Ruling provides for mediation in midst of litigation in England

Andrew Herring and Kate Aldwinckle of Pinsent Masons were commenting after the Court of Appeal in London confirmed (32-page / 326KB PDF) that the courts in England and Wales have the authority to ‘stay’ – put a halt to – proceedings before them to facilitate non-court based dispute resolution “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”.

Herring said: “In the majority of commercial disputes, sophisticated commercial parties will be well aware of the benefits of using ADR. Indeed, many commercial contracts will have express terms requiring parties to use ADR before formal litigation or arbitration is commenced as a last resort. This decision will be welcomed by those commercial parties who may now have better prospects of encouraging constructive engagement from counterparties who may otherwise have been reluctant to participate in ADR.”

In the case before the Court of Appeal, local authority Merthyr Tydfil County Borough Council had taken issue with a man’s refusal to engage with its internal complaints procedure before lodging a claim against it before the courts. James Churchill has sued the authority over alleged damage he has suffered because Japanese knotweed has encroached onto his property from the authority’s adjoining land.

The Court of Appeal declined to order a halt to the court proceedings that Churchill had raised at this stage. However, its ruling clarified that the courts do have qualified powers to make such orders – and in this case it has advised both parties to “consider whether they can agree to a temporary stay for mediation or some other form of non-court-based adjudication”.

Aldwinckle said: “This judgment is important as it demonstrates the Court of Appeal’s commitment to achieving the overriding objective of the Civil Procedure Rules – to deal with cases justly and at proportionate cost – without prescribing set measures which could be counter-productive to certain cases.”

“Principles established in case law had previously been interpreted as a barrier to mediation, on the basis that forcing unwilling parties to mediate was in breach of Article 6 of the ECHR, which provides for a right of access to courts and to a fair trial. However, those principles have now been re-interpreted meaning, going forward, parties may be compelled to mediate if the judge hearing the case believes it to be appropriate,” she said.

“Moving forward, parties involved in proceedings, including pre-action correspondence will need to seriously consider engaging in ADR at all stages of the proceedings and may find themselves subject to a court order directing that ADR takes place in any event. How widely this will be prescribed by the court is not yet known and the judgment does not lay down any fixed principles for when it will be appropriate,” she said.