Ask anyone who has ever seen their case go to trial and they will tell you – even if they won – that it was more stressful, more expensive and slower than they had ever anticipated at the beginning of their dispute. That is why there is a lot of pressure from the outset in a dispute to try and resolve matters without going to trial.
But not everyone is keen to mediate – it is not uncommon for parties to see the instruction of solicitors in a matter to be the sign that they have already done everything they can to resolve matters and now it must go to court.
That was certainly the position taken by Manchester City Football Club in the case of DKH Retail and others v City Football Group Ltd [2024] EWHC 3231 (Ch).
This was a claim brought by the owners of the ‘Superdry’ brand, unhappy with the branding on Manchester City Football Club’s shirts (“the Club”). One of the sponsors of the Club is Asahi Super “Dry” 0.0% lager (“Asahi”). As far as the well-known brand Superdry was concerned, having football shirts utilising the words “super” and “dry” in the way they were, could have been perceived by the public to denote their brand.
Superdry wanted the Club to attend mediation to try and get matters settled without the need for the Court’s involvement. The Club were not keen because they were reluctant to share sensitive commercial information concerning the arrangement they had with Asahi and were prepared to stand by their position in a trial.
Superdry made an application to the Court for the Club to be ordered to engage with mediation.
What is so good about mediation?
Mediation can be a very useful tool to avoid litigating a matter to the end. It involves both parties coming together (albeit in separate rooms), either in person or virtually. These are usually scheduled for a day. There is no obligation on the parties to meet at any point; but a mediator moves between the parties trying to narrow the issues between them in the hope that matters might be resolved. Offers can be exchanged and there is a real focus on reaching middle-ground, to bring matters to an end in a predictable and agreed manner without taking the considerable risk of a trial where the outcome may be very uncertain and the costs will be high.
Courts are increasingly utilising their powers to encourage parties to attempt to settle matters between them. There is a shift from reprimanding those who unreasonably refuse to mediate (after the event, in a trial) to prescribing obligations to engage in the exercise in the hope of ameliorating the need for a trial full stop.
Increasing importance to consider mediation
In recent years there has been a flurry of case law which has brought the importance of mediation to centre stage. Superdry asked a Judge to order a compulsory mediation for the parties. The Court of Appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 had previously confirmed that the court had the power to do so.
Following the Churchill case, rules governing civil cases known as the Civil Procedure Rules were amended to include a focus on promoting the use of alternative dispute resolution (ADR) (an umbrella term for any method of resolving a dispute before litigating) by both the parties themselves and the court. These ADR techniques are not limited to mediations, but can include negotiations, arbitrations and early neutral evaluation (See: Lomax v Lomax Court of Appeal – Early Neutral Evaluation – Stephens Scown).
Arguments for and against mediation in the Superdry case
Superdry cited the above shifts and argued that mediations could work even in the most complicated of matters. They aired their concerns costs of proceeding to a trial and the need for precious court resources to be properly allocated to those who really needed it.
The Club argued that this case was not suitable for a mediation as there was no realistic prospect of success, the offer to do so was made too late in the day, and that a judicial determination was necessary.
The decision
Unfortunately for the Club, the Judge didn’t give them much airtime. He referred to the ability of mediation to crack “even the hardest of nuts” and cited the flexibility of the outcomes available in a mediation (which would not be available to him in a trial outcome). Due regard was paid to the recent Churchill changes, and a mediation was ordered.
Whilst there is always the lingering fear that an opposing party will not properly engage in mediation, or that they will simply attend as a tick box exercise, that is not what happened here.
The Judge noted by way of post-script that upon reporting back to the court with the outcome, the Superdry matter had settled.
If you wish to discuss mediation, please contact our Inheritance & Trust Disputes team.