The Court of Appeal has held in the case of James Churchill v Merthyr Tydfil County Borough Council that courts have the power to stay proceedings for, or order, parties to engage in a "non-court-based dispute resolution process".
The matter concerned a nuisance claim brought by Mr Churchill against the Defendant, Merthyr Tydfil County Borough Council. Mr Churchill owned a property adjacent to land owned by the Council. Mr Churchill claimed Japanese knotweed had encroached from the Council's land onto his property, causing damage and a reduction to value and loss of enjoyment. The Council issued a stay application, on the basis that Mr Churchill had not used the Council's Corporate Complaints Procedure, which had been raised by the Council's solicitors in their initial response to the letter of claim back in January 2021.
In May 2022, Deputy District Judge Kempton Rees dismissed the stay application citing he was bound to follow Lord Justice Dyson's statement in Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002: "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". Permission to appeal was granted in August 2022 on the grounds that the case raised an important point of principle and practice.
The main issues considered in the appeal by Sir Geoffrey Vos, Master of the Rolls, were:
- Had DDJ Rees been right to think Halsey bound him to dismiss the Council's application?
- If not, can the court lawfully stay proceedings for, or order parties to engage in, a non-court-based alternative dispute resolution process (ADR)?
- If so, how should the court decide whether to stay the proceedings for, or order, the parties to engage in a non-court-based ADR?
- Should DDJ Rees have acceded to the stay application to allow Mr Churchill to pursue a complaint under the Council's Corporate Complaints Procedure?
Sir Geoffrey Vos found that paragraphs 9 and 10 of the Halsey judgment, which addressed whether the court could order parties to engage in ADR, were not an essential part of the reasoning that led to the decision of the case. As such, the comments were made in passing and not binding.
Having reviewed European and domestic legislation and cases, Sir Geoffrey Vos concluded the court can lawfully stay existing proceedings for, or order, the parties to engage in a non-court-based ADR, provided it is does not impair the claimant's ECHR Article 6 rights to a fair trial and is proportionate in achieving the legitimate aim of settling the dispute fairly, quickly and at a reasonable cost.
He declined to comment on fixed principles that would be relevant to determining whether to stay the proceedings for, or order the parties to engage in, a non-court-based ADR. He held it would be undesirable to provide a checklist or score sheet for judges to rely on as various factors which would be relevant in a particular case.
As to whether the application ought to have been stayed, Sir Geoffrey Vos' view was that if DDJ Rees had not concluded he was bound by Halsey, a stay would have been granted at the time in May 2022. However, since then, matters had moved on so there was little point in now granting a stay.
The Court has long had the power to penalise parties for refusing to agree to ADR. This decision now makes it clear parties can potentially be compelled by the court to engage in a non-court-based resolution process. To what extent judges exercise their discretion to make such orders shall remain to be seen.
