Churchill v Merthyr Tydfil County Borough Council - Court of Appeal Decision 29 November 2023

Little did Mr Churchill appreciate how he would change the law when he refused in January 2021 to refer his claim for encroachment of Japanese knotweed against his Local Authority to their Corporate Complaints Procedure.

Nearly 3 years later, following a 3-day hearing also involving the Law Society, the Bar Council and various other interested parties and attended by a total of 13 Leading and Junior Counsel, the Court of Appeal has decided that a court can lawfully order litigating parties to engage in a non-court-based dispute resolution process i.e. Alternative Dispute Resolution (“ADR”).  

The Court of Appeal declined to follow the decision in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576 in which the court took the view that parties could not be forced to go to ADR against their will (as this would place an unreasonable obstruction to their right of access to the court) as it decided that these comments were simply obiter. It held the court had the power to control its own process and can make orders  to make the court system accessible, fair and efficient. It took particular note of how the court rules and costs recovery are based upon parties seeking to settle their differences  both before and after commencing proceedings in accordance with the overriding objective of dealing with cases justly and at proportionate cost. 

The judgment determines that the court can, in appropriate cases,  lawfully stay proceedings for ADR “provided that the order made does not impair the very essence of the claimant's right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost”.  This appears to align with the overriding objective under the CPR and highlights the court’s ability to “actively manage” cases to achieve that objective.

Is this particular form of management really going to encourage settlement, or simply increase costs for all parties involved? Perhaps the answer to that question lies in how the courts will decide to use such powers. An arbitrary list of the types of cases and/or situations in which a court should impose ADR would likely lead to the latter result. The Court of Appeal, however, declined to set out fixed principles as to what will be relevant when determining whether to go down this route . They did state that issues raised by The Bar Council, Mr Churchill and those in Halsey will be relevant e.g. the form of ADR being considered, whether the parties were legally advised or represented or whether ADR was likely to be effective or appropriate without such advice or representation etc., although it is made clear that other circumstances will be taken into account. The courts will also be able to order any type of ADR, which should also assist with tailoring the decision to the case and the parties involved. 

Overall, given that it seems as though the courts will look at every case individually, take into account all factors relevant to that case and consider all types of ADR, this decision may lead to parties incurring less time and costs going through the court process, especially lengthy trials. However, given that the courts have very limited background knowledge when it comes to cases and parties, it may still be a concern that the courts will impose ADR when it is simply not suitable for the parties in question. 

It does, however, seem clear now that the default position has changed. A party will generally be expected to have to participate in ADR and will have to make a good case not to do so. 

As always, parties should consider ADR (which could include an internal complaints procedure) early on in the dispute process and make every effort to avoid issuing proceedings. If this is done properly, then it may dissuade the courts from ordering ADR later on in the process. 

Ironically, the Court of Appeal held that it would not stay Mr Churchill’s claim for various reasons particular to it.