The 1stOctober 2024 (Amendment No.3) (SI 2024 No.839) to the Civil Procedure Rules (CPR) mark a pivotal shift in the UK’s dispute resolution framework, reinforcing the role of Alternative Dispute Resolution (ADR), particularly mediation, as a fundamental aspect of civil justice. These changes reflect the judiciary’s growing commitment to promoting cost-effective, efficient, and accessible dispute resolution mechanisms. By granting courts greater powers to mandate mediation and imposing cost sanctions for non-compliance, the amendments aim to alleviate court congestion, reduce litigation expenses, and encourage early settlements. This article explores the key procedural reforms, judicial interpretations shaping ADR’s evolving role, and the practical advantages and challenges of mandatory mediation under the new rules.
The recent amendments to CPR 1.1, 1.4(2), 3.1(2), Part 28 & 29, and Part 44 have introduced significant procedural reforms to embed ADR into the litigation framework:
In James Churchill v Merthyr Tydfil County Borough Council [2023] EWHC 2334 (QB), the Court of Appeal considered whether a court could lawfully order parties to engage in a non-court-based dispute resolution process and under what circumstances it should do so. The case arose after Mr. Churchill sued the Council, claiming Japanese knotweed had encroached from its land onto his property, causing damage and loss of value. The Council argued that he should have first used its Corporate Complaints Procedure and applied for a stay of proceedings.
At first instance, Deputy District Judge Kempton Rees, relying on Halsey v Milton Keynes General NHS Trust [2004], refused to grant the stay, holding that compelling unwilling parties to mediation would obstruct their right of access to the courts. However, the Court of Appeal (led by the Master of the Rolls) ruled that the judge had misinterpreted Halsey—the relevant passages were not binding. The Court held that courts can lawfully order or stay proceedings for ADR, provided this does not undermine a claimant’s fundamental right to a judicial hearing and is proportionate to achieving a fair, cost-effective resolution. However, no fixed principles were established for determining when such orders should be made.
In this case, the Court of Appeal declined to grant a stay but urged the parties to consider mediation or another alternative resolution process. The ruling clarifies that courts have discretion to require ADR participation in appropriate cases, signalling a shift towards stronger judicial support for non-court-based dispute resolution.
In Northamber PLC v Genee World Ltd & Ors [2024] EWCA Civ 428, the Court of Appeal reaffirmed that failing to respond to a mediation proposal is inherently unreasonable, even without an explicit refusal. This decision builds on Halsey v Milton Keynes (2004) and PGF v OMFS (2013), reinforcing that courts may impose cost penalties on parties who disregard mediation. The case involved a commercial litigation dispute over a breach of exclusivity agreements. The claimant proposed mediation, highlighting significant legal costs (£450,000 compared to a £300,000 budget), but the defendants failed to provide a substantive response or justify their refusal, despite a court order requiring an explanation. The trial court found the claimant’s mediation offer half-hearted and declined to impose cost penalties. However, the Court of Appeal held that silence in response to a mediation offer is unreasonable and constitutes a failure to engage with alternative dispute resolution (ADR). It also ruled that ignoring a court order requiring an explanation for rejecting mediation undermines the effectiveness of such directives. The court found that the trial judge was wrong to suggest the claimant should have followed up on the mediation request—once an offer is made, the burden shifts to the recipient. While cost penalties should not be automatic, they should be assessed considering all relevant factors. As a result, the defendants were penalised with a 5% increase in the claimant’s cost recovery (raising it from 70% to 75%). The judgment serves as a clear warning that disregarding mediation invitations can lead to financial consequences. Litigants should never ignore an offer to mediate. Even if mediation is deemed unsuitable, a timely response explaining the reasoning is essential to avoid potential cost sanctions.
Since PGF, courts have consistently stressed the expectation that the parties will engage in mediation, rejecting common excuses for refusal – such as confidence in a strong defence or belief that mediation will be futile. Subsequent cases have reinforced this stance. In Northrop Grumman v BAE Systems [2014], a defendant was penalised for refusing mediation despite believing in the strength of its case. Similarly, in Laporte v Commissioner for the Police of the Metropolis [2015], a successful defendant still faced criticism for failing to mediate.
Courts assess unreasonable refusals to mediate under Part 44 of the Civil Procedure Rules, with cost penalties potentially imposed even on victorious litigants. These rulings make it clear that mediation should be proactively considered, as refusal can have financial consequences regardless of the case’s outcome.
The Court of Appeal in Halsey v Milton Keynes General NHS Trust & Steel v Joy & Halliday [2004] EWCA Civ 576 clarified that while courts should encourage mediation, they should not compel parties to participate, as doing so could violate Article 6 of the European Convention on Human Rights (the right to a fair trial). However, courts can require parties to take steps toward ADR, stopping short of mandating mediation.
The judgment outlined key factors courts consider when awarding costs where mediation has been refused:
The ruling reassured those opposed to compulsory mediation while reinforcing that courts will penalise parties who refuse ADR without a valid reason. Strong judicial encouragement for mediation increases the likelihood that an unreasonable refusal will attract cost penalties.
The case of DKH Retail Ltd & Ors v City Football Group Ltd [2024] EWHC 3231 (Ch) highlights the court’s evolving stance on compulsory mediation, particularly following the amendments to the Civil Procedure Rules (CPR) effective from 1 October 2024.
At a Pre-Trial Review, the claimants sought an order for mediation in a trademark dispute under the Shorter Trials Scheme. Mr Justice Miles granted the order, emphasizing the judiciary’s increasing focus on alternative dispute resolution (ADR) to reduce litigation costs and conserve court resources. He noted that mediation has proven effective in even the most entrenched disputes and that parties often reach settlements despite initially opposing positions.
Key observations from the judgment include the recognition of a shift in the courts’ approach to ADR, the need for efficient resource allocation, and the potential for mediation to resolve disputes even when prior settlement efforts have failed. The judge also stressed that mediation could remove obstacles to settlement and need not disrupt trial preparations.
Ultimately, the mediation order led to the case settling, reinforcing the courts’ growing preference for ADR as a means of dispute resolution post-October 2024.
The 2023 Tenth CEDR Mediation Audit reported Mediation continues to be a highly effective method of dispute resolution, with an overall settlement rate of 92%, demonstrating consistency with the findings from 2020. This suggests that mediation remains a reliable mechanism for resolving conflicts efficiently and amicably.
However, among the Advanced mediator group, the settlement rate has declined from 92% in 2020 to 85% 2023. This decrease may indicate a shift in the complexity of cases handled by more experienced mediators, changes in negotiation dynamics, or evolving attitudes of disputing parties. While still a strong success rate, the decline warrants further analysis to understand potential contributing factors.
To ensure the accuracy of these figures, the reported settlement rates from mediators were cross validated with findings from a separate survey of lawyers. This validation strengthens the credibility of the results and provides a more comprehensive perspective on the effectiveness of mediation as viewed by both practitioners and legal professionals.
The October 2024 amendments to the Civil Procedure Rules (CPR) represent a landmark shift in the UK’s civil justice system, reinforcing mediation as a cornerstone of dispute resolution. By granting courts the authority to mandate mediation and imposing cost sanctions for non-compliance, these changes seek to enhance access to justice, reduce litigation costs, and alleviate court backlogs. The judicial decisions in Churchill, Northamber, and other key cases signal an increasing expectation for parties to engage meaningfully with ADR, reinforcing a broader cultural shift toward collaborative dispute resolution.
While the reforms present significant advantages—including cost savings, time efficiency, and improved judicial resource allocation—challenges remain. The potential erosion of voluntariness in mediation, disparities in access to skilled mediators, and enforcement difficulties may pose hurdles in certain cases. However, the overwhelmingly positive settlement rates reported by the CEDR Mediation Audit indicate that mediation remains a highly effective tool for resolving disputes outside the courtroom.
Ultimately, the success of these reforms will depend on their practical implementation and the judiciary’s approach to balancing mandatory mediation with the fundamental right to a fair trial. As courts, litigants, and practitioners adapt to this evolving framework, the legal landscape will continue to shift towards a more pragmatic, cost-conscious, and efficient system of civil dispute resolution.
https://www.justice.gov.uk/courts/procedure-rules/civil
https://www.judiciary.uk/judgments/james-churchill-v-merthyr-tydfil-county-borough-council/
https://www.bailii.org/ew/cases/EWCA/Civ/2024/428.html