos concluded that the power exists, but it must be exercised so as not to infringe Article 6.

Relevant considerations in that regard included whether the process would prevent a judicial determination (which was not the case with most settlement processes, unlike a security for costs order or limitation period) but merely delayed, rather than prejudicing a right to sue, whether there would be substantial delays, and whether the process would pause any limitation period. Attention was drawn to the Civil Justice Council’s June 2021 report in which it concluded that ADR which was (a) not disproportionately onerous, and (b) did not foreclose access to the Court, would not infringe Article 6.

3. Having concluded that the power exists, the Court declined to give guidance on how that discretion should be exercised.

Vos was only willing to go as far as making the following comments:

·       The characteristics of a particular method of non-court-based dispute resolution process will be relevant to the exercise of the Court’s discretion as to whether to order or facilitate it. (Para 60 of the Judgment)

·       The court should consider in each case the merits and demerits of a particular process in that particular case.

·       There would be no fixed principles laid down. No checklist or score sheet was to be provided, as judges would be well qualified to determine what was appropriate in each case.

·       In exercising the discretion, the important objective would be to “bring about a fair, speedy and cost-effective solution” in accordance with the CPR’s Overriding Objective.

In Churchill itself, the Court made no findings about the specific process that the Council wanted Mr Churchill to engage in (which was an internal complaints procedure), but Vos did make some observations indicating that the process may not be appropriate for a dispute of the kind raised by Mr Churchill.

What does it mean for mediation?

What everyone wants to know, is whether Churchill means courts can force parties to mediate…

Firstly, it is important to remember that this case isn’t about mediation. As set out above, the Court has been careful to frame the power as one related to “non-court-based dispute resolution”. This can include ENE, FDR Hearings, negotiation between the parties or “any other process that has a prospect of allowing the parties to resolve their dispute.

Secondly, the power that has been found to exist is also not expressed as narrowly as forcing/ordering parties to participate in some sort of ADR. The question, and in turn the power, was carefully framed as whether the court can lawfully stay proceedings for, or order parties to engage in, a non-court-based dispute resolution process. There is a big difference between ordering parties to engage in ADR and merely allowing a stay for the possibility of it, against the wishes of one party who seeks to progress the court timetable more quickly.

In addition, by giving no guidance as to how or when that power should be exercised by judges, the case does not really represent a big move towards anything becoming compulsory. It seems to fit within the general trend of encouragement for ADR, and neatly removes the Halsey problem, to clear the way for the possibility of such an order by a Judge, but it is still not an example of a court setting a precedent of doing so!

We are therefore left to debate the pros and cons of compulsory mediation some more. My own views on the subject are, unusually for me, equivocal. Anyone who has worked with me will know that it would be hard to find a greater advocate for mediation than me. I work (as counsel and a mediator) almost exclusively in contested estates and contested trusts cases. Nearly every case I see involves a family, or those who used in some way to consider themselves family, mostly with loss, bereavement, and anger at the heart of them. The individuals I meet feel broken, they need resolution and healing, and the Court system will rarely make things better; it is not set up to meet their needs. Mediation, however, can provide a valuable opportunity for all of them.

As a mediator in my area of work I am lucky to be able to tell clients that almost all mediations result in settlements; that is my overwhelming experience and part of the joy of my job. However, I do worry that part of the reason for that is people coming to the process willingly, wanting to be there, wanting to engage in it, and to have it work for them. Would the job and the reality of mediation change for the worse if there were an influx of parties who were being forced to be there instead? Would settlement rates be reduced, in turn reducing the comfort and confidence we can offer those who genuinely do want to engage in it? I do think that there is a real risk of compulsory mediation, if it ever happens, changing the landscape of mediation as we currently experience it.

On the other hand, if it does happen, I will try to embrace it as an opportunity to access and provide services to a wider pool of people. As Vos himself said in Churchill, “even with initially unwilling parties, mediation can often be successful”.