The Court of Appeal decided in the Churchill Judgment that the courts can lawfully stay court proceedings, or order the parties to engage in Non-Court Dispute Resolution (“NCDR”) processes which include ADR mediation.
The Law Society intervened in the above case, and made submissions to assist the court in reaching its decision. The Law Society strongly believed that NCDR is usually in the best interests of the parties, although expressed real reservations as to the making of a “blanket rule”, as this could be contrary to the right of access to the courts.
What is mediation, and how does it work?
Mediation is one method used to settle disputes without involving the court. It is a confidential and private means of resolving a dispute. In contrast, court proceedings are usually public. Mediation is a far more cost effective tool to resolve a dispute, and is much faster than using the court system which can take months or years to reach a trial. Mediation is a flexible process, and in general a substantial percentage (approximately 90%) of mediations result in a settlement.
The current role of mediation in courts
Prior to the decision in Churchill an earlier Judgment suggested that ordering the parties to mediate would breach Article 6 of the European Convention on Human Rights, being the right to a fair trial.
In 2021 the Civil Justice Counsel (“CJC”) published a report on “Compulsory ADR”. Thereafter, a consultation process was conducted in 2021 and 2022 by the Ministry of Justice (“MoJ”). In July 2023 the previous UK government announced that all Small Claims issued in the County Court would be referred to the HMCTS Small Claims Mediation Service. Following the handing down of the Judgment in Churchill on 29 November 2023, it was decided that rule changes were required to the Civil Procedure Rules (“CPR”). Within a very short period draft amendments to the CPR were published for consultation, and came into force on 1 October 2024.
Proposals and trends towards mandatory mediation
The most striking change is the amendment to the “overriding objective” against which Judges must measure the exercise of the discretions given to them. An objective of civil justice is now “… using and promoting ADR”. The court’s duty of active case management now includes “ordering or encouraging” parties to use an ADR procedure, including mediation, if the court considers it appropriate.
The court must consider whether to order or encourage parties to participate in ADR when giving directions, or setting the timetable as to how the claim will get to trial.
As to the court exercising its discretion as to costs, the amendments now specifically include the conduct of a party in failing either to comply with an order for ADR or “unreasonably” failing to engage in ADR proposed by another party.
Benefits of mandatory mediation
Although it is now mandatory for the court to consider in larger claims whether to order or encourage parties to participate in ADR the making of an order is not “automatic”. The Court of Appeal set out multiple criteria for exercising the power but there are no fixed principles. This is left to the discretion of the Judge.
Challenges and criticisms of mandatory mediation
The UK does not have a mandatory mediation scheme as in some jurisdictions. There is currently no automatic requirement to participate in mediation prior to commencing or proceeding with litigation. Mandatory mediation might impede access to justice; cause potential harm to vulnerable parties; and forcing unwilling parties could be counter productive. Any future developments are now likely to depend upon the UK Government, and not the courts.
Court proceedings are the last resort. Parties to a dispute are required to take steps to resolve the dispute prior to commencing a claim. In the event of litigation, the court must then consider if the case is suitable for mediation. Sanctions will be imposed on any party unreasonably refusing to engage in some form of ADR, including costs.
Preparing for a future of court-ordered mediation
Parties in a dispute should seek expert advice as to the methods in resolving their dispute, including ADR mediation. David Patterson of Goughs has been an accredited mediator since 1997, and has substantial experience in dispute resolution strategy, including mediation.
