Although Churchill v Merthyr Tydfil [2023] EWCA Civ 1416 is concerned with the power to compel parties to engage in alternative dispute resolution (ADR) during court proceedings, it may also be relevant to the pre-action stage of disputes. This is because pre-action protocols have become increasingly interconnected with the court process (see Jet2 Holidays Ltd v Hughes [2019] EWCA Civ 1858), and, consequently, the parties’ pre-action conduct can have a direct impact on subsequent court proceedings. In this article, we consider the Civil Justice Council’s review of pre-action protocols, and the relationship between the pre-action stage and the potential impact on the parties’ post-action ADR obligations following the decision in Churchill.
CJC review – Final Report (Part I)
In Review of the Pre-action Protocols – Final Report (Part I) 2023, which was published three months before the Churchill decision, the CJC recommended the introduction of a new general pre-action protocol which would require the parties to complete the following three sequential procedural steps before issuing proceedings:
i. early exchange of relevant information;
ii. engagement with a dispute resolution procedure; and
iii. if the matter cannot be settled, the parties should complete a stocktake with a view to narrowing the issues in dispute.
In respect of the parties’ dispute resolution obligation, paragraph 4.14 of the proposed general pre-action protocol exempts parties from any future requirement to engage with ADR if they have attempted ADR at the pre-action
stage. Paragraph 4.14 states: ‘Where the parties have engaged in mediation under this protocol [or any other dispute resolution process involving the assistance of a neutral third party such as early neutral evaluation, an Ombudsman etc], and the dispute does not settle, then the parties will not be required to engage in another mediation if court proceedings are started.’ (Emphasis added.)
This exemption applies to low-value disputes that have already been through a pre-action ADR process. However, Churchill potentially alters the position in paragraph 4.14 for higher-value claims because when proceedings have been issued the courts retain the power to order the parties to engage with ADR regardless of whether they have attempted ADR at the pre-action stage. Two recent post-Churchill decisions support this observation.
Post-action and Churchill
In Heyes v Holt [2024] EWHC 779, the parties had attempted mediation before issuing proceedings but were unable to settle. HHJ Matthews, sitting as a judge of the High Court, ordered the parties to engage in a further mediation when he said: ‘This is a case which cries out for mediation by the parties. I am aware that mediation has already been attempted between the parties… and on that occasion it failed. I commend them nevertheless for trying. But that was before the claim had even been issued. Now that the parties have full pleadings and disclosure, as well as (for what it may be worth) this judgment, the parties should try again. I will order a stay for that purpose.’
Similarly, in Francis v Pearson [2024] EWHC 605 (KB) HHJ Matthews, sitting as a judge of the High Court, ‘strongly recommended’ that the parties engage with a second mediation. As HHJ Matthews explained: ‘Experience shows that it is often in entrenched cases such as this that ADR can make a real difference, often requiring honest conversations with parties as to the merits of their respective cases, and the potential downsides, as well as looking at pragmatic ways forward…
‘I would strongly recommend that the parties reconsider some form of alternative dispute resolution process – which might include further mediation, or some other way of facilitating agreement – before matters in this case move forward and further costs are incurred.’
Thus, there are early signs that the courts may be willing to exercise their powers to compel parties to ADR even though they may have complied with their ADR obligations under a relevant pre-action protocol. This willingness is likely to increase, especially following the changes to the Civil Procedure Rules, which make clear that the court can order the parties to engage with ADR (see ‘Churchill and new ADR rules’, tinyurl.com/3ck8xyp3).
Masood Ahmed is an associate professor of law at the University of Leicester, and a member of the Law Society’s Dispute Resolution Committee. Lal Akhter is director of Docket Live and an unregistered barrister
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