A new approach to Alternative Dispute Resolution

The Court’s view on the role that Alternative Dispute Resolution (ADR) plays in court proceedings has recently changed. Previously, as established in the case of Halsey v Milton Keynes General NHS Trust [2004], parties could not be forced to engage in ADR. This was the status quo until the issue was reconsidered in the case of Churchill v Merthyr Tydfil County Borough Council [2023].

Darren Higginson, Partner in Coodes’ Dispute Resolution team, explores the implications of this case and how it changed the Court’s view on ADR in court proceedings.

What is Alternative Dispute Resolution?

Whilst mediation is arguably the most common form of ADR, there are other forms which are equally as useful to parties in different types of legal proceedings.

ADR falls within two categories – facilitated processes and imposed decision processes.

Facilitated processes include conciliation, mediation, early neutral evaluation and negotiation. Most facilitated processes involve a third party who can give advice and suggest settlement terms. Moreover, in early neutral evaluation, they can also give their opinion about the merits of a claim. All the advice given by the third party in facilitated processes is non-binding.

Imposed decision processes include arbitration, adjudication and expert determination. As with most facilitated processes, a neutral third party is involved. However, they are able to make binding decisions, rather than being limited to an advisory role.

Churchill v Merthyr Tydfil County Borough Council [2023]

Churchill v Merthyr Tydfil County Borough Council involved a dispute about Japanese knotweed. Mr Churchill owned a property next to land owned by the Council. Unfortunately, the Council’s land had an issue with Japanese knotweed.

Japanese knotweed is an invasive plant species in the UK that spreads rapidly. In summer, the stems can reach over 7ft tall. It suppresses other plants and can damage root systems and is difficult to remove and eradicate.

In this case, the knotweed had spread to Mr Churchill’s land and so he issued proceedings against the Council. They applied for a stay of the proceedings because they felt that Mr Churchill ought to have used their complaints procedure in the first instance.

The Court rejected the Council’s application for a stay on the basis that forcing someone to engage in ADR created an unreasonable barrier to their right to take the matter to court.

The decision not to grant a stay was appealed by the Council. The Court of Appeal found that it could lawfully order parties to engage in a non-court-based dispute resolution process. This included the Council’s own complaints procedure.

Recent changes to Civil Procedure Rules

Churchill v Merthyr Tydfil County Borough Council has recently been brought back into the spotlight because the Court of Appeal’s decision was further cemented by recent changes to the Civil Procedure Rules (CPR). These are the court rules which most legal disputes must follow.

From 1 October 2024, the courts can now ‘order or encourage’ parties to use ADR. Previously, they had only been able to ‘encourage’ parties to do so. Courts are now also able to order parties to use ADR when giving directions during Case Management Conferences.

The rules have also changed to allow courts to consider awarding costs to a party to litigation where another party has failed to engage in ADR without a reasonable excuse.

The future of Alternative Dispute Resolution

What do the outcome of the Churchill case and changes to the CPR mean for the future of ADR? They highlight the importance of ADR and courts have greater powers to pause litigation. They can order parties to try and settle their differences between themselves first.

However, ADR will not be ordered in every case, and there are some exceptions which give the court a discretion. For example, where one or more parties cannot afford to pay for ADR. Similarly, even though parties can be made to engage in ADR, the Court cannot force them to agree a settlement. Therefore, they will still have the right to a trial if no agreement can be reached.

While some are concerned that ADR could become a ‘tick box’ exercise, where a party may attend with no intention of settling a dispute, the new rules strike a balance between encouraging settlement and preserving the parties’ rights to have the dispute decided by a judge.

For more information on Alternative Dispute Resolution or Civil Procedure Rules, get in touch with both Coodes’ Commercial Disputes and Disputes teams. Alternatively, get in touch by filling out our online contact form.