Should parties be compelled to undertake Alternative Dispute Resolution?

The leading case of Halsey v Milton Keynes General NHS Trust [2004] is brought into question some 19 years later.

We are all very familiar with the overriding objective of the Civil Procedure Rules 1998, as can be found in part 1, which requires the parties of each claim, amongst other things, to utilise the use of Alternative Dispute Resolution (“ADR”) and attempt to settle the matter at every opportunity. We are also familiar with the Court’s ability under Civil Procedure Rule 44.2 to consider the parties’ attempts to settle the matter when discussing the costs to be awarded to one, or both, parties of the claim. 

Despite the overriding objective and the clear consequences should a party fail in attempting to settle the claim, parties utilising ADR has historically been low. The leading case of Halsey v Milton Keynes General NHS Trust [2004] EWCA 576 (“Halsey”) did not help when encouraging parties to be open and willing to mediate.

By way of a reminder, the successful party within Halsey refused to mediate throughout the proceedings and was insistent in the matter continuing to trial. The general rule is that costs follow the successful party. However, the Courts are to consider Civil Procedure Rule 44.2 when discussing costs and in particular, the parties’ willingness to mediate. Despite the successful party within Halsey refusing to mediate, they were awarded their costs regardless and the appeal filed was later dismissed on the basis that the general rule should not be departed from unless the successful person had acted unreasonably, to which the unsuccessful party now has a burden to prove. The deciding Judge within the dismissed appeal ruled that forcing parties to mediate would be in breach of the right to a fair trial under Article 6 of the European Convention on Human Rights. The case of Halsey also introduced factors to consider when deciding whether a party has acted unreasonably and placed a further burden on the unsuccessful party to prove that mediation would have had a chance of success.

The case of Halsey was seen to be a barrier in some respect and in contradiction to the overriding objective. 

The topic of mediation and the case of Halsey has arisen again some 19 years later due to the recent case of Churchill v Merthyr Tydfil County Borough Council (“Churchill”), together with the Ministry of Justice’s recent confirmation that mediation will be compulsory (and free) in respect of all claims that fall within the small claim track.

The case of Churchill involved Mr Churchill bringing proceedings against the local council for the cost of removing Japanese Knotweed located within his property, together with damages for the interference and any loss of value regarding his property. Within the proceedings, the local council requested that the claim be stayed whilst Mr Churchill’s disputes are considered within the local council’s internal complaints procedure. The Court however refused to stay the claim as requested on the basis that the leading case of Halsey did not give him such power. The local authority appealed the decision made on the basis that Mr Churchill should have exhausted their complaints procedure prior to issuing proceedings as a form of ADR and in accordance with the overriding objective. The arguments were heard by the Court of Appeal early November 2023 and Judgment has yet to be handed down. 

The forthcoming decision is an important one, so much so that three separate bodies (the Civil Mediation Council, Chartered Institute of Arbitrators and Centre for Effective Dispute Resolution) were given permission to intervene and submit their written arguments before the Court of Appeal in the hope that the barrier that is the case of Halsey will be overruled. If the Court of Appeal does in fact overturn the decision made in Halsey and uphold the appeal, greater power will be given to Judges to order the parties to take part in Alternative Dispute Resolution, not to mention the Court will have more of a discretion to depart from the general rule of awarding costs to a successful party if they have refused to mediate. Further, the approach to be taken moving forward should the appeal be upheld is more fitting with recent reports given by the Civil Justice Council whereby it was concluded that compelling parties to mediate does not result in a breach of Article 6 of the European Convention of Human Rights as thought in the case of Halsey. 

On the other hand, will compelling parties to mediate simply add another layer of costs within claims which are uncapable of being settled and require a trial? This in itself could result in a contradiction of the Courts obligation for claims to be dealt with at a proportionate cost. 

Nineteen years after the leading case of Halsey, a new approach to ADR could be impending. 

Written by Danielle Armstrong, Solicitor

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