The courts in England and Wales are increasingly encouraging parties to resolve disputes without the need for a full trial. A significant development in this area came from the Court of Appeal decision in Churchill v Merthyr Tydfil County Borough Council.
In In Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, the Court of Appeal confirmed that courts can, in appropriate and proportionate cases, order parties to engage in alternative dispute resolution (ADR), including mediation. This is significant because it removes the previous uncertainty around whether mediation could be compelled by the court.
The Position Following Churchill
Historically, there was judicial hesitation around compelling parties to mediate, based on earlier authority suggesting that mandatory ADR might interfere with a party’s right to a fair trial.
The Court of Appeal in Churchill clarified that:
- Courts can lawfully order parties to engage in ADR, provided it does not impair access to justice
- Any such order must be proportionate and appropriate
- The objective is to promote the fair, quick and cost-effective resolution of disputes
From a practical perspective, this marks a shift toward a more interventionist approach by the courts in managing disputes.
First Reported Application in Practice
The impact of Churchill is already being seen in the High Court.
In DHK Retail Ltd & others v City Football Group Ltd, a dispute involving Superdry and Manchester City Football Club, the court exercised its case management powers under the Civil Procedure Rules, including CPR 1.4(2)(e) and CPR 3.1(2)(m), which now expressly support the court’s ability to order ADR, to require the parties to engage in mediation.
The court recognised that mediation can assist parties in overcoming entrenched positions and may lead to solutions that are not available through a traditional court judgment, where one party wins and the other loses.
This demonstrates that the principles in Churchill are already being applied in practice, rather than remaining theoretical.
What This Means in Practice
This development has practical implications for parties involved in litigation.
Mediation May No Longer Be Optional
Parties should now expect that courts may require them to attempt mediation, even where one side is reluctant.
Costs Consequences
An unreasonable refusal to engage in ADR may result in adverse costs consequences, even where that party ultimately succeeds in the litigation.
Earlier Focus on Settlement
Disputes are increasingly likely to involve early engagement with ADR, rather than waiting until later stages of proceedings.
From a practical perspective, parties should now treat mediation as a core part of litigation strategy, rather than an optional step.
A More Commercial Approach to Disputes
The courts are clearly moving toward a more commercial and pragmatic approach to dispute resolution.
Rather than allowing matters to proceed directly to trial, there is increasing emphasis on:
- Reducing legal costs
- Saving court time
- Encouraging negotiated outcomes
For many parties, this can result in faster and more cost-effective resolutions.
What Should Parties Do?
In light of these developments, parties involved in disputes should:
- Consider mediation at an early stage
- Be prepared to justify any refusal to engage in ADR
- Take advice on settlement strategy alongside litigation strategy
Ignoring ADR is no longer a neutral position, it may carry risk.
How We Can Help
At Ranjay Solicitors, we advise clients on:
- Litigation strategy and dispute resolution
- Mediation and settlement negotiations
- Commercial and property disputes
We take a practical and commercially focused approach, helping clients resolve disputes efficiently while protecting their legal position.
Tej Chowdhary, Solicitor at Ranjay Solicitors
(This article is provided for general information only and does not constitute legal advice. For advice tailored to your circumstances, please contact Ranjay Solicitors.)