On 29 November the Court of Appeal gave its judgment in the long-anticipated case of Churchill -v- Merthyr Tydfil County Borough Council  EWCA Civ 1416. It started life as a simple dispute between an individual and a council over Japanese knotweed but assumed such importance that there were no fewer than seven bodies admitted as interveners: the Law Society, the Bar Council, CMC, CEDR, CIArb and two housing association bodies.
So what was the case really about, and does it change the way civil and commercial mediation disputes are to be handled in future?
The basic case
This was ever so simple. There was an outbreak of the horrible Japanese knotweed on some spare land owned by the Council, and it encroached onto the garden of a Mr James Churchill. As we know, this knotweed is extremely invasive and very expensive to remove.
This council, and many more, had a Council Complaints Procedure, and when Mr Churchill’s lawyers sent a letter of claim to the Council, they were asked why they had not used this Procedure. Churchill’s lawyers persisted and issued proceedings. The Council applied to the court for a stay, and for costs, to allow the Procedure to be followed.
The district judge decided he could not order such a stay, being bound by the decision in the well-known case of Halsey -v- Milton Keynes General NHS Trust  EWCA Civ 576 where Dyson LJ said “…to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction to their right of access to the court” and that this would offend Article 6 of the European Convention on Human Rights, which establishes the right to a fair trial.
Why does this matter to mediation?
Dyson LJ’s words have long been interpreted as saying that for the court to order a stay for mediation to take place, and especially if a party was unwilling, would offend a citizen’s right to a fair trial. The courts have tried to encourage mediation as much as possible, mainly by threatening costs orders against those who refused to mediate, and even Halsey itself had a checklist of situations where a party was at risk on costs if they declined an invitation to mediate. But no such forms of “persuasion” have been entirely effective.
Churchill was a curious case to provoke so much interest in mediation because it didn’t concern mediation as we know it. This Council Complaints Procedure was arguably not even independent since it was conducted by a council employee, and all mediators know how important it is to be, and be seen to be, independent. But in the judgment, there was talk of this Procedure, early neutral evaluation, negotiation etc and especially mediation, so this Procedure was seen to be near enough to a form of Alternative Dispute Resolution (ADR) for it to be taken as an example.
Back to the main principles
The main judgment was given by Sir Geoffrey Vos, Master of the Rolls. Also on the bench was Susan Carr, the new (and first ever) Lady Carr of Walton-on-the-Hill, Lady Chief Justice. So this was an impressive bench. The judgment was unanimous.
Turning back to Dyson LJ’s words above, one would have thought that they were unambiguous: imposing “an unacceptable obstruction to their right of access to the court”, and therefore contrary to Article 6.
This court thought differently. There was a lengthy discussion (the court avoiding the Latin where possible, though it surely still has its uses) of the difference between ratio decidendi and ratio obiter. As lawyers very well know, ratio decidendi is an argument which is central to the issue and determinative of the court’s decision, whereas ratio obiter is merely a superfluous comment which is not central to the case.
The court decided that Dyson LJ’s words were obiter, not central, just a side comment, and therefore this court was not bound by them. The court did indeed have the power to order a stay for mediation to take place. It follows that all inferior courts will be bound by the precedent that parties may be ordered, willing or otherwise, to follow a method of ADR before they can have a trial.
So now what?
At 74i), Vos MR said that “- 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.” At 74iii) he said he would not “…lay down any fixed principles as to what will be relevant to determining the question of a stay of proceedings…” so the trial judge could decide what he may order.
74ii) is worth quoting in full: “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 a reasonable cost.” One will recognise that the last few words come straight from CPR Part 1.
By this time, Japanese knotweed had lost its relevance. The important issue is that all the interveners had won because litigators are no longer bound by Halsey; the court can indeed order a stay for ADR to take place. Mediators at last are going to be busy. The barrier of Halsey has gone, and we get back to what Lord Woolf intended with his Civil Procedure Rules launched on 1 April 1999. Plus ça change, plus c’est la même chose.