Mandatory Mediation – are we there yet?

Introduction

It is commonly understood that solicitors have a duty to advise their clients about methods of settling a dispute out of court, including their recourse to mediation. The advantages of mediation over litigation are legion including saving time, money, retaining a degree of control over the outcome and, crucial to many commercial disputes, confidentiality. It has also been a long-established position in our jurisdiction, that parties should have access to the courts and that any step which denies a person access to the courts risks breaching Article 6 of the European Convention on Human Rights. The question is, in light of recent case law and owing to the world-changing pandemic Covid-19, is this position set to change and Are we edging closer to mandatory mediation?

The General Position

The general position is that the Court has no jurisdiction to force parties to mediate, as recognised in the important case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576.

That being said, the courts do actively encourage the use of ADR, including mediation, to assist with settlement.  In furthering the overriding objective parties are encouraged to use ADR if appropriate (CPR 1.4); they are additionally required by the Practice Direction – Pre-Action Conduct and Protocols to exchange sufficient information to ‘consider a form of ADR to assist with settlement’ (3(d)).  

In fast track and multi-track cases the relevant directions questionnaires require parties to declare whether they are willing to attempt to settle the claim and if not, they must state their reasons.  It is commonly understood that parties who unreasonably refuse to engage in ADR may be penalised in costs, see Halsey. There are numerous factors that the court will take into account when assessing costs which include the efforts made to resolve the dispute (CPR 44.4(3))

Mandatory Mediation – Post Lomax v Lomax

The landmark case of Lomax v Lomax [2019] EWCA Civ 1467 dealt with the question of whether the court could order an unwilling party to undertake Early Neutral Evaluation (ENE), a form of ADR.  Moylan LJ held that parties can be compelled to undertake ENE as part of the court process and, although other forms of ADR were not considered authoritatively, it seems highly likely that the same position will be adopted for mediation. The Chancellor of the High Court, The Rt Hon. Sir Geoffrey Vos, strongly hinted at this being the case in the recent matter of McParland & Partners Ltd and another v Whitehead [2020] EWHC 298 (Ch).

Crucially, any order to engage in ADR would not restrict access to the court; an order to mediate is not an order to settle – the aim is to attempt settlement.  

Covid-19 and the future for mediation

Although straightforward disputes, with few legal complexities or very narrow evidential issues may generally be heard at court within 6-12 months of a claim being issued, there are plenty which fall outside of this time frame.  On top of the inherent delays in disputes reaching the hearing stage there are the added complications of the COVID-19 pandemic, specifically court closures enforced by the UK-wide lockdown.  The effects of the additional backlog of cases, as well as any changes to the future operation of the Court estate is not yet quantifiable, though it is self-evident that there will be further delays to come.

In these uncertain times mediation may offer a more attractive option to clients who require a faster resolution to their dispute.  Online/Remote dispute resolution is tried and tested and ensures parties, the mediator and their lawyers can all conduct a mediation with little fuss, the same level of confidentiality and without the added expense of venue hire, and travel costs.    

A word of caution

The recent case of DSN v Blackpool Football Club Ltd [2020] EWHC 670 (QB) highlights the very real risks run by a party who unreasonably refuses to mediate.  Griffiths J, in his judgment dated 20 March 2020 ordered costs on an indemnity basis for the defendant’s unreasonable refusal to mediate.  The claim was agreed in favour of the claimant in the sum of £19,746.37 with an interim payment of £200,000 ordered on account of costs to be assessed.  The days of refusing to mediate on the basis of believing in a strong defence seem numbered and the courts appear far more willing to penalise a party in costs for failure to attempt settlement.

Conclusion

Whilst it is arguable that mediation may be on the cusp of being mandated by the courts, we are not there yet.  However, it is clear from DSN v Blackpool Football Club that there are likely to be greater costs implications for those who ‘carry on regardless’.  What is apparent, whatever the future jurisprudence in this area, is that there are a number of benefits to parties, and their lawyers, in settling disputes out of court. Mediation has a high success rate and, even in the minority of cases which do not reach settlement, there is often a significant narrowing of the issues – thus saving time and money later in the dispute process.

John-Paul is a barrister and accredited civil commercial mediator registered with the Civil Mediation Council. He is the principal mediator at DF Mediation, contact him here.