By Beverley Vara
The case of James Churchilll v Merthyr Tydfil County Borough Council concerned Japanese Knotweed which Mr Churchill claimed the Council had allowed to enter his garden from their land. The Council argued that the Claimant should have been compelled to use its dispute resolution / complaints service before bringing proceedings because the cost of litigation was disproportionate to the damages claimed.
This principle, of whether or not a Claimant is obliged to engage in ADR before bringing proceedings or whether they should be precluded from bringing or advancing a claim if they have not engaged in ADR (in breach of the relevant pre-action protocol), and if so what amounts to ADR is one of general application and that principle will be tested in the Court of Appeal with the hearing listed for the end of June this year.
In granting leave to bring the appeal before the Court of Appeal, Lady Justice Andrews anticipated that a number of interested groups may wish to intervene in the hearing, and indeed they are, as the point is an important one for access to justice as well as for ADR.
The context in which the appeal is being heard is that in June 2021 the Civil Justice Council produced a report on compulsory ADR. Whilst the authors of that report stressed that their report was not written to support any specific proposal, but rather to inform possible further reform and development in the area, it found that compulsory ADR is currently lawful (and not a breach of Article 6 ECHR) subject to a number of safeguards and in some circumstances could be seen to be desirable.
The factors they considered to be important in determining whether a procedural rule should introducing a compulsion to engage in ADR and/or a Court could properly require parties to engage in ADR were (i) the cost and time burden on the parties; (ii) whether the process is particularly suitable in certain specialist areas of civil justice; (iii) the importance of confidence in the ADR provider (and the role of regulation where the provider is private); (iv) whether the parties engaged in the ADR need access to legal advice and whether they have it; (v) the stage(s) of proceedings at which ADR may be required; and (vi) whether the terms of the obligation to participate are sufficiently clear to the parties to encourage compliance and permit enforcement.
They reported that any requirement to enter into an ADR procedure must be tempered with a safeguard that the procedure should not be binding. That is to say the ADR must be capable of ending without settlement and the parties return on their route to trial. They noted that access to legal advice enhanced the prospects of cases settling through ADR and considered how a strong recommendation to a party to seek legal advice should be introduced into the process.
Interestingly, and importantly they also noted that for such a compulsory ADR system to work the current situation where there is no requirement for an ADR professional, for example a mediator, to be regulated would have to change. Currently many commercial mediators are members of the Civil Mediation Council for example, but there is no requirement for them to be. The report hints that a Court approved and funded mediation panel might be a solution, although it is likely that in larger commercial cases this would be seen as an unjustified restriction on the parties’ right to choose.
Among the many important issues addressed by the report are (i) that not all types of case can be approached in the same way. For example, large commercial cases will almost always include an attempt at mediation by a day long (or longer) mediation with a regulated independent neutral before they reach trial whereas smaller cases may only warrant a time limited telephone mediation under the Small Claims mediation scheme. (ii) Often ADR is thought of as being synonymous with mediation, whereas the report stresses that other forms of ADR, such as Early Neutral Evaluation should be considered to. By considering ADR generally rather than private mediation specifically, the report finesses widely expressed concerns that the cost of mediation may be disproportionate to the case in hand in small cases.
In the Churchill v Merthyr Tydfel case, an internal complaints process is being considered and the Defendant is a Local Authority. Many commentators feel that an internal process is not sufficiently neutral to “count” as ADR, particularly in Housing cases against a Local Authority where there is an inherent power inequality between the parties. It may well be that different considerations apply in different contexts. For example many contracts have a dispute escalation process that requires different steps to be undertaken from negotiations at different levels of seniority through mediation/ arbitration before court proceedings are contemplated; so perhaps if the parties have equal bargaining power, an internal system is acceptable.
The CJC paper opined that “It would be helpful if the issue [of compulsory ADR] were to be addressed afresh by an appellate court and/or the legislature as soon as possible so that procedural reform can proceed with some certainty.” With Churchill v Merthyr Tydfel it seems they are now getting their wish.
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