Alternative dispute resolution takes centre stage

On 1 October 2024, the Civil Procedure Rules (CPRs) were updated to reflect the decision handed down by the Court of Appeal in the case of Churchill v Merthyr Tydfil, in which it was held that the courts can stay proceedings and order parties to engage in alternative dispute resolution (ADR). 

The updates to the Civil Procedure Rules include: 

• CPR 1.1(2)(f) and CPR 1.4.(2)(e) to incorporate the promotion and use of ADR into the overriding objective and the courts’ active case management duties;
• CPR 3.1(2)(o) to empower the courts to order parties to engage in ADR, as a part of its general case management powers;
• CPR 28.7, CPR 28.14 and CPR 29.2 (1A) to direct the courts to consider whether to order parties to engage in ADR, as a potential direction in regard to intermediate, fast-track or multi-track claims; and
• CPR 44.2(5) to permit the court to consider whether a party has ‘unreasonably failed’ to engage in ADR, when exercising its direction as to costs. 

The recent trend

The decision in Churchill and the amendments to the CPRs come as no surprise and are consistent with the general trend in English law over the past decade or so, which has seen the judiciary and legislative powers combine to place an ever-increasing obligation upon parties to engage with ADR.

In theory, therefore, practitioners should see a further increase in the use of ADR (the most common form of which is mediation), in light of the amendments to the CPRs, with parties potentially fearing court sanctions, in accordance with the court’s new case management powers, for a failure to use ADR. 

There is no fixed, statutory definition of ADR; however, in most cases, it will be considered to be mediation, although in some, expert determination or early neutral evaluation may be more appropriate. Negotiation also falls within the ambit of ADR; however, as to how the courts will evaluate this less structured, more informal means of ADR, when assessing whether parties have engaged in ADR, is unknown at this stage. 

The way forward

However, as ever, it remains to be seen as to whether the theory, which is well-reasoned and well-intentioned, will translate effectively in practice. 

As to how and when these powers will be exercised by the courts remain to be seen, as the amendments that have been made to the CPRs are intentionally non-prescriptive, so as to give the courts wide discretion to exercise their new case management powers as they see fit. For example, the courts could conceivably use their new powers to expressly order parties to engage in ADR, but in reality, it seems more likely that a court will stop short of expressly doing so, but instead order a stay of proceedings to allow parties to engage in ADR (which nonetheless could be seen as an implicit order by the court to engage in ADR).