Court of Appeal confirms mandatory ADR is here to stay

The latest developments in the case of James Churchill v Merthyr Tydfil County Borough Council [2023] EWCA CN1416

What was the situation before the decision in this case?

We reported in 2021 on the Civil Justice Council's report regarding mandatory ADR. One of the issues the report addressed was whether parties can lawfully be compelled to participate in an ADR process. The legality of this was considered by the Court of Appeal in Halsey v Milton Keys [2004] 1 WLR 3002. The Court of Appeal decided that the parties could not be compelled as this would "impose an unacceptable obstruction on this right of access to the court" The report disagreed with this and recommended that mandatory ADR be "encouraged".

What is the decision in the Churchill case?

The Court of Appeal ruled that the courts can stay proceedings to order parties in dispute to engage in ADR, including mediation. The key points were as follows:

• It found that the comments made by Lord Justice Dyson in Halsey were obiter and therefore not binding on the lower courts. It also found that ordering compulsory mediation does not breach Article 6 of the ECHR, the right to a fair trial.
• 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.
• The court declined to lay down fixed principles as to what will be relevant to determining the questions of a stay of proceedings or an order that the parties engage in ADR. It acknowledged that a number of factors would be relevant including the nature of the process contemplated.

So what impact might this have?

The Ministry of Justice has already announced that it will be introducing mandatory mediation for civil claims in the County Court up to £10,000, starting with specified money claims. This is the first stage of a plan to progressively integrate a mandatory mediation step into higher value claims in the County Court. A new procedure has also been introduced in the Employment Tribunals of England and Wales allowing judges in complex claims to require the parties to participate in an ADR process.

This decision has now opened the gate to introducing compelled ADR more widely, including in more complex cases. The report of the Civil Justice Council recognised, however, that there are further issues to consider, including whether a mandatory process would be appropriate only in certain types of cases. We expect there to be further consultation on the matters raised in the report following this decision.