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New rule changes embolden Court's approach to Mediation
From 1 October 2024, there have been changes to the rules which govern how civil claims are dealt with. The latest round of Civil Procedure Rules (“CPR”) changes have sought to embolden and embed promotion of Mediation and other forms of alternative dispute resolution (“ADR”) by giving Judges more power to order that parties engage in them. This follows the case of Churchill v Merthyr Tydfil Borough Council [2023] EWCA Civ 1416.
What did Churchill v Merthyr Tydfil Borough Council say?
This case overturned the long standing understanding that Courts could not order a party to engage in ADR, as to do so would impeach their rights to a fair trial. They could merely encourage them.
The Court of Appeal in Churchill held that the Court could now lawfully stay proceedings to allow the parties to engage in ADR, provided that did not impair their rights to a lawful hearing and was proportionate to achieving the aim of resolving the dispute quickly, fairly and at a reasonable cost.
So what do the new changes say?
The CPR changes now embed what the Judges have said from Churchill and incorporated the principles into the rules.
The overriding objective of all civil claims has been expanded to include the use and promotion of ADR. As anyone knows who has been involved in any litigation recently, parties have been encouraged to engage in ADR for some time. However, now it is formally part of the overriding objective this means that Judges can Order that parties engage in it rather than simply encouraging them to do so. Obviously the Judges will take into account the appropriateness of ADR in the circumstances of the case, but we think there will be only limited circumstances where it won’t be considered appropriate.
This means that when the Courts are making Directions (setting down a timetable of steps which the parties must do to get to trial), they can consider whether to order, or encourage the parties to engage in ADR.
It has long been understood that a consequence of failing to engage in ADR would be a risk that you would not be awarded some or all of your costs even if you were later found to be successful in your claim. The Court’s powers have been enshrined now in the new rule changes and when considering their discretion on whether to Order costs, Judges may consider “….whether a party failed to comply with an Order for [ADR] or unreasonably failed to engage in [ADR].
What do the changes mean?
At Pearson Hards we always tend to encourage parties to engage in ADR or mediations, even if it may seem like the parties are too far apart. For the majority of cases they are an effective way to resolve a dispute and bring matters to a head. Even if they do not actually settle the claim, they are often a very useful tool to better understanding the other parties’ case or motives behind their case.
Where we have got an opposing party who is reluctant to engage in ADR, then these rule changes will be a helpful tool to use.
If you have a mediation or dispute you would like assistance with then please contact Claire Darby or Isaac Leigh-Haworth on 0208 949 9500 or cdarby@pearsonhards.co.uk or ileighhaworth@pearsonhards.co.uk.
