Can the Courts Order Parties to Engage in Non-Court-Based Dispute Resolution Processes?
An interesting question has recently been answered by the Court of Appeal in England in the case of James Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416.
We know that the Courts can stay proceedings in favour of non-court-based dispute resolution processes, but can they lawfully to order them to engage in such processes? How about a non-court-based internal procedure operated by a local authority to which the claimant is not bound, where the Claimant does not consent? The answer is yes.
The Deputy District Judge that first heard the stay application did not think so, concluding that he was bound to follow Dyson LJ’s statement in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 to the effect that: “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction to their right of access to the court”
The Court of Appeal, however, having reviewed the European Convention on Human Right, the legislative backdrop, and the relevant European and domestic cases, took a different view, and found that the Courts could lawfully stay proceedings for, or order, the parties to engage in non-court-based dispute resolution processes, so long as the power is exercised “so that it does not impair the very essence of the claimant’s article 6 rights, in pursuit of a legitimate aim, and in such a way that it is proportionate to achieving that legitimate aim.”
The Court of Appeal reviewed the following factors submitted by the Bar Council as being relevant to the Court’s discretion: (i) the form of ADR being considered; (ii) whether the parties were legally advised or represented; (iii) 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; (v) the urgency of the case and the reasonableness of the delay caused by ADR; (vi) whether that delay would vitiate the claim or give rise to or exacerbate any limitation issue; (vii) the costs of ADR, both in absolute terms, and relative to the parties’ resources and the value of the claim; (viii) whether there was any realistic prospect of the claim being resolved through ADR; (ix) whether there was a significant imbalance in the parties’ levels of resource, bargaining power, or sophistication; (x) 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 (xi) the reasonableness and proportionality of the sanction, in the event that a party declined ADR in the face of an order of the Court. Having reviewed these various factors and Halsey, Birss LJ concluded:
“I do not believe that the court can or should lay down fixed principles as to what will be relevant to determining those questions. The matters mentioned by the Bar Council and Mr Churchill, and by the Court of Appeal in Halsey are likely to have some relevance. But other factors too may be relevant depending on all the circumstances. It would be undesirable to provide a checklist or a score sheet for judges to operate. They 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.”
This is an interesting case and one to keep in mind when advising clients to litigate in the face of non-court-based dispute resolution processes.
