Law Society welcomes Court of Appeal ruling on whether courts can order non-court based dispute resolution

The Law Society has welcomed the Court of Appeal’s judgment on whether courts can require parties to engage in non-court based dispute resolution before proceeding with a civil claim.

The Court of Appeal handed down its ruling in the Japanese knotweed case of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 yesterday (29 November).

For analysis of the ruling, see: A knotty problem: Churchill v Merthyr Tydfil Council - Elizabeth England assesses the impact of the Court of Appeal's judgment in a case where the council had sought a stay of proceedings in order that the matter might progress through its internal complaints procedure.

The Court of Appeal’s press summary of the ruling reads as follows:

The central questions in this case were whether a court could lawfully order the parties to court proceedings to engage in a non-court-based dispute resolution process, and, if so, in what circumstances it should do so.

Deputy District Juge Kempton Rees (the judge) held that he was bound to follow Dyson LJ’s statement in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002 (Halsey) to the effect 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 the court”. Accordingly, the judge refused to grant a stay of the proceedings to allow Mr Churchill to pursue an internal complaints procedure operated by the Merthyr Tydfil County Borough Council (the Council).

The Court of Appeal (Baroness Carr, Lady Chief Justice, Sir Geoffrey Vos, Master of the Rolls, and Lord Justice Birss) allowed the appeal in part.

The Court of Appeal (in a judgment delivered by the Master of the Rolls) decided that:

1. The passages from Dyson LJ’s judgment in Halsey, relied upon by the judge, were not part of the essential reasoning in that case and had not bound the judge to dismiss the Council’s application for a stay of these proceedings.
2. The court could lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made did not impair the very essence of the claimant’s right to proceed to a judicial hearing, and was proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
3. The court would not lay down fixed principles as to what would be relevant to determining whether proceedings should be stayed or whether to order the parties to engage in a non-court-based dispute resolution process.
4. In the circumstances of this case, a stay of the proceedings would not now be granted, but the parties ought to consider whether they could agree to a temporary stay for mediation or some other form of non-court-based adjudication.

In this case, Mr Churchill bought a house (the property) in 2015. The Council owned land (the land) adjoining the garden of the property. Mr Churchill claimed that, since 2016, Japanese knotweed had encroached from the land causing damage and a loss of value and enjoyment. When Mr Churchill complained in 2020, the Council queried why he had not made use of its Corporate Complaints Procedure. It said that, if Mr Churchill were to issue proceedings without having done so, the Council would apply for a stay. Despite that warning, Mr Churchill issued proceedings, and the Council duly applied for a stay as it had threatened. In dismissing the Council’s application, the judge held that Mr Churchill and his lawyers had acted unreasonably by failing to engage with the Council’s complaints procedure. HH Judge Harrison referred the matter to the Court of Appeal

Responding to the ruling, Law Society of England and Wales president Nick Emmerson said: “The Law Society welcomes this important judgment, which has made clear the parameters governing when parties can be required to enter into a non-court based dispute resolution process before proceeding with a civil claim.

“The Law Society strongly believes that non-court based dispute resolution will usually be in the best interests of the parties, but has always had real reservations about a blanket rule making any form of such process mandatory.”

Emmerson added: “This judgment reflects those reservations in that it recognises that, in some circumstances, it may be contrary to a party’s right of access to the courts to compel them to engage in a non-court based dispute resolution process.

“We welcome the Court’s clear guidance as to when and how judges should intervene to encourage non-court based resolution of disputes.”