To stay proceedings or to order mediation

Can a civil court – that is, any non-criminal court – order parties to attempt non-court dispute resolution (“NCDR” or “mediation”); or can a judge only delay (ie “stay”) proceedings for parties to attempt mediation? These questions have arisen in two different sets of proceedings: the first in the Court of Appeal, the second later proceedings in matrimonial financial remedy proceedings. Despite the hierarchy of English and Welsh courts – where the High Court must follow the Court of Appeal – different outcomes have been directed in each case

In Churchill v Merthyr Tydfil County BC [2023] EWCA Civ 1416; [2023] WLR(D) 498 (29 November 2023) the Court of Appeal considered whether a court has power to stay proceedings to enable parties to attend mediation; or whether it can go further and order them actually to attend for mediation. In that case Sir Geoffrey Vos MR (with whom the Lady Carr LCJ and Birss LJ agreed) held that a court does have such a power. He reviewed earlier law including that of the European Court of Human Rights, and considered the earlier Court of Appeal decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576; [2004] 1 WLR 3002, before concluding:

“[50] Can, despite what Dyson LJ said in Halsey, the court lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process? In my judgment, that power does indeed exist.”

What Dyson LJ had said In Halsey was obiter (not part of the reasoning of the earlier decision), and therefore not binding on later courts, said Sir Geoffrey. He continued by concluding that:

“[58] … as a matter of law, the court can lawfully stay existing proceedings for, or order, the parties to engage in a non-court-based dispute resolution process” (emphasis added).

And of European Convention on Human Rights 1950, Art 6? Was this relevant to his decision? He said:

“[50] … It is not disputed that, if the power exists, it must be exercised so that it does not impair the very essence of the claimant’s article 6 rights, in pursuit of a legitimate aim, and in such a way that it is proportionate to achieving that legitimate aim…”

Stay or order in the context of the court rules?

Sir Geoffrey was speaking in the context of a case regulated by Civil Procedure Rules 1998 (CPR 1998). That a court in civil proceedings generally has power to stay proceedings has long existed; and this is so, whether it be in the inherent jurisdiction of the courts or under a similar power set out in the rules. Churchill v Merthyr Tydfil goes further. The Court of Appeal has now reversed Halsey as the quotes from paragraphs [50] and [58] (above) confirm, and has held that parties can be compelled by court order to attempt mediation.

Where does this leave parties to family proceedings which proceedings, as is well-known, are not covered by CPR 1998 (CPR 1998 r 2.1(2))? Proceedings covered by CPR 1998 have one set of rules. Family proceedings have a different set of rules, namely Family Procedure Rules 2010 (FPR 2010). Some of those rules (eg FPR 2010 Part 3, which deals specifically with mediation) will help over NCDR; but other aspects of FPR 2010 (eg a lack of pre-action protocols (PAPs)) undermines the prominence given by Part 3 to mediation. The common law is the same for proceedings under CPR 1998 and FPR 2010. But as will be seen, Knowles J (see X v Y (below)) that Churchill v Merthyr Tydfil, as to an order to engage in mediation, does not apply – says Knowles J – directly to family proceedings.

Pre-action protocols and civil courts proceedings

Churchill v Merthyr Tydfil turned on the failure of Mr Churchill (C) and his lawyers to take advantage of – or at least to try – the mediation scheme available and as part of a pre-action protocol (PAP). Such PAP was applicable in cases such as C’s (where he was claiming damages from a local council for a Japanese knotweed problem derived from their land). Could NCDR help to settle C’s claim? Sir Geoffrey explained fully the 1990s genesis of PAPs and their importance in civil litigation and considered that C should at least have attempted NCDR.

What are pre-action protocols and how do they link with any prospect of mediation? PAPs were introduced alongside CPR 1998. They are provided for in a practice direction immediately following CPR 1998 at Section C (referred to widely in Churchill). Section C contains factors for parties to bear in mind before or alongside issue of civil proceedings. A generic protocol section is followed by a list of nearly 20 PAPs (eg personal injury; professional negligence; judicial review; possession claims for mortgage arrears etc) each of which set out draft documents as to how a claim and a response should proceed. Under the heading “Settlement and ADR” the current Section C includes:

“8 Litigation should be a last resort. As part of a relevant pre-action protocol or this Practice Direction, the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.

9 Parties should continue to consider the possibility of reaching a settlement at all times, including after proceedings have been started. Part 36 offers [ie without prejudice rule offers not to be seen by the court] may be made before proceedings are issued.”

In Access to Justice: Final Report (1996) Lord Woolf explains his views on protocols in Chapter 10 headed “Pre-action Protocols”. He points out (para 4) that what is needed “is a system which enables the parties to engage in meaningful negotiation as soon as litigation seems likely and ensures then that they exchange relevant information”. He goes on to stress the need for “codes of sensible practice” where litigation is in prospect (para 6).

In Jet2Holidays Ltd v Hughes [2019] EWCA Civ 1858, [2020] 1 WLR 844, (8 November 2019) PAPs were described as “now an integral and highly important part of litigation architecture” (at [36]). Only one protocol – and that of limited efficacy (if it is used at all) – is available in FPR 2010 (see the Annex to FPR 2010 Part 9); though it is not clear why only this limited provision of PAPs is available to parties to family proceedings. Pre-action protocols or no, the family courts have the power to order a stay or to direct that parties attend for mediation, if the Court of Appeal decision in Churchill v Merthyr Tydfil is followed and judges exercise their discretion so to order.

An order for mediation in the family courts

Three months after Churchill, in X v Y (also known as Re X (Financial Remedy: Non-Court Dispute Resolution)) [2024] EWHC 538 (Fam); [2024] 4 WLR 28(8 March 2024), Knowles J reviewed Churchill v Merthyr Tydfil County BC [2023] EWCA Civ 1416, [2023] WLR(D) 498 (29 November 2023) in the context of family proceedings.

X v Y concerned parallel proceedings in the family courts: a financial remedy application and concerning the parties’ child. The financial proceedings, set down for hearing in June 2024, had already cost nearly £600,000 and if they went to trial were expected to cost another £500,000. £300,000 was said to be a conservative estimate for the child proceedings. Knowles J stresses the importance of mediation in family disputes and refers to the fact that case management powers in FPR 2010 Part 4 almost exactly “mirror” the powers in CPR 1998 Part 3. Both enable the court to stay a case. In Churchill v Merthyr Tydfil that is what the court was considering: CPR 1998 r 3.1(2)(f) is mirrored by FPR 2010 r 4.1(3)(g).

Knowles J considered the passage in Churchill at [59], which states that mediation can often be “cheaper and quicker … than court-based solutions”. She explained her understanding of the law by reference only to FPR 2010 and proposed changes to those rules; but she does not specifically consider the essential passage – its ratio decidendi or principle of the case – from the judgment of the Master of the Rolls at [58] (cited above). That is the assertion which leaps out from Churchill v Merthyr Tydfil: that “as a matter of law” the court has power to stay proceedings and, in addition, to order parties to attend for mediation. A power to order attendance at NCDR is a matter of common law governing civil and family proceedings.

Application for mediation: a stay or order

Pre-action protocols or no, the family courts have the power to order a stay or to direct that parties attend for mediation. (A judge may need to bear in mind Sir Alan Ward’s comments in Wright v Michael Wright Supplies [2013] EWCA Civ 234 (at [3]): “You may be able to drag the horse (a mule offers a better metaphor) to water, but you cannot force the wretched animal to drink if it stubbornly resists.”) Once there is a stay order the only further steps a party may take, says the glossary to both sets of rules, is where this is permitted by rules or ordered by the court. Proceedings can be continued only if a stay is lifted.

CPR 1998 r 3.1(2)(f) says that a “court may: (g) stay the whole or part of any proceedings… either generally or until a specified date or event”. FPR 2010 r 4.1(3)(g), says exactly the same thing; or as Knowles J states in X v Y, the active case management powers of the courts in CPR 1998 “mirror” those in FPR 2010. Application for a stay or for referral to mediation, can be by either (or any) party to proceedings by the CPR 1998 Part 23 (civil proceedings) or FPR 2010 Part 18 (family proceedings) procedures. An application will have to show why a stay may be helpful. In particular, in any case which is governed by a timetable, the applicant will need to ensure that the court orders that the stopwatch be paused and any forthcoming hearing adjourned, and any mediator will have to know of the adjourned date.

Echoing some of the reforms to court process anticipated by Churchill v Merthyr Tydfil and X v Y, HM Courts and Tribunals Services have drawn attention to the fact that mediation will soon be part of the county court small claims process. Preparing for the requirement to mediate in small claims: What you need to know (Inside HMCTS blog) states that “Mediation is soon to be an integral part of the small claims process [ie claims for under £10,000], meaning parties will need to attend an appointment to try and resolve their case ahead of having a court hearing.” Once claims are filed, from 24 May 2024 parties will be required to take part in mediation.

Mediation: where next in court process?

The small claims mediation paper asserts that “the new policy [on non-court mediation] is part of the government’s plan to increase the use of dispute resolution across the county courts, family courts and tribunals, to resolve claims quicker and more consensually”. The claim in X v Y will have been much greater than £10,000; and maybe the claim in Churchill v Merthyr Tydfil also. But the principle asserted by this new county court scheme is surely one which can be developed.

As for X v Y and mediation in family proceedings, Knowles J was entitled to follow the decision of the Court of Appeal in Churchill v Merthyr Tydfil and to order parties to attend for mediation. The decision of the Court of Appeal may only have been expressed in diffident terms (as to the power to order attendance at NCDR) its ratio (the principle of the decision) was clear; but the Court of Appeal case was cited to Knowles J. She opted to make a case management decision which did not compel a referral. Even though mediation might not achieve a settlement of the parties’ case, it could still help them to narrow issues between them.

Let the last word go to Knowles J:

“[16] [NCDR] is particularly apposite for the resolution of family disputes, whether involving children or finances. Litigation is so often corrosive of trust and scars those who may need to collaborate and co-operate in future to parent children. Furthermore, family resources should not be expended to the betterment of lawyers, however able they are, when, with a proper appreciation of its benefits, the parties’ disputes can and should be resolved via non-court dispute resolution….”

And Knowles J herself concluded this part of her case management direction, perhaps echoing the spirit of Churchill v Merthyr Tydfil and the small claims mediation scheme:

“[16] … Parties to financial remedy and private law children proceedings can expect – at each stage of the proceedings – the court to keep under active review whether non-court dispute resolution is suitable in order to resolve the proceedings. Where this can be done safely, the court is very likely to think this process appropriate especially where the parties and their legal representatives have not engaged meaningfully in any form of non-court dispute resolution before issuing proceedings.”

If indeed a successful NDCR scheme depends on a scheme of pre-action protocols in family proceedings it is to be hoped that the family proceedings rule makers (Family Procedure Rules Committee) can give early attention to the areas where they might apply so that they can be linked to court direction and orders for mediation.