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Mandatory Mediation – The Rules They Are A-Changin’
November 25, 2024
David Watkinson continues to reflect on the impact of Churchill and considers the impact of the recent change in the CPR.
On the 1st October 2024, the Civil Procedure (Amendment No.3) Rules 2024 (SI 2024 No.839) came into force. They are set out at the end of this blog. They are the result of the judgment of the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (commented upon in my blog in January this year, “Mandatory Mediation-The Churchill Case- the end of a beginning?”).
To summarise, they add to the overriding objective, the Court’s general powers of management and when giving directions in fast track, interim track, or multi-track cases, by enabling the Court to order or encourage the parties to engage in alternative dispute resolution. In deciding costs issues, the Court may also take into account failure to comply with such an order or unreasonably failing to engage in ADR.
And on the 14th October such an order was made by Master Victoria McCloud in Charles Elphicke v Times Media [2024] EWHC 2595. It was a defamation case. Mr Elphicke is a Tory MP. He sued the Times newspaper. He withdrew the claim. The Times claimed its costs. The hearing was about his claim that the Times’ costs should be reduced; they were by 20%.. Then the Master made an order in these terms at para 137,
“I shall include a provision of my own motion that the parties must engage in alternative dispute resolution as to the costs claimed by the Defendant. Good reason will need to be shown if the form of that dispute resolution is at any less engaged a level than mediation via Costs Lawyers given that the Bill here more than justifies Costs Lawyer input. The time for commencing detailed assessment is to be extended until conclusion of any such mediation, or the point at which either party indicates it is not prepared to proceed and wishes to go to assessment. Any party which decides not to engage in ADR, as above or to ‘call it off’ must be in a position to justify that non-engagement to the Costs Judge and be alert to the provisions of CPR 44.11 and indeed the developing common law since Churchill.”
It is of interest to read the learned Master’s reasons for her order, based on her judicial experience.
“134. Here there remains the prospect of long, expensive Detailed Assessment proceedings with counsel and costs lawyers occupying perhaps several days, at a cost comparable with that of many trials. In all cases where the claim is at an end, such as here, but significant costs are incurred and must be determined, in my judgment it would be remiss of a judge not to make use of the principles in cases such as Churchill and direct that, before a fresh set of proceedings is in effect commenced so as to lead to detailed assessment, there must be proper dispute resolution. I fully expect such an order to become the norm when a judge directs detailed assessment unless costs are agreed.
- So often in the years when I sat as a Deputy Costs Judge of the Supreme (later Senior) Court I saw that bills of costs were listed for lengthy hearings yet once Costs Lawyers (and sometimes counsel) attended the hearing and discussed matters, or once I had ruled on points of principle in the bill very shortly, the matter was resolved pragmatically.
- It is my judgment essential that courts do what they can in the present congested court system to bring forward that settlement process so that assessments of costs are not needlessly listed whether in our County Courts (busy as they are) or in the Senior Courts Office, only to ‘go short’ when – at last – some pragmatic discussion takes place between lawyers who know both the ‘ropes’ and the reality of how assessment proceeds. .I do not doubt that consequences can and will result generally if parties in such cases come before the Taxing Master (Costs Judge) and have failed to do the court the courtesy of proper engagement in pre-assessment ADR”.
The factors the learned Master took into account when coming to her decision are noteworthy. They were :-
- the mediation was likely to be successful (on the basis of her own experience)
- that would lead to significant saving in costs
- relevant expertise was available to enable success to be achieved
- steps should be taken to relieve the “congested court system”.
Of course, factors will differ from case to case. My previous blog indicated others, and they are certainly not exhaustive. Nor does it follow that the existence of these powers will result in the making of such orders becoming a new norm. Nevertheless, the gate has opened.
Finally, there has been some speculation as to what do the Rules mean by “engage” in this context (see Law Society Gazette 11th October 2024 “Rule Changes Ramp UP ADR Push”). Does it mean just considering whether or not to embark on ADR, or something more active? For the answer to this we can turn to William Shakespeare. When in Much Ado About Nothing, Benedick says to Beatrice “Enough. I am engaged” – he means he’s going to kill Claudio, not think about it (Act 4, Scene 1 line 317). Action, not just thoughts and words then.
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Civil Procedure (Amendment No.3) Rules 2024 (SI 2024 No. 839)
These rules came into force on 1October 2024. Amendments were made to Parts 1, 3, 28, 29 and 44.
The Explanatory Note states:
“These rules amend the CPR by-
amending Part 1 (overriding objective), with additional amendments in Parts 3, 28 and 44, to promote the use of alternative dispute resolution in response to the decision of the Court of Appeal in Churchill v Merthyr Tydfil CBC [2023] EWCA Civ 1416”.
The changes include:
CPR r.1 amended to insert:
“(f) promoting or using alternative dispute resolution (a new r.1.1.(2)(f))
“(e) ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution” (a new r.1.1.(2)(e)).
CPR r.3 Courts general powers of management
The court may…
“(o) Order the parties to engage in alternative dispute resolution” (a new r.3.1 (o)).
CPR r.28 (7) (1) The matters to be dealt with by directions under rule 28.2 (1) (directions for management of a fast track case):
- “(d)whether to order or encourage the parties to engage in alternative dispute resolution” (a new r.28 (7)(1)(d))
CPR r.28.14 The matters to be dealt with by directions under rule 28.2 (1) (directions for interim track case)
- “(f) whether to order or encourage the parties to engage in alternative dispute resolutions…” (a new r.28.14(a)(f))
CPR R.29.2 Case Management of a multi track case.
- “(1A) When giving directions, the court must consider whether to order or encourage the parties to engage in ADR” (a new r.29.2 (1A))
CPR r.44.2 Court’s discretion as to costs. By way of r.44.2 (4), in deciding what order (if any) to make about costs, the court will have regard to all the circumstances included (a) the conduct of the parties. By way of r.44.2 (5) the conduct of the parties includes:
- (e) whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in ADR” (a new r.44.2 (5)(e))
