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Mediation update: will courts soon be ordering parties to mediate?

In 2013, Sir Alan Ward in Wright v Michael Wright suggested that it is perhaps time to review the rule in Halsey v Milton Keynes 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.

Sir Alan wondered whether some bold judge would perhaps accede to an invitation to rule on the questions he raised about Halsey (including whether what was said was obiter) so that the court could look again at Halsey in the light of (what was in 2013) ten years of developments in this field.

Seven years on, despite much mention of Halsey, no one has taken up Sir Alan’s invitation. However, two recent cases indicate that this may soon happen.

Lomax v Lomax

Lomax v Lomax concerned CPR 3.1(2)(m), which says the court may:

“… take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.”

The defendant refused to agree to an early neutral evaluation (ENE) hearing taking place and Parker J decided at first instance that, having regard to the defendant’s refusal, she did not have power to order such a hearing. The Court of Appeal disagreed. There was no express requirement in subparagraph (m) for the parties to consent and it saw no reason to imply any limitation on the court’s power to order an ENE hearing to the effect that the agreement or consent of the parties was required.

In coming to its decision, the Court of Appeal referred to Halsey and Dyson LJ’s words that the court’s role was to encourage, not compel, and that it seemed likely that compulsion of ADR would be regarded as an unacceptable constraint on the right of access to the court (and therefore a violation of article 6 of the European Convention on Human Rights (ECHR)). However, it did not consider that Halsey assisted with the proper interpretation of subparagraph (m) because, it said, it was dealing with a very different situation, namely whether a court can oblige parties “to submit their disputes to mediation” as opposed to ordering an ENE hearing as part of the court process.

In any event, the court did not consider that an ENE obstructed a party’s access to the court in any material way or acted as an “unacceptable constraint”. Instead, ENE was “a step in the process which can assist with the fair and sensible resolution of cases” and, if the parties did not settle their case via the ENE, their dispute could still be determined by the court. It also said limiting the court’s power to only being able to order an ENE hearing where the parties consented would go against the parts of the overriding objective that expense should be saved and cases allotted an appropriate share of the court’s resources.

As the court distinguished between interpreting sub-paragraph (m) (of CPR 3.1(2)) and compelling a party to mediate, it felt it did not need to accept Sir Alan’s invitation and consider the question raised in Wright v Michael Wright as to what Halsey determined and the extent to which it remains good law. However, notably it did comment that “the court’s engagement with mediation has progressed significantly since Halsey was decided”.

McParland & Partners Ltd and another v Whitehead

McParland & Partners v Whitehead concerned a disclosure guidance hearing (DGH) under the disclosure pilot scheme (operating under PD 51U), which was before Sir Geoffrey Vos, Chancellor of the High Court. Unusually for a DGH, he gave a reserved judgment so that he could “clarify some aspects of the way in which the Disclosure Pilot is intended to work”. He also made some interesting remarks about mediation.

It seems that before a “useful mediation could take place”, both sides agreed that it was necessary to see from disclosure whether their suspicions about certain issues in dispute were justified. Consequently, the court “encouraged” the parties to proceed to a privately arranged mediation as soon as disclosure had occurred.

In the judgment, Sir Geoffrey notes that he mentioned the recent Court of Appeal decision of Lomax v Lomax to the parties and that it:

“… inevitably raised the question of whether the court might also require parties to engage in mediation despite the decision in Halsey v Milton Keynes.”

However:

“… the parties fortunately agreed to a direction that a mediation is to take place in this case after disclosure.”

Conclusion

Both Lomax v Lomax and McParland v Whitehead indicate a change in mood.

The court’s distinction between interpreting the CPR and ordering mediation meant that Lomax v Lomax did not provide the moment for Sir Alan’s invitation to be accepted. Notwithstanding this, an ENE hearing was ordered against one party’s wishes because doing so furthered the overriding objective and still allowed the parties to return to court if the ENE did not resolve matters. It seems difficult not to apply the same reasoning to any order that parties mediate.

McParland v Whitehead gives a clear signal that the question of whether parties can be compelled to mediate is on the court’s mind. Had the parties not agreed to mediate, after seven years, Sir Alan’s invitation to review Halsey may very well have been taken up.

Watch this space!

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