Court of Appeal finds that parties can be ordered to engage in ADR and mediation

In the Court of Appeal case of Halsey v Milton Keynes (2004), Lord Justice Dyson said that "to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to court". However, the Court of Appeal has now overturned that part of the decision.

In recent years, there has been growing doubt that parties could not be ordered to engage in mediation (or other forms of alternative dispute resolution (ADR)).

Giving the leading judgment in Churchill v Merthyr Tydfil County Borough Council, the Master of the Rolls, Sir Geoffery Vos, said that that part of the judgment in Halsey was not binding on High Court judges (or below).

Judges can therefore stay proceedings for or order parties to engage in a non-court-based dispute resolution process. While factors such as access to lawyers, payment of costs and the status of the decision-maker (as well as the particular dispute resolution process being considered) may influence the exercise of a judge's discretion, these didn't alter the fact that the power to make an order exists.

What about when the parties are both unwilling to try ADR? The Court of Appeal noted that "even with initially unwilling parties, mediation can often be successful". The Court of Appeal also emphasised that parties should be ordered to take part in ADR and mediation only if this would not impair their rights to proceed to trial and is proportionate to achieving a settlement fairly, quickly and at a reasonable cost.

This decision does not mean that ADR and mediation will be ordered in every case, but nor will an order not be made just because one or both parties are unwilling to give ADR a go. As the case makes clear, the hope is that getting the parties to discuss settlement (especially if a skilled mediator is involved too) will nevertheless encourage settlement (hopefully, freeing up valuable court time and resources). But the position remains that the parties can never be forced to settle (although they might, exceptionally, face a costs sanction if they act unreasonably at the mediation) – and so their right to have their dispute settled by litigation or arbitration (whichever they have chosen) remains.