In October 2024, the new Civil Procedure Rules (CPR), the law that governs all civil cases in England and Wales, came into effect regarding mediation.
This was following the landmark case in November 2023, of Churchill v Merthyr Tydfil Borough Council, in which the Court of Appeal held that courts can compel disputing parties to engage in mediation and other forms of Alternative Dispute Resolution (ADR). The clear message was that going to court should be a final resort, and that anyone involved in the legal process must try and sort their issues out without needing a Judge to do so. Preferably with the help of a trained professional, such as we have at Riviera Mediation.
The Court of Appeal ruled that courts can now make people mediate, provided that the court order does not (a) undermine the parties’ right to a fair trial; (b) is made in pursuit of a legitimate aim; and (c) is proportionate to achieving that aim.
The CPR has been amended so that the ‘overriding objective’ of the court to deal with a case justly and at a proportionate cost now includes ‘promoting or using alternative dispute resolution’. (Rule 1.1 (2) (f)).
Active case management by the courts now includes ‘ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution’ (Rule 1.4 (2) (e)).
The rules on procedural directions for fast track and multi-track cases (those above £10k in value) include the court’s need to consider whether to ‘order or encourage the parties to engage in alternative dispute resolution’ (Rule 28.7 (1) (d) and Rule 28.14 (f)
Crucially a Judge now must actively consider the conduct of the parties in relation to whether they have actively engaged in mediation for the purposes of whether which party should pay the legal (and other) costs in a case. The court must take account of ‘whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution’ (Rule 44.2 (5) e)).
It is far too early to see how this will now play out. What can be certain is that a party who refuses to engage in mediation or some form of ADR, either before a claim is issued at court, or during proceedings, could severely expose themselves to the risk of paying all of the other side’s costs, if it can be shown that pursuing a case to a final court hearing was unnecessary.
The courts can also still order parties to undertake ADR/Mediation as part of proceedings, even if they have already undertaken it unsuccessfully at a pre-court action stage (see Francis v Pearson [2004] EWHC 605 (KB)). The new CPR rules also allow a party in a dispute to request a court make an order for ADR regardless of the wishes of the other party. This is at the discretion of the individual judge – but given the growing importance of ADR it is very likely such orders will be made.
Finally, the court’s will carry on exercising their powers in costs to penalise any party who unreasonably refused to engage in mediation/ADR. There have been a number of court decisions recently (even prior to these new rules coming into effect): including Conway v Conway and another [2024] EW Misc.19 (CC) and Northamber PLC v Genee World Ltd and others [2024]. It is therefore pretty inconceivable that any legal team advising a party in a claim outside the small claims court would not advise their client tactically to engage at an appropriate stage in proceedings to offer mediation to the other side to try and resolve the dispute. My strong advice to solicitors would be to try to do this as early as possible, as if the other side does not properly engage, you would then be in a very strong position regarding all the costs that flowed following that request.
My prediction is that this will turn out to be the biggest change in the way cases are conducted in the civil courts, since the introduction of the Civil Procedure Rules, themselves, back in 1998. Over the coming year there will be more and more cases where parties’ pay heavily in costs for not engaging in mediation, and eventually almost all cases at court will be subject to ADR, and I very much hope most will resolve themselves through it.
Mediation and ADR save the courts a lot of money, but crucially for those engaged in the court process (the claimant or defendant) it offers far more control over the outcome, minimises the risk, the stress, the money spent and the time to get a dispute resolved. For anyone wishing more information please do not hesitate to contact me at: ben@rivieramediation.co.uk
Ben Tisdall
November 2024