Recent case law has highlighted the importance of trying to settle claims outside of Court before issuing Court proceedings. This point is becoming ever clearer with new powers and precedents being set by the Court.
If you are unfamiliar with the litigation process, you might be mistaken in believing that the first thing that lawyers would do, when a dispute arises, is go straight to the Court and issue proceedings. However, gone are the days where such tactics are used to resolve disputes. The litigation process has evolved to a point where court proceedings are now seen as a last resort. Lawyers will usually advise their clients to go to great and painful lengths to try and resolve the matter outside of Court using Alternative Dispute Resolution (ADR). One of the main ways that disputes are resolved through ADR is through the use of a process called mediation.
What is mediation?
Mediation is a process where all the parties involved in the dispute sit around a table (virtually or physically) and spend a substantial period of time trying to come to some sort of compromise/agreement. This process is overseen by an independent third party known as a mediator. The mediator is usually a skilled advocate and is almost always a negotiation expert whose job is to play the middleman and referee to steer the parties toward an agreement. This is usually a long and hard process where all parties make concessions and end up with an agreement that neither party is fully happy with, however, while this may be the case, mediation has a very high success rate in resolving cases.
This method saves clients both time, stress, and costs of having to go through the Court process to resolve their dispute. In a case that can cost a party hundreds of thousands of pounds if it reaches a final hearing, mediation could resolve in a fraction of the cost. It is therefore no surprise that the Court looks favourably on this method and have been taking steps to not only encourage, but force parties to undertake this process to provide relief to an undermanned and overburdened Court system.
Before 2023 all parties were advised by the Court to look at ADR before issuing Court proceedings. To enforce this, the Court brought into play the ‘pre-action protocols’ which have the purpose of promoting early dialog between the parties in the hope that matters can be resolved before it reaches the Court. However, at this point, mediation was always an optional process that parties could refuse to undertake. While refusing may have drawn the anger of the Court which could have resulted in cost sanctions against the offending party, the parties nevertheless had the option to bypass mediation in favour of ‘having their day at Court’.
Churchill v Merthyr Tydfil County Borough Council
This was until the case of Churchill v Merthyr Tydfil County Borough Council [2023] where the Courts took an even tighter stance on ADR and mediation.
From this case, the Court set out that it had the power to pause proceedings and order parties to attend mediation. This could be done even where the parties had made it clear to the Court that they do not wish to participate in the mediation process. This decision has been met with both praise and criticism and everybody has since been watching the Court to see how rigorously they intend to exercise their newfound power.
The SuperDry Case
This issue has now been addressed in the recent case of DKH Retail and others v City Football Group Ltd [2024] EWHC 3231 (Ch), known sometimes as the SuperDry case.
In this case, one of the parties made it clear to the Court that it did not wish to enter into mediation with the other parties, they believed that it would be a waste of everybody’s time and that they strongly believed that no agreement could be reached with their opponent. While these views were set out to the Judge overseeing the case, the Judge still ordered that the claim be stayed (paused) and that the parties must attend mediation.
The Judge, in his reasoning, set out that mediation has the power to ‘[crack] even the hardest nuts’. The Judge believed that if you brought the parties together, they would nearly always be able to overcome their reluctance to negotiate, no matter how far off they may be in their respective positions. While at first glance this may have looked like a waste of time in this case, the parties mediated and managed to resolve their dispute through mediation, bringing proceedings to an end. With these new powers gained and a precedent set, it looks likely that the Court will continue to take a direct approach to mediation and require the parties to mediate in most cases, even if the parties do not wish to take part in that process.
How can Tozers Help
Recent case law has highlighted the importance of attempting to resolve disputes outside of the Court before issuing proceedings. We at Tozers have regular experience in dealing with Alternative Despite Resolution and have a team of highly skilled negotiators who will advocate on your behalf to obtain the best resolution possible, as early as possible.
We are a top firm for client satisfaction and through our experience of dealing with these cases regularly, we understand that no one case is the same. We therefore have built a strong reputation in problem-solving skills and adapting to the circumstances of the case.
