Last week the Court of Appeal was asked to consider a question many independent dispute resolution bodies have wanted answered for over 20 years, following the decision in Halsey v Milton Keynes NHS Trust [2004] EWCA 576 ("Halsey").
Background
The case of Churchill v Merthyr Tydfil County Borough Council ("Churchill") is born out of a nuisance claim concerning Japanese knotweed. The appeal is being heard in the Court of Appeal because the claimant refused to engage in the defendants' Internal Complaints Procedure ("ICP"). It is the defendants position that their ICP is a form of alternative dispute resolution. The defendant appeals the order of DDJ Kempton-Rees dated 12 May 2022 sitting in Cardiff County Court where he refused an application to stay the proceedings requiring the claimant to engage in the ICP. The judge expressed the view that he would have granted the stay but for the precedent set in Halsey.
The Court of Appeal invited interveners to this case. In June 2023, the Civil Mediation Council ("CMC"), the Chartered Institute of Arbitrators ("CIArb") and the Centre for Effective Dispute Resolution ("CEDR") announced they would be providing written interventions in the case. Other organisations such as The Bar Council, Law Society, Housing Law Practitioners Association and the Social Housing Law Association have also intervened.
Significance of the case
The reason this case has garnered so much interest is because it presents an opportunity to have a thorough review of this area of law and potentially, for the precedent set in Halsey to be overturned. In that case back in 2004 the Court of Appeal considered the extent to which a successful defendant was entitled to costs where it had refused to engage in mediation and whether in principle parties could be compelled to engage in mediation. The outcome of and precedent set in Halsey was that it would be wrong to force parties to engage in mediation. Doing so would be a breach of their right to a fair trial pursuant to article 6 of the European Convention of Human Rights ("ECHR").
Many believe this decision acts as hindrance in achieving resolutions outside of court. Whilst one can appreciate that at the time the court was concerned with the costs associated with forcing an unwilling party to engage in mediation, likewise the possibility that mandating mediation would delay a party's access to justice, many leading dispute resolution bodies have since concluded that this decision was wrong.
Catherine Dixon, Director General of CIArb stated that “Halsey has proved hugely problematic for the wider adoption of mediation. It is generally considered to be bad law and this case offers the Court of Appeal the opportunity to clarify that automatically referring parties to mediation does not breach their human rights.”
Compelling parties to mediate does not equate to compelling parties to settle. Parties are free to decide if they settle or not at the mediation.
Over the last few years, we have seen an uptake in parties using Alternative Dispute Resolution ("ADR") methods such as mediation and arbitration. Rebecca Clark, Chair of the CMC commented that “it is important that the Court of Appeal is given evidence as to its efficacy and increasing popularity (of mediation): mediation saves time, money and Court resources.”
In addition to these calls, the Civil Justice Council published a report in July 2021 which concluded that making mediation or other forms of ADR compulsory is lawful and should be encouraged, which is likely to be persuasive in the Court of Appeal's consideration of Halsey.
Commentary
Should the decision in Halsey be overturned this will signal to all parties considering litigation the importance of exploring ADR, both before proceedings are issued and through-out the lifetime of a claim. Whilst it is unlikely that an internal complaints process (in the absence of an independent third party) would be viewed to amount to a form of ADR, due to its perceived lack of impartiality, we may see a significant shift in terms of strengthened court powers to compel ADR.
We have already seen commercial parties agreeing to use arbitration or mediation as part of their contractual terms, in the event of a dispute arising.
Many court pre-action protocols explicitly require parties to consider engaging in ADR before commencing proceedings. Whilst these pre-action protocols fall short of compelling parties to participate, the sanctions judges can apply for unreasonable refusal to engage in ADR have proven influential. So why not extend judges powers to allow them to compel unreasonable parties to engage in ADR?
Perhaps tellingly, the Master of the Rolls Sir Geoffrey Vos, noted that ultimately “Dispute Resolution can't be about paying lawyers, it's about solving disputes for real people”.
It will be interesting to see if the defendant and the intervening parties have done enough to demonstrate that now is the time for a seismic shift in the conduct of dispute resolution, so we await the Court of Appeal's judgment with considerable interest.
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