Churchill, Halsey and New Opportunities for Mandatory ADR in English Law
By Paul D. Godin, B.A. B.Sc. LL.B. C.Med
The English Court of Appeal (“ECA”) decision in James Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (“Churchill”) has significantly reset the English common law approach to whether parties can be required by the courts to mediate. Since 2004, England and many English-influenced (Commonwealth) common law regimes globally have been hampered in their ability to order parties to mediate in litigation and similar processes by the ECA decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 (“Halsey”), limiting mediation uptake. The Churchill decision now allows for courts to order participation in ADR processes like mediation.
The English Court of Appeal (“ECA”) decision in James Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (“Churchill”) has significantly reset the English common law approach to whether parties can be required by the courts to mediate. Since 2004, England and many English-influenced (Commonwealth) common law regimes globally have been hampered in their ability to order parties to mediate in litigation and similar processes by the ECA decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 (“Halsey”), limiting mediation uptake. The Churchill decision changes that situation.
Halsey effectively held that requiring a party to mediate in order to gain access to a trial was a breach of parties’ right to a fair trial, contrary to Article 6 of the European Convention on Human Rights.1
For two decades, criticism of Halsey has mounted from multiple sources (commentators, courts, legislators, academics, and legal organizations) for multiple reasons.2
First, a non-binding mediation process does not actually prevent parties from having access to a fair trial. Requiring parties to mediate does not require them to settle. They can say “no” and continue on to trial. Making mediation a mandatory process is little different from requiring parties to go through a judicial pre-trial conference (another non-binding but potentially useful process) before being allowed access to a trial.
Second, the Halsey decision greatly slowed the momentum for ADR that had been growing after the Lord Woolf Access to Justice Reforms.3 The trend favouring expansion of mediation usage hit a major hurdle.
Third, to get around Halsey and still encourage mediation, English courts and rule-makers generated a complex array of case law about the costs consequences of unreasonably refusing to mediate.4 The front door was closed, so side doors were opened by case law and rules, a mix of incentives for mediating and negative consequences for refusing inappropriately. Successful parties, for example, could suffer a reduction of the costs that they would normally have won. Case law proliferated on whether parties had unreasonably resisted mediating, how much they had resisted, whether it was appropriate to resist or delay, etc.
In Churchill, the ECA was asked to take a fresh look at the question, with significant interventions from ADR and legal stakeholders (the Law Society, Bar Council, Civil Mediation Council, CEDR, and the Chartered Institute of Arbitrators) amongst others. This august array of legal voices was not brought to bear on a multi-billion pound commercial dispute, but rather on a Welsh local council decision from Merthyr Tydfil about a property-line-crossing infestation of the shy, but apparently not retiring, Japanese Knotwood.
So yes, the current leading English decision on mandatory mediation is about the spread of an allegedly noxious weed.
The claimant in Churchill resorted directly to the courts to allege damage in nuisance caused by the inattention of their neighbouring property owner (the Council), bypassing the Council’s Complaint Procedure. The Council then sought a stay of proceedings, arguing that their complaint process had to be used.
The deputy district judge held that the court was bound by Halsey and that obliging unwilling parties to mediate would be an “unacceptable obstruction on their right of access to the court.” This finding set up the debate at the Court of Appeal.
According to the ECA, the Halsey comments about mediation were obiter, and not binding.
The ECA then directly addressed the question of whether the court can “lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process?” (like mediation), without violating the ECHR. Ultimately, the ECA held that such orders could be made, so long as “the order made:
- Does not impair the very essence of the parties’ right to a fair trial,
- Is made in pursuit of a legitimate aim, and
- Is proportionate to achieving that aim.”
Whether the dispute resolution process is statutory or not does not matter.
The ECA left the details of how and when to make such an order to the discretion of each court facing the issue, albeit citing a non-exhaustive list of relevant factors that could be considered:
- 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,
- 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 resources, 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,
- The reasonableness and proportionality of the sanction, in the event that a party declined ADR in the face of an order of the Court.
The ECA held that future courts will be “well qualified to decide whether a particular process is or is not likely or appropriate for the purpose of achieving the important objective of bringing about a fair, speedy and cost-effective solution to the dispute and the proceedings, in accordance with the overriding objective.”
Going forward, new doors for mediation are now open in Commonwealth regimes, though it is unclear exactly how those doors will be used. The UK may join a growing list of countries (Canada, USA, Italy, Austria, etc.) that have forms of mandatory mediation in their courts and related dispute resolution systems. A new array of UK ADR case law, court rules, and legislation may be coming.
[1] Art. 6 of the ECHR states, “1. In the determination of his civil rights and obligations …, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. …”
[2] Pressure has mounted from lawyers, courts, legislators, ADR organizations and others. See the Civil Justice Council’s June 2021 Compulsory ADR report, as just one of the more recent examples.
[3] Harry Woolf, Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (HMSO 1996).
[4] For just a few examples, see Re Midland Linen Services Ltd, Chaudhry v Yap and others [2005] EWHC 3380 (Ch); LMS International Ltd and others v Styrene Packaging and Insulation Ltd and others [2005] EWHC 2113 (TCC), [2006] BLR 50; P4 Ltd v Unite Integrated Solutions Plc[2006] EWHC 2924 (TCC), [2007] BLR 1 TCC; Carleton and others v Strutt and Parker (a partnership) [2008] EWHC 424 (QB); Richards and another v. Speechly Bircham LLP and another [2022] EWHC 1512 (Comm), HHJ Russen QC; Epoq Legal Ltd v. DAS Legal Expenses Insurance Co Ltd [2022] EWHC 1577 (Comm).
Paul Godin is the Victoria-based founder of Katalyst Resolutions. He is an experienced mediator, lawyer, conflict coach, and investigator, with more than 20 years of global experience training professionals on negotiation, conflict resolution and coaching skills.
