Never too late to mediate

This post, written by James Gibbons, originally appeared on the Three Stone Mediation website. 

 

In November 2023 in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 the Court of Appeal decided that the Court had power to order parties to engage in non-court based dispute resolution (ADR).

With effect from 1 October 2024, CPR 1.4, 3.1 & 29.(2) (1A) dealing with Case management and the Overriding Objective were accordingly amended to reflect that decision.

The decision a month or so later on 21 November 2024 of Mr Justice Miles in DKH Retail Ltd & Others v City Football Group Ltd [2024] EWHC 3231 (Ch) makes interesting reading.

The Claimants, in a trade mark dispute regarding the logo or lettering on the Manchester City FC kit, made an application at the Pre-Trial Review for an order for compulsory mediation. In support they argued that the dispute was capable of resolution, by way of several outcomes (which might not be available in a Court judgment) including the form and size of any logo or lettering on the relevant sports kit, payment of money, and the timing of any changes.

Although there had been unsuccessful settlement negotiations, the parties were about to incur further costs in preparation for and of the imminent trial, of hundreds of thousands of pounds.

A short, sharp one day mediation before the end of December might well allow the parties to avoid at least some of those costs and potentially save Court time and resources.

The Defendant objected on two substantive grounds. Firstly the Court should only order mediation where there was a realistic prospect of settlement. Mediation in this case would fail and a ruling was needed to determine both the position of both parties.

Secondly it was too late in the day. The parties had already expended hundreds of thousands of pounds, the trial was imminent, and the Defendant had very limited availability for mediation in December.

The Judge in acceding to the Claimants’ application observed inter alia that:-
“Experience shows that Mediation is capable of cracking the hardest of nuts…sometimes …in cases where the parties appear at first to have intractable differences…The purpose of Mediation is to remove roadblocks to settlement…The range of options available to parties to resolve the dispute through mediation goes beyond the binary answer a court could provide. There may be solutions other than yes or no.”

The Court accordingly ordered that the parties should mediate on a date in December and report its outcome to the Court as soon as possible after the mediation was complete.

A Postscript to the judgment states simply “On 13 January 2025 the parties notified the court that they had settled their dispute”

This decision is a clear signpost of the direction towards orders of this kind even at a late stage in litigation.

As Joshua Rozenberg reported in his Article last week, Lady Chief Justice Carr on 28 January called for closer working between those engaged in mediation, arbitration and litigation.
“In a lecture to the British Institute of International and Comparative Law, Baroness Carr of Walton-on-the-Hill suggested the creation of a mediation council to ensure that England and Wales can continue to operate as a leading international mediation centre.
That’s because mediation is becoming increasingly important as a way of resolving international commercial disputes. Until a few years ago, these claims were usually resolved by arbitrators because arbitration awards can be enforced in most countries of the world under the New York Convention, a treaty dating back to 1959.

But, said Carr… the growth of arbitration has led to the sort of problems that persistently trouble courts — hearings take too long and cost too much.
Litigation, arbitration and mediation were complementary rather than competitors, Carr argued. Without decisions from the courts, lawyers would not be able to advise clients when to settle.”

For all legal representatives, it is thus worth remembering at all stages of a dispute that:-
“The parties are required to help the court to further the overriding objective” CPR 1.3 and
CPR 1.4
”(1) The court must further the overriding objective by actively managing cases.
(2) Active case management includes –
(e) ordering or encouraging the parties to use, and facilitating the use of,
alternative dispute resolution;”

 

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