Pursuant to the Court of Appeal decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416[1], the Civil Procedure Rules (“CPR”) have been amended from 1st October 2024. As a result, the courts can now order parties in civil proceedings to engage in alternative dispute resolution (“ADR”), where it does not impair the very essence of the parties’ right to a fair trial, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
Previously, since the Court of Appeal’s decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576[2], it had been widely accepted that there is a general prohibition on the courts in England and Wales to compel the parties to engage in the ADR.
In Halsey the court opined that “if the court were to compel parties to enter into a mediation to which they objected, that would achieve nothing except to add to the costs to be borne by the parties, possibly postpone the time when the court determines the dispute and damage the perceived effectiveness of the ADR process”.[3]
The court held that “… the judge should explore the reasons for any resistance to ADR, but if the parties (or at least one of them) remain intransigently opposed to ADR, then it would be wrong for the court to compel them to embrace it”.
In Churchill, the lower court dismissed the claimant’s stay application, stating that it was bound to follow Dyson LJ’s statement in Halsey, “…to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court”.
On appeal, Sir Geoffrey Vos, Master Of The Rolls, who delivered the judgement, with which the other two lordships agreed, said “… I have reached the clear conclusion that [9]-[10] of the judgment in Halsey was not a necessary part of the reasoning that led to the decision in that case (so was not part of the ratio decidendi and was an obiter dictum)”.[4]
The Court of Appeal’s decision in Churchill reversed what had been considered to be a general principle of prohibition on courts compelling parties to engage in the ADR, for nearly 20 years. Since 1999 civil justice has been guided by the ‘overriding objective’ as provided at CPR rule.1, aiming to ensure all cases are dealt with fairly, reasonably and at a proportionate cost.
The judgement states, “the court can lawfully 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.”[5] The judgement in Churchill prompted a review of the CPR.
Following the judgement in Churchill, the Civil Procedure Rules Committee commissioned a consultation on the amendment of the CPR, to give effect to the decision. A multi-jurisdictional working group chaired by Lady Justice Asplin, Court of Appeal, proposed changes to the rules, which were largely followed by amendments in the CPR. The changes to CPR now include “promoting or using alternative dispute resolution” and the court’s case management duties now include “ordering or encouraging the parties to use and facilitating the use of ADR”. Below are the main amendments to the CPR.
The overriding objective:
- CPR 1.1
(1) These Rules are a procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.
(2) Dealing with a case justly and at proportionate cost includes, so far as is practicable –
…
(f) – promoting or using alternative dispute resolution.
Court’s duty to manage cases:
- CPR 1.4
(1) The court must further the overriding objective by actively managing cases.
(2) Active case management includes –
…
(e) ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution.
The Court’s Case Management Powers.
The court’s general powers of management:
- CPR 3.1
(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.
(2) Except where these Rules provide otherwise, the court may –
…
(o) order the parties to engage in alternative dispute resolution.
The Fast Track and The Intermediate Track.
Directions:
- CPR 28
- 7 — (1) The matters to be dealt with by directions under rule 28.2(1) include—
…
(d) whether to order or encourage the parties to engage in alternative dispute resolution.
- 14 — (1) The matters to be dealt with by directions under rule 28.2(1) include —
…
(f) whether to order or encourage the parties to engage in alternative dispute resolution.
The Multi-Track.
Case Management:
- CPR 29
- 2 – (1) When it allocates a case to the multi-track, the court will –
(1A) When giving directions, the court must consider whether to order or encourage the parties to engage in alternative dispute resolution.
General rules about costs
Court’s discretion as to costs
- CPR 44.2
(1) The court has discretion as to – …
…
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
…
(5) The conduct of the parties includes –
…
(e) whether a party failed to comply with an order for alternative dispute resolution or unreasonably failed to engage in alternative dispute resolution.
The amendments to CPR do not provide any guidance on the specific circumstances in which
the court will exercise its new powers or the manner in which the court will exercise these.
In Churchill, the court specifically emphasised that “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.[6]
The court declined to provide a “checklist” or a “scoresheet” of relevant factors to operate from, when determining the questions of whether or when to order the parties to engage in the ADR.[7] However, the court considered that the matters mentioned by the Bar Council (one of the Interveners) and Mr Churchill (Claimant/ Respondent), and by the Court of Appeal in Halsey were likely to have some relevance.[8]
These factors included:
- the form of ADR being considered,
- whether the parties were legally advised or represented,
- whether ADR was likely to be effective or appropriate without such advice or representation,
- (iv) whether it was made clear to the parties that, if they did not settle, they were free to pursue their claim or defence,
- the urgency of the case and the reasonableness of the delay caused by ADR,
- whether that delay would vitiate the claim or give rise to or exacerbate any limitation issue,
- the costs of ADR, both in absolute terms, and relative to the parties’ resources and the value of the claim,
- whether there was any realistic prospect of the claim being resolved through ADR,
- whether there was a significant imbalance in the parties’ levels of resource, bargaining power, or sophistication,
- the reasons given by a party for not wishing to mediate; for example, if there had already been a recent unsuccessful attempt at ADR, and
- the reasonableness and proportionality of the sanction, in the event that a party declined ADR in the face of an order of the Court.[9]
When declining to lay down fixed principles as to what will be relevant to determining the questions of a stay of proceedings or ordering the parties to engage in alternative dispute resolution process, the court considered that many of the factors mentioned above, particular circumstances of the case and the nature of the process contemplated will be relevant.[10]
In view of the recent amendments to the CPR, parties to a dispute may benefit form looking into an appropriate route of alternative dispute resolution early on, before contemplating court proceedings. Whether or which rout would be appropriate for an ADR will depend on particular circumstances in each case. Some of the ADR routes are as follows:
- Negotiations
- Mediation
- Conciliation
- Early Neutral Evaluation
- Arbitration
- Private FDR
- Expert Determination
- Adjudication
The changes to CPR mark a change of culture from litigation to problem solving. Parties to a dispute need to carefully consider available options and suitability of ADR; and weigh up as to what would amount to a reasonable as opposed to an unreasonable conduct.
As far as the Family Law proceedings are concerned, there is no power in the Family Procedure Rules 2010 to require the parties to engage in non-court alternative dispute resolution. However, FPR rule 3.3(1) mandates the court with a duty to consider if non-court dispute resolution is appropriate at every stage in proceedings. FPR 3.2(2) requires the court to take into account whether a MIAM took place, or an exemption was confirmed, and whether the parties attempted mediation or another form of non-court dispute resolution. Whereas FPR rule 3.4(1) empowers the court to adjourn proceedings to enable the parties to consider non-court dispute resolution. Family Court users may like to watch this space and remain flexible.
[1] Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 https://www.judiciary.uk/wp-content/uploads/2023/11/Churchill.APPROVED-JUDGMENTS-2.pdf
[2] Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 https://www.bailii.org/ew/cases/EWCA/Civ/2004/576.html
[3] Paragraph 10, Halsey
[4] Paragraph 20, Churchill
[5] Paragraph 74 (ii)
[6] Paragraph 65,
[7] Paragraph 74 (iii),
[8] Paragraph 66
[9] Paragraph 61
[10] Paragraph 74 (iii),
