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MEDIATION NEWS: Churchill unties the ‘knotty’ problem posed by Halsey

29.11.23

On 29 November 2023 the Court of Appeal gave judgment in the case of Churchill -v- Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 which seeks to resolve the difficult issues raised by the earlier Court of Appeal decision in Halsey -v- Milton Keynes General NHS Trust [2004] EWCS Civ 576 [2004] 1 WLR 3002 and specifically the controversial and much criticised comments of Dyson LJ in paragraphs 9 and 10 of his judgment in 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”…

“If the court were to compel parties to enter into a mediation to which they objected, that would achieve nothing except to add to the costs to be borne by the parties, possibly postpone the time when the court determines the dispute and damage the perceived effectiveness of the ADR process.”…

“But if the parties (or at least one of them) remain intransigently opposed to ADR, then it would be wrong for the court to compel them to embrace it.”

In summary, the Court of Appeal in Churchill has held that:

1. The comments of Dyson LJ in paragraphs 9-10 of his judgment in Halsey were not a necessary part of the reasoning that led to the decision in that case and so do not bind other courts – for those that enjoy legal Latin, the comments were not part of the ratio decidendi and were obiter dicta.
2. As a matter of law, the courts can lawfully stay existing proceedings for (or order) the parties to engage in a non-court-based dispute resolution process, such as mediation or as in Churchill, a local authority’s complaints procedure. It can do so without infringing the claimant’s Article 6 ECHR rights, provided that the order made: (a) does not impair the very essence of the claimant’s right to a fair trial, (b) is made in pursuit of a legitimate aim, and (c) is proportionate to achieving that legitimate aim.
3. It would not be right or desirable to lay down fixed principles or specific guidelines as to the criteria for deciding whether or not to exercise the power to grant a stay. There is no need for a checklist or score sheet as judges are well qualified to decide whether a particular process is or is not likely or appropriate for the purpose of achieving the important objective of bringing about a fair, speedy and cost-effective solution to the dispute and the proceedings, in accordance with the overriding objective.

The facts in Churchill were that Mr Churchill bought a property in Merthyr Tydfil in 2015. The Council owns land adjoining land the property. Mr Churchill claims that, since 2016, Japanese knotweed has encroached from the land onto the property causing damage to it, a reduction in its value and loss of enjoyment. Mr Churchill’s solicitors sent the Council a letter of claim in 2020, to which the Council responded querying why Mr Churchill 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 to the court for a stay and for costs. Despite that warning, Mr Churchill issued proceedings in nuisance against the Council in July 2021. On 15 February 2022, the Council duly issued the stay application, as it had threatened.  Deputy District Judge Kempton Rees (the judge) dismissed the stay application on 12 May 2022, having delivered a reserved judgment. He held that he was bound to follow Dyson LJ’s comments in paragraphs 9 and 10 of his judgment in Halsey. The Council appealed. The appeal was allowed in part as set out above. However, the Court of Appeal did not grant a stay for a number of reasons, but mostly because the situation has moved on considerably – particularly in the light of the fact that one of the key purposes of the Council’s complaints procedure was to avoid litigation! The parties were also invited by the Court of Appeal to consider agreeing a temporary stay to allow for mediation or some other non-court-based form of adjudication.

The importance of the case in general and especially to the ADR community can be seen from the fact that the Court of Appeal included both Lady Carr (LCJ) and Sir Geoffrey Voss (MR)  and no fewer than seven interveners were given permission to join in the appeal, namely, The Law Society, The Bar Council, The Civil Mediation Council, The Centre For Effective Dispute Resolution, The Chartered Institute Of Arbitrators, Housing Law Practitioners’ Association and The Social Housing Law Association.

The case can be seen as part of a general trend towards ADR processes such as mediation effectively becoming a compulsory first step before litigation is commenced. The courts have been positively encouraging the use of such processes for many years, but the clear direction of movement from the Ministry of Justice is towards making it compulsory and embedding it within the whole process of dispute resolution.