2022 was a relatively quiet year overall for new law appertaining to mediation, as I said in my review of that year’s cases. However, I predicted that one 2022 decision, made by a Deputy District Judge in Cardiff, might lead to a fundamental change in law over the position of mediation within civil dispute resolution. This has indeed turned out to be so in the Court of Appeal judgment in Churchill v Merthyr Tydfil CBC[1], in which the long-awaited opportunity to review Halsey v Milton Keynes[2] was accepted enthusiastically by a very strong panel of judges comprising the newly elevated Lady Chief Justice Carr LCJ, Sir Geoffrey Vos MR and Birss LJ, respectively Head and Deputy Head of civil justice.
As is well known now, Churchill was originally a claim brought by a landowner against his local council which owned neighbouring land from which Japanese knotweed had escaped. Initially he claimed in private nuisance for substantial remedial costs and diminution in value of his land. The local authority argued that he should have used their free complaints service to resolve the issue and that to have moved straight into litigation was effectively an abuse of process and a waste of costs and court resources. The council applied for a stay of the action for the claimant to be ordered to engage with the complaints process. The claimant’s costs up to the hearing of the council’s application exceeded £40,000. DDJ Rees felt constrained by the dicta in Halsey which asserted that, because of ECHR Art 6, courts could not order an unwilling party to use an ADR process and declined to order a stay for that reason. He did however find that it was unreasonable of the claimant to have proceeded in this way, flagging the likelihood of a costs sanction at the end of the litigation whether the claim was won or lost. The council appealed.
A number of interested parties were permitted to intervene to make written and in some cases oral submissions: the Law Society, the Bar Council, the Civil Mediation Council, CEDR, the Chartered Institute of Arbitrators, the Housing Law Practitioners’ Association and the Social Housing Law Association. The focus of the appeal was on whether the DDJ Rees was right to have regarded himself as prevented by Halsey from ordering the claimant to participate in any form of ADR. Halsey was of course a clinical negligence claim and the substance of the appeal there was whether the defendant NHS Trust should have been penalised in costs for refusing the unsuccessful claimant’s offer to mediate. On the merits, the Halsey court decided not to sanction the Trust, but it devoted the opening part of its judgment to pronouncing its view as to whether a court had power to compel by order an unwilling party to mediate, or whether this would infringe ECHR Article 6 rights to access to a public trial. It decided that courts could not order an unwilling party to participate in ADR.
We can learn from submissions and concessions made during the appeal in Churchill where matters went somewhat awry in Halsey. On the second day of the Churchill appeal, a formal statement agreed by both parties and all the interveners was laid before the court, which read: “The question of whether compulsory mediation is lawful was not in issue at first instance in Halsey. In the Court of Appeal proceedings [in Halsey], the issue was not raised in the Appellant’s Notice and none of the written skeleton arguments addressed that issue.”
This amounted to a universally agreed concession that the Art 6 point in Halsey was not germane to the facts of the case and was therefore obiter dictum.
Furthermore, the written submission lodged jointly by the Civil Mediation Council, CEDR and Ciarb as joint interveners delicately suggested that the court in Halsey had been….
"led into error in respect of Article 6 ECHR, by argument which was addressed to it only in the course of oral submissions, the Court and the parties not having been given notice of it in any written submission. The Interveners respectfully support the submission that to order parties to mediate does not, certainly in most circumstances, infringe their Article 6 rights. This is because requiring parties to mediate does not, in most circumstances, impose any obstruction to their right of access to the court, let alone an unacceptable obstruction. Requiring parties to mediate does not require them to settle their dispute or deny them access to the court if they are unable to do so."
In his oral submission on behalf of the mediation providers, Edwin Glasgow KC was rather more trenchant on this point, making it clear that any fault over this lay not with Lord Dyson and his fellow judges in Halsey (Ward and Laws LJJ):
"but with those who suddenly and improperly sprang an argument on him that was not pleaded, not in any written submission, and was against the instructions from the Law Society."
He noted that both judges had since graciously and honourably accepted that they may have stepped too far in acceding to these submissions, and (as Ward LJ put it in Wright v Michael Wright Supplies Ltd[3]) in being “persuaded by the silky eloquence of the eminence grise of the ECHR, Lord Lester of Herne Hill QC to place reliance on Deweer v Belgium.”
The late Lord Lester QC was instructed by the Law Society which, it later appeared, had instructed him not to take any point about Article 6. So although Halsey was essentially about inter-party offers to mediate, the Court accepted an unanticipated invitation to give general guidance on whether courts had the power to order parties to mediate and declared that to do so contravened ECHR Article 6.
Many commentators and a number of judges over the years since 2004 have argued that this guidance was indeed not part of the rationale for the decision in Halsey and was therefore not binding (as being obiter dicta). The most persuasive and quasi-authoritative expression of this view (though of course not binding on anyone) was in the Civil Justice Council’s report Compulsory ADR, published in June 2021, which analysed the position carefully and asserted that judicial ordering of ADR was both lawful and (subject to context) desirable.
But even after that report, judges still expressly declared themselves as bound by the Halsey opinion. As recently as 2023, in Mills & Reeve v Martin et al[4], a dispute over trust property, HHJ Kelly sitting in the High Court said:
55. The first question is whether the dicta in the Halsey case concerning mandatory mediation are binding or not. As has been noted in other cases and in academic commentary, the Court of Appeal were not considering an appeal in respect of an order mandating or refusing to mandate the parties to mediate in that case. In addition, there have been questions raised as to the interpretation of the court of and its reliance on the Deweer case.
56. In my judgment, although the subject matter of the appeal in the Halsey case did not concern an order for mandatory mediation, the dicta of the Court of Appeal in that case are binding on me. Even if the discussion of mandatory mediation is technically obiter, the Court of Appeal expressed a very clear view on the lawfulness of mandatory mediation when given the opportunity to do so.
57. I accept, of course, that there have been significant developments in the use of mandatory ADR since Halsey was decided. The court has decided in various cases that various forms of ADR can be ordered, such as ENE. There has been detailed consideration by the CJC of mandatory mediation and other forms of ADR. The CJC did not endorse mandatory mediation at this point in time. The Chancery Guide 2022 proceeds on the basis that the court cannot compel unwilling parties to mediate. Whilst there has been academic and other commentary on the pros and cons of mandatory mediation, there has been general recognition that a mediation ordered at the wrong time not only may be unlikely to succeed but may have the effect of entrenching parties' positions.
578. Various comments have been made by judges in other cases which question whether it is time for the Court of Appeal to review the issue of compulsory mediation and the rule in Halsey. It may well be that giving an answer to the question of whether there is now power to order mandatory mediation has been sidestepped because it has not been necessary to answer the question in any particular case. However, given the very clear views of the Court of Appeal in Halsey, I do consider myself bound by Court of Appeal's views in that case.
She both declined to order ADR and also declined to give permission to appeal to the Court of Appeal as a suitable case for deciding whether Halsey was right on this point.
Yet the burgeoning tide of opinion adverse to the Art 6 aspect of Halsey did have some impact, in that it seems to have encouraged bolder judges to adopt the view that they could order a stay of proceedings for the purpose of parties utilising mediation, even if such a course was opposed by parties. A line of cases starting in 2012 was revisited in 2023 in the case of Hamon v UCL[5] and merits a quick review. One of the first instances of this approach is found in Andrews et al v Barclays Bank Ltd[6], in which Waksman J ordered stays of multiple PPI claims against banks and required claimants to utilise an extra-judicial dispute resolution process, making it clear that claimants who litigated without doing so faced a significant risk of costs sanctions. And in Hussein v Chowdury[7], claim seeking permission from the Court for the claimants to pursue charity proceedings under s.115(5) of the Charities Act 2011, the judge ordered a stay for mediation against the wishes of at least one party. In doing so, Judge Jarman KC sitting in the High Court said:
18. I am not satisfied on the information presently available that litigation is the least worse course in the interest of the trust. I agree with the Charity Commission that that should not be considered until the parties have engaged in a meaningful way in mediation with a professional mediator. The way in which each side has engaged in litigation has been far from impressive (the claimants in respect of the 2017 claim and the second and third defendants in respect of the present claim). They should engage fully with mediation, which to be successful usually requires give and take on both sides.
19. In this particular case the parties must put the interests of the trust above their own. What evidence there is before me as to its financial position shows that such a position is not good. In the latest accounts in the bundle for the year end 2015, there was very little money in the bank and creditors of over £126,000. A net asset position was obtained only because of the capital value of the trust's premises. Its community activities are now suspended because of the Covid-19 restrictions. As Mr Ahmed submitted, this dispute is likely to be harming the trust financially. It is also likely to be harming its charitable activities. Litigation is likely to make matters even worse.
20. Accordingly, the parties should make utmost efforts to ensure that mediation is successful. In any further consideration by the court, which it is hoped will not be necessary, the court is likely to look closely, so far as is open to it to do so, at the extent to which each side did so.
A similar approach was taken by Senior Master Fontaine in July 2022 in the Grenfell Tower litigation[8], where she extended a general stay on that litigation despite opposition from one large group of claimants because there was optimism that a specially designed ADR process would provide quicker results. She justified her decision on the following basis:
96. The court has an inherent power to order a stay of proceedings as well as pursuant to CPR 3.1(2)(f). CPR 26.4(2A) also gives the court the power to unilaterally order a stay of proceedings to allow for the settlement of a case if it considers it appropriate. The court’s duty under CPR 1.4(1) to case manage litigation actively and to further the overriding objective at 1.1, is relevant to the exercise of this power. The general duty to manage cases actively specifically requires the courts to encourage the parties to use an alternative dispute resolution procedure if the court considers that appropriate to facilitate the use of such procedure, to help the parties settle the whole or part of the case, enter fixed timetables or otherwise control the progress of the case. The CPR requires the parties and their legal representatives to assist the court in furthering the overriding objective.
97. In the light of the overwhelming view of the majority of all parties save the BLJ Claimants that the ADR process has the best chance of resolving their claims earlier than and without the further trauma of the litigation process, I respect the wish of those parties and all the experienced legal representatives advising them, that this is the case, for the reasons that they have given.
Her decision was presumably based in part in accepting several trenchant submissions made by counsel for Kensington & Chelsea (as summarised by the Senior Master in her judgment) to the effect that:
55. The court has the jurisdiction to order a stay of proceeding specifically until parties make adequate efforts to engage in ADR: Muman v Nagasena[9]…..
96. The court has an inherent power to order a stay of proceedings as well as pursuant to CPR 3.1(2)(f). CPR 26.4(2A) also gives the court the power to unilaterally order a stay of proceedings to allow for the settlement of a case if it considers it appropriate. The court’s duty under CPR 1.4(1) to case manage litigation actively and to further the overriding objective at 1.1, is relevant to the exercise of this power. The general duty to manage cases actively specifically requires the courts to encourage the parties to use an alternative dispute resolution procedure if the court considers that appropriate to facilitate the use of such procedure, to help the parties settle the whole or part of the case, enter fixed timetables or otherwise control the progress of the case. The CPR requires the parties and their legal representatives to assist the court in furthering the overriding objective.
Although the Senior Master did not spell out that she accepted the jurisdictional basis argued for, she seems to have accepted it without question, and it is striking that there is nothing new in any of the provisions argued for. It is either founded on the inherent jurisdiction of the court or (in terms of the CPR) the overriding objective, and CPR 3 and 26, all of which have been in force since 1999. Theoretically, the court has always had the power to stay proceedings against the wishes of parties in order to facilitate mediation.
This inherent jurisdiction and the specific powers given by the CPR were again used in 2023 in another multiple claimant case before the courts in 2023, namely Hamon v UCL[10], in which hundreds of students applied for a Group Litigation Order in proceedings against UCL for failure to provide face-to-face teaching. UCL argued for a stay to enable these student complaints to be handled through the Office of the Independent Adjudicator (OIA). Senior Master Fontaine ordered a stay and adjourned the GLO application but would not order engagement in ADR. In doing so, she said (my emphases in bold):
13. Once proceedings are issued, the CPR requires the Court to further the Overriding Objective by actively managing cases. CPR r.1.4(2)(e) specifies that active case management includes:"…encouraging the parties to use an alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure."
14. The use of ADR to resolve disputes is an integral part of the litigation process. The White Book Section 14-2 states:
"ADR is promoted by both the CPR and its pre-action protocols, which form an integrated means of managing litigation (Jet 2 Holidays Ltd v Hughes[11]. Its promotion is an explicit aim of the Pre-Action Protocols (See Vol.1 paras C1A-004, C1-002).
Its use is also to be encouraged by the courts, while it is both encouraged by a number of provisions in the CPR (see Vol.1 paras 1.4.9 and 3.1.15)."
It is submitted that this is particularly the case where the threatened litigation is brought against a charitable institution. Reference is made to the comments of Lord Woolf in R. (on the application of Cowl) v Plymouth City Council[12] in the context of public authorities, which also apply here.
15. It is submitted that if the Claimants participate in the free, statute backed OIA scheme, the time and cost of High Court proceedings might not be incurred; and any claims that are not settled will at least then be properly particularised.
She later said:
63. However the court's exercise of its discretion to order a stay is not limited to claims where there is a compulsory contractual ADR clause. A stay can be ordered to encourage the parties to engage in ADR, whether through the OIA scheme or otherwise, during the period of the stay.
64. In any event, I do not propose to make a mandatory order for the Claimants to engage in ADR, but I do intend to make an order for a stay, with the express intention of encouraging the parties to use the period of the stay to engage constructively in some form of ADR. I consider that in this claim the usual sanction for failure to engage appropriately in ADR will be sufficient.
So although she rode back from ordering mediation, her stay for that purpose backed with the threat of costs sanction for unreasonable refusal to engage in mediation is very little short of mandating its use.
This line of cases enabled Vos MR to say in para 74 of the unanimous judgment in Churchill:
i) [9]-[10] of Halsey was not part of the essential reasoning in that case and did not bind the judge to dismiss the Council’s application for the stay of these proceedings.
ii) 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.
So the Churchill appeal court felt able to use the simple expedient of declaring that part of the Halsey judgment relating to ECHR Art 6 as obiter and therefore not binding on all those judges who had thought they were bound by it in the nineteen years since Halsey was decided. Perhaps the only surprising aspect to the Churchill saga is that DDJ Rees did not have his attention drawn to the line of authorities starting with Andrews and including Hussain v Chowdury and the Grenfell Tower litigation, all of which established that a stay for ADR against the wishes of aa party or parties was not contrary to law or prevented by Halsey. Andrews even involved the issue of the alternative use of a complaints procedure not dissimilar from Merthyr Tydfil’s. Nor do any of these decisions appear in the list of cases cited to HHJ Kelly in Mills & Reeve v Martin et al in 2023.
There is no doubt that the overturning of the Art 6 aspect of the Halsey decision is going to make a big difference to judicial thinking and the expectations of litigation lawyers. The chilling effect of Halsey, which was palpable in 2004 in having a restraining effect on the development of mediation as what Senior Master Fontaine described in Hamon as an integral part of the litigation process has at last been dissipated. It does not mean that mediation will be compulsory or automatic across the litigation board, but it does mean that the expectation will be that settlement ought to be given proper attention, and that judges really expect that litigation generally and trial specifically are the last resort of disputants.
Other issues perhaps rather pale into in significance in the light of Churchill, but there have been a few other interesting decisions relating to mediation.
In Stoney- Anderson v Abbas et al[13], a disputed inheritance claim, C offered to mediate at the outset but later declined. C won at trial but lost 50% of costs for having refused later. The judge said that this was a case which should have been mediated from the outset.
An interesting point on the relationship between arbitration and mediation emerged in Lord v Kinsella et al[14]. C sued DD over an arbitration over the members rights on the dissolution of an owners club for a timeshare. The arbitrator declined to take into account one party’s refusal to mediate: C argued that this was an error in law. The judge commented:
84. As already explained the arbitrator discounted conduct in relation to the mediation for two reasons. The first was that he was not aware that conduct in relation to a mediation was relevant to the costs of an arbitration. The second was that a mediation would not have brought the same certainty as an award concerning the construction of the Constitution.
85. Hence even if the claimants were right on the first point, they would have to show that the arbitrator was obviously wrong on the second. An appeal on an error of law will only be permitted to proceed where the determination of the question will substantially affect the rights of the parties (s. 69(3)(a)).
86. On the first point the claimants did not provide any authority concerning the treatment of mediation when it came to the costs of an arbitration. It seems to me that the relevance of mediation to the costs of an arbitration is likely to be sensitive to the facts and context. Arbitration is expected to be expeditious and less formal than court proceedings and there may well be little opportunity in the arbitration timetable for mediation. Like mediation it is a form of extra-judicial dispute resolution and the parties to an arbitration agreement have by definition agreed that their disputes shall be determined by an arbitral tribunal. On the other hand, I see no reason of principle why the parties' conduct in relation to should always mediation be discounted entirely when the tribunal considers costs of an arbitration. One should never say never.
87. On the second point counsel for the claimants submitted before me that while a mediation could perhaps not realistically have determined the issues of interpretation of the Constitution (where the parties were far apart and the outcome was binary), a mediation process could have served the narrow the issues to be decided in the arbitration. I found this hard to follow. The issues in the arbitration were reasonably narrowly defined and the hearing took three days. The interpretation issues were short. The fiduciary duty issues were introduced into the case by the claimants and they were the reason why the tribunal heard evidence from witnesses. If there had been a genuine concern about the scope of the issues and the scale of the arbitration these could have been discussed between the solicitors, and if there was disagreement, raised with the arbitrator, who could have given procedural directions. I find the suggestion that the parties should have sought to mediate in order to define the issues for the arbitrator far-fetched on the facts of this case.
In Thandi v Sagoo[15], in an interlocutory application in a building dispute, Master Teverson closed his judgment by saying:
82. By paragraph 3 of the Order of Mr Justice Adam Johnson dated 2 September 2021 it was ordered that at all stages the parties must consider settling this litigation by any means of Alternative Dispute Resolution (including mediation). I was told that no mediation has yet taken place. Any party not engaging in ADR in some form may expect to be heavily punished in costs irrespective of the outcome of the claim and counterclaim. I would urge that following the determination of this application both parties will re-evaluate the strength and weakness of their respective cases.
In Jones v Tracey and ors[16], a probate claim, Master Marsh declined to penalise the claimant, who ( he found) had made a genuine pre-action offer to settle but had failed to respond to a late invitation to mediate. In declining to do so, he said:
26. ….the claimant's failure to engage more positively with ADR and in particular mediation, ENE or Chancery FDR in April 2023 without providing any explanation is surprising.
27. I have concluded that the claimant's conduct was not such as to warrant a deduction from his costs. In reaching that conclusion I have in mind in particular (a) the fact that the claimant made most of the running in relation to settlement (b) the third defendant's behaviour in her conduct of the claim and (c) the strong merits of the claim which either were known or should have been known to the third defendant and (d) the late stage at which the third defendant expressed a willingness to engage in ADR. Although the claimant did not explain his position in April and May 2023 it would not have been unreasonable to have concluded that the additional cost of mediation was not warranted. I do not consider that on the facts of this case it can be said that silence on the part of the claimant amounted to a refusal to undertake mediation (or some other form of ADR).
In Kajima v Children’s Ark[17], a dispute arising from a PFI contract to build a children’s hospital, proceedings were started without use of a dispute resolution process set out in the contract. The trial judge held that the terms of the DRP clause were not clear enough to warrant an order to use procedure and had declined to grant a stay in exercise of his discretion. The appellant’s appeal was dismissed.
In Denny v Babaee[18], a party’s failure to perform agreed settlement terms led to an order for indemnity costs from the date of that failure.
What of course is going to be really interesting is to see what impact the Court of Appeal decision in Churchill is going to have on the attitude of judges to sanctioning unreasonable refusal to mediate. Now that it is clear that judges can order unreasonably refusing parties to mediate despite their opposition to doing so, it is presumably likely that cases will go on to trial with due judicial consideration of ADR at directions hearings, and much less likely that the topic will only be discussed when costs come to be considered after judgment on the merits. If it is a case where one party felt that mediation should be tried, then they will have had ample opportunity to ask the court to order it well before trial. It is even possible that judges who make an interlocutory order to mediate may be persuaded to make an interim costs order in any event against the refusing party for having wasted the court’s time, with summary assessment and payment ordered, without waiting to see who wins at the end of the litigation. This something that DDJ Rees declined to do in Churchill at first instance, but is certainly foreseeable.
The only cases which may reach trial where costs sanctions call for consideration is where the parties and their advisers mutually agreed not to use mediation and the court finds this to have been mutually wrong, thus contemplating the possibility of their own motion of visiting costs sanctions on both parties. This happened in McMillen Williams v Range[19] some years ago, an appeal in which no order for costs was made, with the court saying “ a plague on both your houses”: neither side had considered mediation in a case where the court felt it should have been tried. It is also worth recalling the South African case of Brownlow v Brownlow, in which a judge capped what each party’s solicitor could charge their clients because they had failed to advise their clients to mediate. Whether such an order could be made by an English judge is debatable, but it is a perfectly logical approach.
What will happen to the line of cases starting with Gore v Naheed[20] propounding the “one of many factors” argument as a reason for not penalising a refusal to mediate is worth watching.
Another area of reform which is likely to make a material difference to the place of mediation in civil justice in years to come is the way the pre-action protocols are developed in the light of Part 1 of the Civil Justice Council (CJC)’s Final Report about reform of the Pre-action Protocols (PAPs) which was published in August 2023, with its draft General Pre-Action Protocol. If accepted (and the consultation will be lengthy and probably controversial), the place of pre-issue mediation will be fundamentally changed.
[1] [2023] EWCA Civ 1416
[2] [2004] EWCA Civ 576
[3] [2013] EWCA Civ 234
[4] [2023] EWHC 654 (Ch)
[5] [2023] EWHC 1812 (KB)
[6] [2012] EWHC B13 (Merc)
[7] [2020] EWHC 790 (Ch)
[8] See Abdel- Kardr et al v RB Kensington & Chelsea et all (the Grenfell Tower litigation) [2022] EWHC 2006 (QB)
[9] [2000] 1 WLR 299 at p. 305 – an authority rather lost sight of in the last 24 years
[10] [2023] EWHC 1812 (KB)
[11] [2019] EWCA Civ 1858 at [36]–[43]; see Vol.1 para.C1A-002)
[12] [2002] 1 WLR 803 at [1-3]
[13] [2023] EWHC 2423 (Ch)
[14] [2023] EWHC 2748 (Ch)
[15] [2023] EWHC 1379 (Ch)
[16] [2023] EWHC 2256 (Ch)
[17] [2023] EWCA Civ 292
[18] [2023] EWHC 1490 (TCC)
[19] [2004] EWCA Civ 294
[20] [[2017] EWCA Civ 3609, a much criticised decision, but followed in Richards v Speechly Bircham [2022] EWHC 1512 (C0mm) and Philip Warren v Lidl [2012] EWHC Ch, both decided by deputy High Court judges. They are fully discussed in my case review of decisions in 2022