On October 1 2024, changes to the Civil Procedure Rules (CPR) came into effect following the decision of the Court of Appeal in the landmark case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (‘Churchill’). In that case the Court of Appeal ( comprising the Lady Chief Justice , the Master of the Rolls and Lord Justice Birss ) confirmed that a Court can order parties to a dispute to engage in alternative forms of dispute resolution without obstructing their right to a fair and public hearing under Article 6 of the European Convention on Human Rights.
The Civil Mediation Council , the Chartered Institute of Arbitrators and CEDR all intervened in Churchill such was its importance to the use of ADR.
These recent CPR changes incorporate the promotion and use of ADR within the Civil Justice system of England and Wales and clarify the Courts' case management powers as regards ADR.
Churchill
The Court of Appeal's decision in Churchill (see our DWF Insight: Compulsory out of court dispute resolution?), departed from the long-standing principle in the case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, in which the Court of Appeal had said that "to oblige unwilling parties to refer their disputes to mediation would unacceptably obstruct their right of access to the court". In Churchill the court held that those comments by Dyson LJ in Halsey had been obiter and were therefore not binding.
The Civil Procedure Rule Committee (CPRC) subsequently drafted the changes to the CPR to reflect the decision in Churchill and the court's powers to order parties to take part in a non-court-based dispute resolution process.
The amendments to the CPR
The key changes can be summarised as follows:
- CPR1.1(f): The most significant change concerns the overriding objective at CPR 1.1 which "enables the court to deal with cases justly and at a proportionate cost”. This has now been extended to include (as far as is practicable) "using and promoting alternative dispute resolution" thus enshrining the use and promotion of ADR into the overall objective of the civil justice system
- CPR 1.4(2)(e): Active case management by the courts now includes "ordering and encouraging the parties to use, and facilitating the use of, alternative dispute resolution".
- CPR 3.1(2)(o): Dealing with the courts' case management powers, the court may "order the parties to participate in alternative dispute resolution". This new rule clarifies the position established by Churchill.
- CPR 28: (Directions in fast/intermediate tracks) and CPR 29 (multitrack) now requires the court to consider whether to order or encourage the parties to engage in ADR.
- CPR 44: Adding to CPR 44.2(5)(e) that the court's costs discretion may consider "whether a party failed to comply with an order for ADR, or unreasonably failed to engage in ADR." This new provision is pertinent when the court is considering the conduct of parties for the purposes of costs.
Impact
These changes to the CPR place the promotion and use of ADR front and centre of the Civil Justice system and provide courts with attendant case and costs management powers to strongly encourage parties to have ADR in mind at all times and to use it. Parties will have to include ADR as part of their dispute resolution strategy and those who refuse to participate in ADR run the risk of cost sanctions from the court. This pivotal shift towards the growing recognition of ADR's ability to deliver timely and cost-efficient outcomes may, in turn, relieve pressure on the courts’ current caseloads.
Conclusion
Parties to litigation can expect applications to be made asking for ADR to be ordered and for courts to make such orders of their own volition. One instance was the decision late last year after the introduction of the CPR changes in a case brought under the shorter trials scheme. In DKH Retail Ltd v City Football Group Limited [2024] EWHC 3231 Mr Justice Miles ordered at the Pre Trial Review that a mediation should take place before the imminent trial and that the parties had to report to the court on progress. The last paragraph of the judgment records that the case did in fact settle pre-trial. It is too early to report on whether this will be a growing trend and how else the courts will approach the new rules.
For further information please contact the authors:
Devon Thompson – Trainee Solicitor
Sheona Wood - Partner
