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In a landmark decision in late November, Churchill v Merthyr Tydfil County Borough Council  EWCA Civ 1416, the Court of Appeal held that courts can order parties to engage in Alternative Dispute Resolution (ADR), or stay proceedings to enable them to do so, so long as the order does not impair the claimant's right to a fair trial and is proportionate to achieving a legitimate aim. The court declined to lay down fixed principles as to when the power should be exercised, noting many factors may be relevant.
The decision overturns what was thought to be an English law prohibition on courts compelling ADR. The court held that comments to that effect in the 20-year-old Halsey judgment (Halsey v Milton Keynes NHS Trust  EWCA 576) were not a necessary part of the court's reasoning and do not have to be followed. The court's decision is consistent with other efforts to promote ADR, such as the Civil Justice Council working group report referred to below. For more information, read our blog post here.
In August, a Civil Justice Council working group issued a report recommending substantial changes to the regime of pre-action protocols which parties are expected to follow before civil proceedings are commenced in the English courts. The thrust of the proposals is to increase the role pre-action protocols play in civil proceedings by making their requirements mandatory and formalising their status under the Civil Procedure Rules.
Most controversially, the report proposed that the current obligation to consider the potential for ADR should be replaced by an express obligation to undertake a pre-action mediation or some other dispute resolution process, with a default requirement of an inter-party meeting. The working group will, however, consider in the second phase of its review whether a more flexible bespoke pre-action protocol should be created for complex commercial cases in the Business and Property Courts. For more information, see our blog post here.
On 3 May 2023, the UK signed the UN Convention on International Settlement Agreements Resulting from Mediation (commonly referred to as the Singapore Convention). The Convention aims to establish a global framework under which member states' courts will enforce mediated agreements to settle cross-border commercial disputes, regardless of where in the world the mediation took place. Once the Convention is in force for the UK, the English courts will enforce such mediated agreements (if within scope) directly, without the usual need to commence proceedings for breach of contract.
The UK Government is yet to publish its proposals for the implementing legislation and court rules that will be necessary before ratifying the Convention. It will then come into force in the UK six months after ratification. The UK's decision to join the Convention should reassure foreign parties as to the English courts' endorsement of mediation and hopefully encourage other jurisdictions to join the Convention. For more information see our blog post here.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2024