Mediation Blog: Mandatory Mediation – The Churchill Case – The end of a beginning?

Introduction

At the conclusion of my November 2023 Blog, “The Costs Consequences of Refusing Mediation-Are the Courts going Soft on Sanctions?” I wrote, “The courts are possibly becoming less absolute about applying a costs sanction where a party refuses to mediate just as the calls for mandatory mediation are getting louder, but that is a topic for another day”.

That day has arrived, sooner, possibly that might have been anticipated. On 29th November 2023, the Master of the Rolls, Geoffrey Vos KC, gave the leading judgement in Churchill v Merthyr Tydfil CBC. The MR’s enthusiasm for ADR has been remarked upon before in these blogs (Confidentiality/Mediation and the Courts-Something Lingering).

The Churchill Case

To summarise Churchill:

• The case concerned an allegation that the CBC allowed Japanese knotweed to encroach from its land onto the claimant’s land. The CBC maintained that the claimant should have used its dispute resolution system before issuing the claim. The district judge agreed with the CBC. He found that the claimant had been unreasonable in not doing so. However he refused to stay the claim (although it was pending the outcome of the appeal). The DJ decided he was bound by certain statements of Dyson LJ in Halsey v Milton Keynes General NHS Trust [2004] EWCA 576.
• In a detailed and carefully considered judgement (with which his fellow judges agreed), the MR distinguished those statements, which were to the effect that requiring parties to mediate would deny the right to access to the courts and be in breach of Article 6 (right to a fair trial) of the ECHR (European Convention on Human Rights), on the basis that they were not required for the resolution of the issues in the Halsey case (obiter dicta) and therefore not binding on other courts (paras 18-21 of the Churchill judgement).
• The MR described and discussed ECHR and CJEU (Court of Justice of the European Union) cases concerning the court’s powers to order parties to engage in a non-court based dispute resolution process (paras 24-49) and domestic law and concluded that, following the trend in them and in the UK, the courts did have the power to order proceedings to be stayed to enable ADR to take place against the will of one or both parties (paras 50-58).
• He indicated a number of factors which the courts could take into account in coming to that decision, while emphasising that it would be undesirable to provide a check list or score sheet for judges to apply (para 66).

It may have come as something of a surprise all round when, in conclusion, the Court of Appeal declined to exercise the power, which it had just decided existed, on the basis that it had dealt with every issue the parties had raised before it and remitted the claim back to the County Court.  Although the MR observed “the parties ought to consider whether they can agree to a temporary stay for mediation or some other form of non-court-based adjudication” (paras 70, 73 and 74 (iv)).

So, it appears it would be open to the DJ to order a stay or not, having taken into account the relevant considerations such as but not confined to those indicated in the judgment. They included (taken from the Bar Council’s submission para 61):-

• The form of ADR being considered
• Whether the parties were legally advised / represented
• Whether ADR was likely to be effective without such advice/representation
• The urgency of the case/reasonableness of the delay caused by ADR
• The costs of the ADR
• Any imbalance of resources between the parties
• The reasons given for not mediating
• The effectiveness of sanctions in the event of non-compliance

At this point, it is observed that the form of the ADR process proposed as relevant to the order to be made was not as closely scrutinised in this case, as it no doubt will be in the future (e.g. para 70). Mr Churchill raised the unsatisfactory nature of the internal complaints procedure (as he saw it) as a reason why the court had no power to order a stay against the will of a party. In particular, he pointed out that “there was no neutral third party involved and the claim was dealt with by the manager of the council’s own knotweed department” (para 63). The MR responded that these considerations were not relevant to the issue as to whether there was such a power at all. While he allowed that the nature of the internal complaints procedure “may be a good reason to support the argument that no stay should ultimately be ordered” (paras 50/51) and that the “characteristics of the particular method of non-court-based resolution process being considered will be relevant to the exercise of the court’s discretion” (para 60). Indeed, so one might think.

Discussion. Where are We?

This case has been proclaimed as a great step forward for the mediation world (notably by the CMC which along with CEDR and CiArb intervened in the case. The CMC website entry under News and Events “Joint Intervention Success” refers). But it seems to me the response needs to be tempered with caution for the following reasons:-

1. As above, the issue in the case was not a stay of proceedings for mediation to take place but for the CBC’s complaints procedure to be utilised.
2. There is nothing automatic about the courts making such an order. The potentially multiple criteria for exercising the power indicate that there can be no certainty such an order would be made. Requiring the undertaking of the local authority’s complaints system would be unlikely to meet the needs of a claim based on housing disrepair requiring urgent action, for example.
3. The increased application of the principle to consider mediation (as the Court of Appeal certainly intended it should) is likely to lead to additional criteria emerging- e.g., it can be anticipated the court would want to be satisfied that suitably qualified/properly regulated mediators were available.

Conclusion

It may well be that with this judgment the Courts have gone as far as they can go. They have found that the courts have the power to order parties to go to mediation, and indicated criteria by which that power may be exercised. It is observed that sanctions for non-compliance with similar orders have already produced much case law.

Further developments may well have to come from Government. Steps have already been taken in that direction. Examples are the MOJ paper “Increasing the Use of Mediation in the Civil Justice System“ (25/7/23) concerning small claims cases, on which my fellow mediator, Margaret Doyle provided her insight and the Possession Claims Mediation Pilot (my Blog 21/3/23 refers). Only by these means could a whole class of cases be referred to mediation – although the type of mediation proposed so far would not be recognised by many practitioners.