We were delighted to host a webinar on alternate dispute resolution (ADR) following the Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, which was handed down on 23 November 2023. We explored the implications of this case, and what it means from a practical perspective.
Moderated by Neda Feather, PSL in our Dispute Resolution team, our panel of experts included:
You can or read on for the key insights from the session.
Iain introduced the case and noted that housing repair claims were not generally high value claims. The claimant, Mr. Churchill, noticed some Japanese knotweed growing on his property. Therefore, he instructed solicitors to commence proceedings against Merthyr Tydfil County Borough Council (the Council) for not taking any steps against the knotweed that was going onto his property. The Council asked Mr. Churchill to use the Council’s internal complaints process, which Churchill refused to do.
Before the lower court, the District Judge agreed with the Council that the internal complaints procedure should have been used. Churchill appealed the decision. There were seven interveners in this case, including the Law Society, the Bar Council, the Housing Law Practitioners Association, and the Social Housing Law Association.
The Court of Appeal held that proceedings may be stayed in favour of an alternative dispute resolution process even where one party objects to that approach. The court said it could do so provided that the order made:
View dispute resolution practice notes, precedents and news articles
Anna noted that the impact of this decision is that thought needs to go into whether ADR is the best way to do this, or if litigation is more appropriate.
There is also a caveat in the Court of Appeal’s decision in the sense that ADR may not always be the right route. Anna gave the example of multi-party proceedings how it may sometimes be more sensible to keep the cases on the same track. Anna mentioned Lancashire Schools SPC Phase 2 Ltd v Lendlease Construction (Europe) Ltd [2024] EWHC 37 (TCC) in which a contract included a compulsory ADR clause requiring both parties to explore adjudication at first instance prior to commencing proceedings. The defendants applied to stay the claim on this basis, but the court declined to do so. It was held that the case involved many claimants, multiple contracts and different cases that were dealt with on the court management timetable. The court explained that staying the claim to explore ADR would cause procedural difficulties given the circumstances.
From Rebecca’s experience, the timing for ADR can be at any time but generally the earlier, the better. Rebecca also highlighted that the Civil Procedure Rules already request the parties to consider ADR when appropriate. Case law has also shown that refusing another party's offer to mediate is not something to be lightly undertaken given the costs sanctions.
Churchill made it clear that there is a willingness from the courts that parties asses the use of ADR at any time.
Neda highlighted that Churchill was not solely about mediation, but about identifying the most appropriate ADR tool according to the circumstances of the dispute. She asked if the panel wanted to expand on this.
Iain agreed and said that Churchill was not a case about mediation, but rather ADR in general. In this case, there was an internal complaints procedure, and it was free for the complainant. Iain added that there are already many obligatory internal complaints processes in place which the consumers are required to follow prior to going to court (e.g. eBay, Amazon, etc.).
Looking into the future, Iain said that he was currently working on an appeal relating to a matter seeking to apply the Churchill guidelines to housing repair claims in general. He also referred to Hamon v University College London [2023] EWHC 1812 (KB) where the judge ordered an eight month stay to encourage the parties to engage constructively in ADR (this was not a mandatory ADR order).
Anna said that post-Churchill advice ought to be the same as the current advice is that disputes should be resolved in the most appropriate and proportionate manner. Churchill however may now mean the need to consider ADR is brought back into focus for lawyers and clients.
Rebecca mentioned that the government is also focussing on an ADR push (for example, compulsory mediation for small claims, with the aim to extend to larger claims in the future). There will also be a responsibility for institutions who offer ADR services and part of this could potentially include considering fixed-costs packages.
Want to hear more from the speakers? to catch up and hear the full discussion.
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