In DKH Retail v City Football Group Ltd[1], DKH, owners of the trademark “Superdry”, a clothing brand, alleged a trademark infringement by Manchester City FC in relation to club shirts bearing not only the name of their sponsor Asahi but also the words “Super” and “Dry” (though referring to Asahi’s 0% lager brand). The claim was contested and was destined to be heard in the Shorter Trial Scheme List in the Business and Property Court. However, a pre-trial review was convened. By that time (according to counsel for the defendants) the parties had already spent “hundreds of thousands of pounds” on the action. The PTR came before Miles J in November 2024, a year after Churchill.
The claimants made two applications: firstly, for disclosure of the sponsorship contract between Manchester City and Asahi, and secondly for an order for compulsory mediation. It is relatively rare to read a judgment delivered at a pre-trial review, which requires the likely trial judge to give final case management directions, rather than a KB Master. Both applications were opposed by the defendants. Miles J dealt first with the disclosure point, finding that the sponsorship agreement should be disclosed, as it had been on a list attached to the witness statement served on behalf of the club. On the application for an order to mediate, Miles J rehearsed the changes wrought both by Churchill and the consequent amendments to the CPR which specifically authorised judges to order mediation. DKH had said that the issues were relatively narrow and that there were possible ways of resolving the dispute which a trial could not deliver and argued that a “short sharp mediation” was worth trying. Even though substantial costs had already been spent, very considerable further sums were about to be spent. Counsel for the club argued that it was late in the day, very late in the day, and that there needed to be a reasonable prospect of success, which he suggested did not exist.
Miles J summed the situation up with admirable clarity and appreciation of what can be achieved through mediation. It is worth quoting his decision word for word:
38. …in many cases the parties' positions in the litigation are diametrically opposed and it may easily be said that each party requires a judicial determination. But nonetheless the parties come through ADR to recognise the desirability of settling for less than their strict legal rights and compromising their positions. Experience shows that mediation is capable of cracking even the hardest nuts. The process sometimes succeeds in cases where the parties appear at first to have intractable differences. Here, as the claimants said, everything would be up for grabs at a mediation, including the form of representation of any branding on the relevant kit, timing and money. The claimants are also right to say that the dispute is self-contained and that a mediation would be able to focus on possible solutions rather than raking over historical grievances.
39. I see some force in the defendant's submission that it is late in the day to be seeking an order, but it may also be said that there is some advantage in the parties' positions having been crystallised through pleadings and the service of witness statements. It is indeed sometimes an objection to mediation that it is premature, proposed at a stage when the parties' positions are unknown. That cannot be said here.
40. There is also some force in the submission of counsel for the defendant that there are commercial parties with experienced solicitors and that if there was realistically to be a settlement, one would have expected it already to have been reached. But that argument does not do full justice to experience, which shows that brining parties together through mediation can overcome an entrenched reluctance of parties to negotiate, even where sincere. The purpose of mediation is to remove roadblocks to settlement. I am unable to accept the submissions of the defendant that a mediation here has low prospects of success and that adjudication by a court is necessarily required. There may be solutions other than a yes or a no.
41. A mediation of this case will be short and sharp, and the documents needed for it would be brief. The defendant did not suggest that the mediation would significantly disrupt the parties' to find a workable date.
42. Counsel for the defendant said that his instructions were that they had very limited availability in December. However, on the available material it seems it would be possible for the parties to find a workable date.
43. I take account of all of the considerations identified by the parties. Overall I am satisfied that this is a case where I should order the parties to mediate with a view to seeking, if possible, to resolve the dispute between them and that it should take place during December 2024. The parties should report its outcome to the court as soon as possible after the mediation is complete.
The icing on the cake appears at paragraph 44 of the judgment added later which reads
44. Postscript: on 13 January 2025 the parties notified the court that they had settled their dispute.
CEDR is already receiving referrals of mediations which have been ordered by the court. It is clear that judges are taking their rediscovered power to do so seriously, as should litigators. The really good aspect to all this is that when mediations are ordered, they will almost certainly take place, and there will no longer be the need for forensic analysis of offers and refusals at the end of trials to decide whether a refusal to mediate justifies a sanction or not. Such discussions will almost certainly only arise over inter-party and refusal to mediate pre-action and then will be able to be dealt with at the first CMC, at which judges may well be tempted to impose an immediate sanction on a defaulting party, assessed and payable forthwith.
[1] [2024] EWHC 3231 (Ch)