EWJ 60 April 2025 web - Journal - Page 30
Taking the A out of ADR? Recent
Decisions and Judicial Commentary
Signals Increased Support from the
English Court for Mediation
by Dan Smith, Partner and Kyrsten Baker, Associate - Stephenson Harwood
which the Court of Appeal determined that the Court
had the power to stay proceedings for, and order, parties to engage in ADR, provided that (a) the order did
not impair the claimant's rights to proceed to a judicial
hearing, and (b) was proportionate to achieving the
legitimate aim of setting the dispute fairly, quickly, and
at reasonable cost.
Summary
In a recent decision in DKH Retail Ltd & Ors v City
Football Group Ltd1 (DKH Retail), the English court has
demonstrated its increased willingness to compel
parties to engage in mediation aimed at settling their
commercial disputes. We have seen the groundwork
for this in amendments to the Civil Procedure Rules
(CPR), and in an earlier appellate decision in litigation involving an individual's dispute with his local
authority regarding Japanese knotweed2. DKH Retail
signals that it applies just as much in commercial
disputes.
The Overriding Objective: The most wide-ranging
amendment to the CPR was to the scope of CPR 1.1,
which sets out the overriding objective of "enabling
the court to deal with cases justly and at proportionate cost". CPR 1.1(2) has been broadened to incorporate "(f) promoting or using alternative dispute resolution".
Additionally, CPR 1.4(2), which addresses the court's
duty of active case management, now includes "(e)
ordering or encouraging the parties to use, and facilitating the
use of, alternative dispute resolution".
The English court's support for alternative dispute
resolution (ADR) is becoming ever clearer, as is international support in the form of the Singapore Convention on Mediation (the Convention). There are
now significant risks to a party to any dispute – even
the most complex, acrimonious, and high value disputes – in refusing to engage in mediation or other
forms of negotiated dispute resolution (NDR), as a
refusal may lead to being compelled to do so, and
adverse costs orders.
Court's Management Powers: The second set of
amendments concerns the court's authority in relation
to the ordering of ADR:
CPR 3.1(2): This rule, which is part of the Court's case
management powers, now permits the court to "(o)
order the parties to engage in alternative dispute resolution".
This support is warranted: it is a rare dispute that will
not benefit from genuine attempts to settle, not least
on the basis that there is almost always a better outcome for each party than the costs and risks of a trial.
DKH Retail proved no different: the order to mediate
led to a successful settlement.
CPR 28.14: This rule, which contains general provisions governing the management of cases allocated to
the fast and intermediate tracks, now includes in matters to be dealt with by directions to include "(f) whether
to order or encourage the parties to engage in alternative
dispute resolution".
Mediation affords parties a significant degree of
autonomy over the process (as they can choose the
mediator and set the agenda and scheduling), and can
facilitate tailored, creative solutions that litigation cannot. Mediation can also help parties save time and
avoid the uncertainty and expense of trial and can bypass the potentially negative consequences of a public
judgment. It may also foster a more amicable resolution between the parties than the handing down of
judgment following an adversarial trial.
CPR 29.2(1A): This rule, which governs case
management in cases of greater value and complexity,
now specifically requires the court when giving directions to consider "whether to order or encourage the parties
to engage in alternative dispute resolution".
This article provides an overview of recent changes to
the CPR, the decision in DKH Retail, and an examination of a recent speech by Lady Carr exploring how
mediation might evolve in light of the Convention.
Costs Provisions: The third amendment was to CPR
44.2(5), which regulates the court's discretion to award
costs, specifically regarding the conduct of litigation
by the parties. This now includes "(e): Whether a party
failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute
resolution."
Recent amendments to the CPR
In 2024, the CPR was amended in three ways
following the Court of Appeal's 2023 decision in
Churchill v Merthyr Tydfil County Borough Council,3 in
DKH Retail
Background
DKH Retail concerned an alleged trademark
infringement by the Defendant arising from the use of
EXPERT WITNESS JOURNAL
28
APRIL 2025
