Will mediation become compulsory?
Two recent developments in the area of dispute resolution have brought the question of mandatory mediation back into the spotlight and we have previously written about the topic here. The first development involves three leading mediation bodies being given permission to intervene in an upcoming Court of Appeal case which could overturn the 19-year-old precedent which prevents the courts imposing mandatory mediation on the parties to a dispute. The second development is the Ministry of Justice’s (MoJ) announcement on 25 July 2023, which confirmed that mandatory mediation will be introduced to certain case in the near future. We consider the implications that these changes may have on the resolution of disputes below.
The current position with mediations
The longstanding Court of Appeal decision in Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 (‘Halsey’) prevents the courts from requiring the parties to a dispute to engage in mandatory mediation. This is even in circumstances where it would be in the best interest of the parties, for example where it would reduce legal costs and achieve a quicker result. Halsey was decided on the basis that any mandatory requirement for parties to mediate would be a breach of the right to a fair trial under the European Convention on Human Rights (which the UK remains a party to post-Brexit).
This has remained the legal position up to now, with the courts relying on the Halsey decision in various cases to conclude that it does not have the power to compel parties to mediate.
However, this situation may be about to change as a result of a little-known case involving Japanese knotweed. In the more recent case of Churchill v Merthyr Tydfil County Borough Council (‘Churchill’) the court rejected the defendant’s argument that the claimant should have pursued Alternative Dispute Resolution (‘ADR’) options (which includes mediation) before pursuing a claim through the courts. The court allowed an appeal of its decision to proceed straight to the Court of Appeal so that the important issue of mandatory mediation can be given higher judicial consideration.
The appeal will be heard later in 2023 and the Civil Mediation Council (‘CMC’), the Chartered Institute of Arbitrators (‘CIArb’), and the Centre for Effective Dispute Resolution (‘CEDR’) have been granted the right to intervene in the Churchill case, so as to enable them to try and overturn the decision in Halsey. If successful in their intervention, the CMC, CIArb and CEDR hope that the court will be free to compel parties to mediate even if the parties do not wish to do so.
This will be a case worth watching in the coming months. The implication for parties remains uncertain, but it is clear that the direction of travel for litigation is towards the introduction of some form of mandatory mediation. This is supported by the recent MoJ announcement which we consider below.
Compulsory mediation for civil claims up to £10,000
The MoJ’s recent announcement comes after much consultation about whether mediation should be mandatory in certain cases. The short answer from the MoJ is ‘yes’ and that it should apply to all money claims up to £10,000. The MoJ aims to implement the new regime for specified money claims in the current Parliament (which will end no later than 17 December 2024) and sanctions could be imposed on parties who do not comply with the requirement to mediate.
Under the framework proposed by the MoJ each party will be required to attend a separate one-hour telephone session with a free mediator provided by the court. If an agreement is reached, then a legally binding agreement will be registered with the court. If no agreement is reached, the dispute will be heard by a judge in the same way as it is currently.
How the requirement to mediate will work in practice under the MoJ’s current proposals remains to be seen. The risk is that mediation in these types of claims may become a simple ‘tick box’ exercise, and something to be dealt with as quickly as possible before the matter can return to the court to be advanced.
Comment
Recent developments are all pointing to the introduction of compulsory mediation and businesses should be aware of this option as a means to resolve a dispute either before court proceedings are issued or as part of that process.
Even though mediations are not currently mandatory they can represent a cost and time effective way to resolve a dispute and this option should always be kept under consideration – as discussed in our previous update about ‘When is the right time to settle your commercial dispute?’
The Disputes team at Greenwoods are highly experienced in dealing with court claims and also mediations. This means that regardless of the changing legal landscape we can guide you through both the litigation process and any ADR processes which may be proposed during the lifetime of a dispute, ensuring you get the right advice at the right time. Please get in touch.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. Greenwoods Legal LLP is a Limited Liability Partnership, registered in England, registered number OC306912. Our registered office is Queens House, 55-56 Lincoln’s Inn Fields, London, WC2A 3LJ. A list of the members’ names is available for inspection at our offices in Peterborough, Cambridge and London. Authorised and regulated by the Solicitors Regulation Authority, SRA number 401162. Details of the Solicitors’ Codes of Conduct can be found at www.sra.org.uk. All instructions accepted by Greenwoods Legal LLP are subject to our current Terms of Business. VAT Reg No: 161 9287 89.