Will litigants be forced to engage in Alternative Dispute Resolution (“ADR”)?

The Civil Procedure Rules Committee is currently considering draft amendments to the Civil Procedure Rules (“CPR Rules”) which would enable the Court to order litigants to engage in Alternative Dispute Resolution (“ADR”). These proposed changes reflect the recent Court of Appeal judgment in Churchill v Merthyr Tydfil Borough Council [2023] (“Churchill”).

The Court of Appeal’s judgment in Churchill

The Churchill case started as a nuisance claim brought by Mr Churchill against Merthyr Tydfil Borough Council (the “Council”). Mr Churchill’s property bordered with property owned by the Council and, from 2016, Japanese knotweed had encroached onto his property, causing damage, and reducing its value. In response to the claim, the Council stated that Mr Churchill should have used the Council’s complaints procedure and that if Mr Churchill proceeded with his claim, they would apply to the Court for a pause of the Court proceedings to force Mr Churchill to use the complaints procedure. Mr Churchill commenced his claim in July 2021 and in response, the Council applied for a pause of the Court proceedings in February 2022. 

The Council’s application for a pause of the Court proceedings raised a question which has much wider implications - does the Court have the power to order a pause in Court proceedings to enable parties to engage in ADR?

The Court of Appeal has held that the Court does have the power, in appropriate cases, to order parties to engage in ADR. This judgment comes with the proviso that any such order must be “proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost”.

The judgment does not provide a list of fixed principles that the Court should consider, when determining if such an order ought to be made. It was noted in the judgment that many factors may be relevant and that “it would be undesirable to provide a checklist or a score sheet for judges to operate”.

The Court’s decision is consistent with the Government’s announcement in July 2023 of its plans to introduce compulsory mediation for small claims in the County Court up to a value of £10,000 (although it remains to be seen whether the new Labour Government will continue with these plans). But notably, the judgment in Churchill still allows for the Court to consider each case individually and to exercise its discretion as to what is appropriate on the facts of each case.  

Implications of these rule changes 

The decision in Churchill does not go as far to say that ADR is now a compulsory step in all Court proceedings. But in some cases, it undoubtedly can help in leading to quicker and more cost-effective dispute resolution. In the event that the Court does order that ADR, such as mediation, to take place, this does not require the parties to settle at or after the mediation and does not prevent the parties from being able to continue to trial if a settlement is not reached. Further, even if a settlement was not reached, mediation may, in some circumstances, allow parties to narrow the issues in dispute, ultimately leading to shorter and less costly trials.

The decision provides a reminder to parties, and practitioners, that both litigation and ADR must be considered when devising an appropriate strategy to resolve a dispute, no matter how complex the issues may be.