Concept for - Alternative Dispute Resolution (ADR)

The status quo for the last 20 years has been Halsey v Milton Keynes General NHS Trust [2004], namely that the Court can encourage but not compel parties to engage in alternative dispute resolution (“ADR”). However, the Court of Appeal has concluded in Churchill that a Court has the power, in appropriate circumstances, to order parties to attend a form of ADR.

The central issue before the Court of Appeal in Churchill was whether a Court has the authority to stay a claim for, or order, the parties to engage in a non-court-based alternative dispute resolution process (such as a mediation) and, if it does, when that power can and should be exercised.

Sir Geoffrey Vos (the Master of Rolls) gave the leading judgment. He confirmed that a Court does have the power to stay a claim for, or order, the parties to engage in ADR providing that the power is exercised in such a way that it does not impair a party’s rights to a fair trial under Article 6 of the European Convention on Human Rights.

In practice what does this mean? 

In practice, this means that when considering whether to order the parties to engage in a form of ADR, a Court will have to consider a wide variety of case-specific and party-specific factors whilst balancing the potential increased costs and/or delay that may result from the process.

By way of guidance, the Court of Appeal noted that if a Court is considering whether to order parties to attend a mediation, it should consider factors such as:

  1. The cost of a mediation.
  2. Whether the dispute is suitable for mediation.
  3. Whether parties are represented.
  4. The urgency of the case.
  5. The parties’ resources.
  6. A party’s reasons for not wanting to mediate.
  7. What sanction (if any) to apply to a refusal to mediate.

As put by the Master of Rolls:

The Court should only stay proceedings for, or order, the parties to engage in a non-Court-based dispute resolution process provided that the order made does not impair the very essence of the claimant’s right to proceed to a judicial hearing and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost”.

Points for the future

It will likely take time for Churchill to bed into the civil litigation system and no doubt there will be further cases which address the interplay between an order for ADR, the sanction for non-compliance and a party’s Article 6 rights as and when they appear.

In the short-term, parties to litigation will need to ensure that they have a considered view as to whether to ask for, accede to or resist for the opponent’s request for ADR (in all likelihood to be a mediation). We, as solicitors, will be there to advise you on those issues.

If you have any inquiries regarding alternative dispute resolution (ADR), please contact our Dispute Resolution team, who are happy to help.