Compulsory mediation in housing conditions claims
New rules on compulsory mediation could have a major impact on social landlords, writes Ibrar Hussain.
Amendments to the Civil Procedure Rules (“CPR”) now explicitly empower the court to order compulsory mediation. Those amendments include:
- CPR 1.4(2)(e): ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution
- CPR 3.1(o): ordering the parties to engage in alternative dispute resolution
- CPR 3.1(p): any other step or making any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation.
This may have potentially significant implications for landlords, including in the context of housing conditions claims. Landlords may be required to engage in dispute resolution before proceeding to trial, and potentially against their will.
Compulsory mediation became a major topic of conversation following the case of Churchill v Merthyr Tydfil CBC [2023]. In Churchill the Court of Appeal said:
“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 Court of Appeal concluded that mediation can be ordered, provided it does not infringe a party’s right to a fair trial under Article 6 of the European Convention on Human Rights. The court also said that other factors that may influence whether mediation should be ordered include:
- the realistic prospect of the claim being resolved through dispute resolution
- any imbalance in the parties’ resources, bargaining power, or legal sophistication
- the urgency of the case and whether mediation would cause unreasonable delay
- any valid reasons given for not wishing to mediate, such as previous failed attempts
- CPR 44.2.1(e): when considering costs, courts may take into account whether a party unreasonably failed to engage in ADR or comply with a mediation order.
Since Merthyr, and following amendments to the CPR, the case of DKH Retail Ltd and others v City Football Group Ltd [2024] EWHC 3231 (Ch), further demonstrates the court’s willingness to order parties to explore dispute resolution in civil claims. In DKH, a trademark dispute case, the High Court granted the claimants' application for an order for compulsory mediation.
The claimants had proposed a “short, sharp” mediation which the defendant resisted. Despite objections, including the argument that mediation should only be ordered where there was a realistic prospect of success, the court nonetheless ordered compulsory mediation. The case ultimately settled before trial.
In the context of housing conditions claims, landlords may now be compelled to engage in mediation even if they doubt that meditation will have a positive outcome and/or the landlord wishes to defend at trial based on the evidence.
Whilst the changes to the CPR aim to promote quicker, more cost-effective resolution of disputes, reducing distress to the parties and the burden on the courts (aims no doubt supported by all involved in civil litigation) compulsory mediation against the will of either or both parties my ultimately lead to further cost and distress.
There are also as yet unaddressed concerns as to how the court will approach orders for mediation in a consistent manner, with most housing conditions cases being dealt with in the County Court, and therefore at the discretion of the Judge presiding. The specific factors which the court may consider of significance when making a decision in the context of housing conditions claims is also as yet unknown.
However, notwithstanding these concerns, it is clear that the court now expects parties to engage fully in dispute resolution as a genuine attempt to settle claims and any party objecting to mediation will need to provide compelling reasons for objecting or risk potential cost sanctions. Landlords will therefore need to carefully consider their arguments against mediation on a case by case basis if they are to seek to persuade the court that mediation is inappropriate.
Ibrar Hussain is an Associate at Weightmans.
If you would like to get in contact you can email Ibrar Hussain (This email address is being protected from spambots. You need JavaScript enabled to view it.) or Matthew Lake (This email address is being protected from spambots. You need JavaScript enabled to view it.)