Power to stay civil proceedings for alternative dispute resolution
Continuing our series considering recent civil practice and procedure cases in the context of family law… Continue reading
Stay for dispute resolution: Churchill v Merthyr Tydfil
For a family lawyer (like me) one of the ironies of Churchill v Merthyr Tydfil County BC  EWCA Civ 1416 (29 November 2023) is that a process which 45 years ago we would have thought was almost uniquely applied only in family cases is now part of many forms of civil proceedings. After Churchill the question is to what extent, if any, can civil proceedings be stayed – that is, put on hold by the court – to require parties to attempt alternative dispute resolution (ADR). This is explained by Sir Geoffrey Vos MR (who sat with Lady Carr LCJ and Birss LJ) in Churchill v Merthyr Tydfil. Mediation (or ‘conciliation’ as we called it in Bristol in 1976 and for a few years after that) and other forms of family proceedings ADR as these apply are not mentioned at all by the Court of Appeal.
The issue in Churchill v Merthyr Tydfil (at ) was “whether a court can lawfully order the parties to court proceedings to engage in a non-court-based dispute resolution process, and, if so, in what circumstances it should do so”? Alongside that question, said the Court of Appeal, was whether it was bound by the court’s earlier decision on mediation in Halsey v Milton Keynes General NHS Trust  EWCA Civ 576;  1 WLR 3002?
Mr Churchill (C) had bought a house in the Merthyr Tydfil (MT) council area. The property was encroached upon from MT land by Japanese knotweed. C consulted solicitors and issued proceedings. He claimed damages on the basis that the value of his property had been reduced. MT sought a stay of the proceedings. They said that C should have used its own complaints procedure before issue.
The deputy district judge who considered MT’s stay application felt he must refuse it. He said he was bound by the Halsey case; but he held that C and his lawyers had acted unreasonably by failing to engage with MT’s complaints procedure. C’s conduct was, he felt, “contrary to the spirit and the letter of the relevant pre-action protocol” (under the Civil Procedure Rules (CPR) 1998): see .
Stays of proceedings and protocols
Central to the outcome of Churchill v Merthyr Tydfil – or rather, to what was said by the Court of Appeal in the case about stay of proceedings for ADR – is the combined effect of the powers of the court to stay proceedings and the effect in civil proceedings of stay applications and the parallel pre-action protocols (PAPs). “Stay” in civil proceedings is easy to define. The glossary to CPR 1998 and Family Procedure Rules (FPR) 2010 each says the same: that a “stay imposes a halt on proceedings”. The only further steps a party may take, says the glossary, is where this is permitted by rules or ordered by the court. Proceedings can be continued if a stay is lifted.
Halsey v Milton Keynes General NHS Trust  EWCA Civ 576;  1 WLR 3002 was a case about where costs orders should fall where a party had refused ADR or mediation. The judgment of the Court of Appeal was given by Dyson LJ (with Ward and Laws LJJ). The court expressed its view on compulsion of a party to agree to mediation:
“ We heard argument on the question whether the court has power to order parties to submit their disputes to mediation against their will. It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest terms. It is another to order them to do so. It seems to us 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.”
Pre-action protocol in civil proceedings
The pre-action protocol (PAP) system in civil proceedings was introduced alongside CPR 1998. It is now in Practice Direction on Pre-Action Conduct and Protocols, which is set out immediately after CPR 1998 at Section C (referred to widely in Churchill v Merthyr Tydfil). This 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 approaching 20 types of PAP (see para 18: 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 response in each category should be dealt with.
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 Jet2Holidays Ltd v Hughes  EWCA Civ 1858,  1 WLR 844, (8 November 2019) the then protocols – the modern list is set out in para 18 of the practice direction – were described as “now an integral and highly important part of litigation architecture” (at ). In Access to Justice: Final Report 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”.
Handing down the judgment of the court in Jet2Holidays Sir Terence Etherton MR (with Hamblen and Flaux LJJ) said of PAPs (at ) that they had the following purposes (identified in the Final Report at (Ch 10, para 1))
- (a) “to focus the attention of litigants on the desirability of resolving disputes without litigation;”
- (b) “to enable them to obtain the information they reasonably need in order to enter into an appropriate settlement”; or
- (c) “to make an appropriate offer (of a kind which can have costs consequences if litigation ensues)”; and
- (d) “if a pre-action settlement is not achievable, to lay the ground for expeditious conduct of proceedings.”
In passing it can be noted that, by contrast with CPR 1998, there is only one protocol in Family Procedure Rules 2010 (FPR 2010) tacked on at the end of FPR 2010 Part 9 (Applications for a financial remedy) as Annex – Pre-action protocol. In practice it is unlikely that it is ever used by parties or their advisers.
Issues in Churchill; and is Halsey v Milton Keynes binding on ADR?
Sir Geoffrey Voss MR defined the main issues for the court in Churchill v Merthyr Tydfil County BC  EWCA Civ 1416 at :
- Was the [deputy district judge who first dealt with the case] right to think that Halsey bound him to dismiss the Council’s application? This involves a consideration of whether the passages in Halsey relied upon by the [deputy district] judge were part of the main reasoning of that decision.
- If not, can the court lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process?
- If so, how should the court decide whether to stay the proceedings for, or order, the parties to engage in a non-court-based dispute resolution process? This involves a consideration of the relevance of the kind of non-court-based dispute resolution process being considered.
Halsey v Milton Keynes General NHS Trust  EWCA Civ 576;  1 WLR 3002 was a case about where costs orders should fall where a party had refused ADR or mediation. The court said of compulsion to require a party to agree to mediation (cited by Sir Geoffrey Vos MR in Churchill ):
“ We heard argument on the question whether the court has power to order parties to submit their disputes to mediation against their will. It is one thing to encourage the parties to agree to mediation, even to encourage them in the strongest terms. It is another to order them to do so. It seems to us 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 Geoffrey Vos MR analysed Halsey and its view, as in  (above) that the court could not compel a party – or parties – to attend ADR. He held that this passage in Halsey was obiter. So in Churchill v Merthyr Tydfil the Court of Appeal need not follow what the earlier court had held. He continued:
“ Accordingly, I have reached the clear conclusion that - of the judgment in Halsey was not a necessary part of the reasoning that led to the decision in that case (so was not part of the ratio decidendi and was an obiter dictum).
 As a matter of law, therefore, the judge was not bound by what Dyson LJ had said in those paragraphs.”
He therefore concluded (at ) as follows and as a finding prior to his decision that to stay proceedings for ADR was lawful:
“(i) - of Halsey was not part of the essential reasoning in that case and did not bind the judge to dismiss the Council’s application for the stay of these proceedings.
(ii) The court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made does not impair the very essence of the claimant’s right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.”
The deputy district judge had not been bound by Halsey; and nor will other courts in future be so bound. This is so, at least where litigious subjects are covered by the PAP practice direction (in para 18 to the practice direction; and see paras 8 and 9 (above)).
Can a court lawfully stay proceedings for ADR?
Sir Geoffrey’s conclusion on his second question – can the court lawfully stay proceedings or order the parties to engage in ADR? – was yes. He said at  that “… 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.” To reach this conclusion Sir Geoffrey started from a person’s right to a fair trial (European Convention on Human Rights (1950) Art 6.1); followed that through by reference to CPR 1998 especially r 26.5(3) which enables the court to stay proceedings if a stay is thought by the judge to be appropriate; and in conclusion he considers relevant ECtHR jurisprudence, CJEU cases and a variety of domestic case law (see  – ).
Mr Churchill had asked the court to say that no power to stay existed at all. Sir Geoffrey did not agree (see ). The court had power to order a stay as a matter of law. The court could decide in each case whether a stay should be ordered – on application by a party or of its own initiative. And, if the power is to be exercised, at : “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 Art 6 rights, in pursuit of a legitimate aim, and in such a way that it is proportionate to achieving that legitimate aim.”
The court was unwilling to order a stay in this case; but it indicated its disapproval as to how C and his lawyers had proceeded by saying each side should bear their own costs (per ). Though nominally “successful” on his appeal, C did not get his costs:
“(i) there should be no order as to costs of this appeal as between the parties to the proceedings, and
(ii) the parties ought to consider whether they can agree to a temporary stay for mediation or some other form of non-court-based adjudication”.
In this case the Court of Appeal would not order a stay: things had gone on too far.
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