You give me no alternative

James Churchill v Merthyr Tydfil County Borough Council

At the end of November, the English Court of Appeal addressed the question of whether a court can lawfully order parties to engage in non-court-based dispute resolution (this article will use the term ADR to refer only to processes designed to securing settlement, although it is often used to include adjudicative processes). The question arose in James Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 in circumstances where the local council had encouraged the claimant to adopt its complaints procedure before seeking recourse from the courts. The details of the claim itself are unremarkable and not relevant to the subject of this piece. Prior to litigation being commenced, the council told Mr Churchill that if he didn't follow their Corporate Complaints Policy and instead proceeded to seek remedies from the court, they would seek a stay and costs. In the event, that is exactly what both parties did.

At first instance the court considered itself bound by the dicta in the case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, where Dyson LJ had opined:

that basis, the court considered itself precluded from granting the stay, while also holding that Mr Churchill and his lawyers had acted unreasonably and contrary to the relevant pre-action protocol by failing to engage with that process. Permission was given to appeal on the basis that the question raised an important point of principle.

The Court of Appeal decided that the passage from Halsey quoted above was obiter and the judge was in error in considering himself bound to follow it (the case contains a usefully brief discussion on identifying the ratio decidendi of a decision). The court then turned to consider the question anew of whether a court can order parties to engage in a non-court-based dispute resolution process.

The thrust of Mr Churchill's argument was that mandating him to follow an extra-judicial process was a breach of his Article 6 right to a fair trial. The court considered three streams of cases: a) domestic cases; b) European Court of Human Rights cases; and c) pre-Brexit cases from the Court of Justice of the European Union.

The cases bore out the proposition that the right of access to the court might be subject to legitimate restrictions. Where there was a restriction of access it would be compatible with a party's convention right if it was a reasonably proportionate restriction to achieve a legitimate aim. It was noted that, where parties were compelled by the court to engage in ADR, their access to the court was delayed and not denied. The court rules contained provisions to promote the use of ADR, which was considered to be a legitimate aim.

The court ultimately endorsed the view expressed in a June 2021 Civil Justice Council Report on Compulsory ADR which said:

Having decided that the court can order parties to engage in ADR the court unfortunately declined to lay down general principles of when it should. A lack of willingness on the part of one of the parties appears to be something to which the English court may attach little weight, with the Master of the Rolls suggesting:

So where are we in Scotland with regards to mandatory ADR?

The legal establishment in Scotland generally seems far less enthused by the notion of compelling parties to take part in ADR processes. The Courts Reform (Scotland) Act 2014 empowers the Court of Session by Act of Sederunt to promulgate rules to "encourage" the use of ADR in both the Court of Session and the Sheriff Courts. However, there is no provision in the current ordinary court rules (or indeed any practice notes for ordinary actions) for either court to give such encouragement, far less to direct parties to participate in a process.

The Scottish Civil Justice Council is currently engaged in a project to rewrite these rules. It seems a cautious approach to referring parties to ADR will be adopted. In its second report on the project from June 2022, the Council unequivocally states: "The new civil procedure rules will not make ADR compulsory". Indeed, little change to the status quo is envisaged by the report. It specifically says that the new rules will ensure that the court has discretion not to encourage ADR when it is unsuitable and that the court's role in relation to ADR at case management hearings will be an "information gathering rather than a prescriptive one". The report also excludes the possibility of a rule providing for costs sanctions for failure to consider ADR (suggesting that the possibility of costs sanctions may be confined to a Practice Note).

This is likely to have caused disappointment in some quarters. In October 2018, the Justice Committee of the Scottish Parliament published a report on ADR in Scotland. The report recounted testimony heard during two evidence sessions that Scotland was "out of step" with other jurisdictions, where going to court was seen as a last resort, and that access to the adversarial system "is still too easy". Although that was not a view held by all participants. Despite clear support for a greater role for ADR in Scottish civil justice, the Committee concluded that parties shouldn't be compelled to participate in ADR.

Even Scotland's most vocal advocates for ADR tend to stop short of promoting mandatory engagement. In 2019 Margaret Mitchell MSP introduced a consultation on a private member’s bill which would have sought to increase the use of mediation in Scotland. In her proposal for the bill she spoke of being "firmly convinced of the merits of ADR" while also being "wholeheartedly" of the view that parties should not be compelled to participate. She described the notion of imposing cost sanctions on a party who unreasonably refused to mediate (described in the proposal as "implied compulsory mediation") as problematic, suggesting that it may necessitate an additional enquiry into the conduct of the parties.

Others believe a certain level of compulsion to be necessary to embed mediation in Scotland's dispute resolution culture. With the support of the Scottish Government, Scottish Mediation undertook a review of mediation in Scotland's civil justice system, producing its report in June 2019. The report proposed the introduction of primary legislation providing for "mandatory referral to mediation" with certain (rather narrow) exemptions. It's worth noting, however, that the detail of the recommendation explained that parties would only be compelled to provide initial information about the dispute to a mediator and then attend a meeting with them to determine whether they would consent to proceeding with mediation.

In response to the proposals produced by Scottish Mediation, the Scottish Government created the Scottish Dispute Resolution Delivery Group and evinced an intention to issue a public consultation on increasing the consistency and use of mediation in the civil justice system in Scotland in 2020. Covid got in the way of the group's progress, and it appears that the Scottish Government may have other legislative priorities in the short term. Although, curiously, the Rules Committee report referred to above contains a footnote that says "primary legislation may be introduced making ADR compulsory". Margaret Mitchell's private member's bill will also not see the light of day now that its proposer has stepped down as an MSP.

The picture is somewhat different when it comes to cases with the lowest pecuniary value. The Simple Procedure Rules (which apply to financial claims for no more than £5,000) allow sheriffs and summary sheriffs to refer parties to ADR. Specific provision is made to allow the referral to be made before any appearance in court takes place. There appears to be a level of inconsistency throughout the Sheriff Courts as to a) the frequency with which this provision is given effect to; and b) the terms in which the referral is couched. In some instances, orders may appear to unrepresented litigants as a requirement to complete a mediation process. Referrals from the shrieval bench are made to the University of Strathclyde Mediation Clinic and Edinburgh Sheriff Court Mediation Service (the latter of which will soon extend its provision such that mediation services will be available in all Sheriff Court districts in Scotland). Not all referrals result in the parties proceeding to mediation. The clinic's last annual report notes that of 342 referrals to them, 163 resulted in mediation (with a laudable 116 ending in settlement). Anecdotally, it appears that some unrepresented parties consider that there may be adverse consequences imposed by the court if they don't submit themselves to the process of mediation. This creates an onus on the service provider to either refer the case back to court as unsuitable or satisfy itself that the participant has given true informed consent to proceed.

In Scotland it seems Article 6 considerations were the least of the barriers to mandatory ADR processes. Rule changes or primary legislation may yet see some compulsion on parties to actively consider resolving their disputes by alternative means, but placing a requirement on parties to take their disputes somewhere other than court seems a long way off.

Written by Alan Sinclair, Partner in the Dispute Resolution team at international law firm Addleshaw Goddard.

The writer wishes to record his gratitude to Charlie Irvine of the University of Strathclyde Mediation Clinic for his time and insights.