Disputing parties can be forced to engage in alternative dispute resolution

A recent Court of Appeal ruling confirmed that a Court can stay proceedings and force disputing parties to engage in alternative dispute resolution (ADR).

Here, Partner and Joint Head of Housing and Regeneration Josephine Morton and Trainee Solicitor Robyn Christian-Flynn explore the case of Churchill v Merthyr Tydfil CBC [2023] EWCA Civ 1416 (Churchill v Merthyr CBC) and what it means for future dispute resolution proceedings.

Nuisance proceedings for Japanese knotweed

In the case of Churchill v Merthyr Tyfil CBC, Mr Churchill acquired his property in 2015 and claimed that Japanese knotweed encroaching from the Council's adjoining land had caused damage and reduced the value of his property. He initiated nuisance proceedings in July 2021 and in response the Council questioned why he had not used its internal corporate complaints procedure.

Mr Churchill proceeded with his legal proceedings and the Council brought the matter before the Court, threatening a stay application and costs. In the first instance, the Judge dismissed the Council’s stay application as he believed that he was bound to follow Lord Dyson’s statement in Halsey v Milton Keynes General NHS Trust [2004] (Halsey) 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.”

The Judge stated, “if Halsey remains good law, then this does not get around the difficulty for the Defendant that it would appear that I cannot compel the Claimant to engage in a particular form of ADR.”

However, the Council was granted the right to appeal this decision — which it did.

The key issues discussed by the Court of Appeal

At appeal, four crucial questions were considered by the Court:

1. Was the Judge bound by Halsey to dismiss the Council's stay application?
2. Can the Court lawfully stay proceedings or order parties to engage in non-court-based dispute resolution?
3. If so, how should the Court decide on such measures and what factors are relevant?
4. Should the judge have granted the Council's application to stay the proceedings for Mr Churchill to pursue a complaint under the internal complaint’s procedure?

Can the Court stay proceedings and order alternative dispute resolution

In a comprehensive conclusion, the Court of Appeal unanimously agreed that:

1. The Judge was not bound by specific passages in Halsey and the Court does have the power to stay a claim for (or order the parties to engage in) a form of ADR.
2. The Court can lawfully order ADR, provided it does not undermine the claimant's fundamental right to a judicial hearing and is proportionate to achieving a fair, quick and cost-effective dispute resolution.
3. No fixed principles were laid down for determining a stay or order for ADR, as the Court stated that it would be ‘undesirable’ to issue a checklist for judges to operate. However, the specific type of ADR will be relevant when the Court considers whether to force the parties to engage in it.
4. The Court said that the Judge would have granted a stay had he not concluded that he was bound by Halsey to refuse one. The Court declined to order a stay at this stage because the proceedings had moved forward and ADR deemed it appropriate.

What this ruling means for housing dispute resolution

This decision opens a door to considerations in future disputes as parties are urged to explore ADR. For example, it may be that internal complaints procedures can be used as a form of dispute resolution in the context of housing disrepair claims.

Any internal complaints procedure needs to be fit for purpose for it to be effective and for the Court to accept it as a means of ADR. Following this decision, organisations should look to review and strengthen internal complaints procedures and ensure that they are sufficient to be used by disputing parties seeking to resolve matters outside of court and avoid the associated costs.

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If you would like advice about a housing dispute or alternative dispute resolution, talk to us.