Compulsory ADR: Changes to court rules from 1 October 2024

Amendments to the Civil Procedure Rules will come into force tomorrow (1 October), confirming the English civil courts' power to order parties to engage in alternative dispute resolution (ADR).

The changes are intended to give effect to the landmark decision last year in Churchill v Merthyr Tydfil Borough Council [2023] EWCA Civ 1416.  As we previously reported (here and here), that decision overturned what had for nearly 20 years been widely accepted as a general prohibition on the English courts compelling ADR, based on Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576.   

In Churchill, the Court of Appeal held that the courts do have the power to order parties to engage in mediation or some other non-court dispute resolution process, and to stay proceedings to allow that to happen, in circumstances where such an order would not impair the very essence of the parties' fundamental right to a judicial hearing, and would be proportionate to achieving the aim of settling the dispute fairly, quickly and at reasonable cost. 

The rule changes follow a consultation earlier this year by the Civil Procedure Rule Committee, based on the work of a multijurisdictional working group chaired by Lady Justice Asplin (Court of Appeal). The finalised amendments largely follow the proposals in the consultation, amending:

• CPR 1.1 - to add that the overriding objective of dealing with cases justly and at proportionate cost includes, so far as practicable, "promoting or using [ADR]"
• CPR 1.4(2) and 3.1(2) - to confirm that the courts' general case management duties and powers include not just encouraging but ordering parties to engage in / use ADR where appropriate
• Parts 28 (fast/intermediate tracks) and 29 (multitrack) – to confirm that the matters the court should consider when making case management directions include "whether to order or encourage the parties to engage in [ADR]"
• Part 44 - to add that, when the court is exercising its general costs discretion, its consideration of the parties' conduct may include "..whether a party failed to comply with an order for [ADR], or unreasonably failed to engage in [ADR] ".

The changes in themselves are uncontroversial, given that they are limited to acknowledging the court's power to order ADR. They do not address the much more nuanced issue of when and how that power should be exercised. That is consistent with the Churchill judgment itself, where the Court of Appeal deliberately declined to lay down fixed principles as to when such an order should be made. The court noted several factors that may be relevant but acknowledged that there may be many others and that "it would be undesirable to provide a checklist or a score sheet for judges to operate."

That approach is welcome, given the very broad range of disputes encompassed within the civil justice system. The factors that influence whether and when ADR will be appropriate (under compulsion or otherwise) differ markedly between different types of claims.

With regard to complex commercial litigation, our earlier posts here and here discuss some of the key relevant factors. In particular, the parties will generally be both sophisticated and well-advised and will almost invariably decide of their own initiative to undertake mediation, or another form of ADR, at an appropriate stage. However, the important question of timing will be influenced by numerous case-specific factors, and the parties and their representatives are often best placed to assess this - albeit possibly with some judicial prompting to encourage them to undertake that assessment as early as possible and revisit it regularly.

As discussed here, it seems unlikely that judges in complex commercial cases will consider it appropriate to use the newly-recognised power of compulsion on a regular basis, instead reserving it for only the most intransigent parties and only as a last resort.