The decision of the Court of Appeal in Churchill[1] marks a significant and long-anticipated development, particularly in the field of Alternative Dispute Resolution (“ADR”), as it finally establishes a legal basis for courts to order parties to engage in ADR. Some may view this as an inevitable step, given the rising number of cases settled out of court and the pressures on an overburdened and underfunded court system.[2] Since 2016, the use of mediation has been steadily increasing[3] due to its effectiveness, with an overall settlement rate of 89%. The impact of Churchill, coupled with the recent amendments to the Civil Procedure Rules (“CPR”), suggests that this number may increase further.
Giuseppe Franco and Freddy Ashe begin by summarising the key findings in Churchill and the revisions to the CPR introduced in October 2024. They then move to a comparative analysis, providing an overview of the statutory mediation framework within the Italian legal system, where mediation plays a more structured and mandatory role. This is contrasted with the current position under English law, where mediation remains largely voluntary but is increasingly encouraged by courts, with the new provisions allowing for judicial orders to engage in ADR.
The case in Churchill
The case involved an allegation that the Council had allowed Japanese knotweed to encroach from its land onto Mr Churchill’s property. At first instance, the Council applied to stay proceedings, arguing that Mr Churchill had failed to engage with its pre-action protocol. While the application was dismissed, the judge granted the Council permission to appeal, reasoning that Mr Churchill had acted unreasonably by bypassing the pre-action protocol and proceeding directly to issuing his claim.
In Churchill, the Court of Appeal set out to resolve three main issues. First, it considered whether the first-instance judge was correct in dismissing the Council’s application based on the decision in Halsey.[4] The Court determined that the first-instance judge’s reliance on Halsey—specifically, the reasoning that compelling parties to mediate would obstruct their right of access to court—was obiter dictum rather than ratio decidendi, and thus did not need to be followed.
Second, the Court considered whether the judge could lawfully stay proceedings or order the parties to engage in a non-court-based dispute resolution process. The primary concern was whether this would infringe on claimant’s right to a fair trial under Article 6 of the European Convention on Human Rights (“ECHR”). However, after analysing several cases from the ECHR and Court of Justice of the European Union (“CJEU”), the Court ruled that such an order would not violate this right, provided it serves a legitimate aim and is proportionate to achieving that aim. Consequently, the Court concluded that, as a matter of law, the authority exists to stay proceedings or require the parties to engage in non-court-based dispute resolution processes.
Third, after confirming that the authority exists, the Court turned to the question of when such a stay should be granted. Many factors were deemed to be relevant, including those suggested by the Bar Council. Significantly, the Court affirmed that it should not “lay down fixed principles as to what will be relevant to determining those questions [as] it would be undesirable to provide a checklist or score sheet for judges to operate”.[5] The Court emphasised that judges are well-equipped to determine what is necessary to ensure a fair, efficient, and cost-effective resolution of the dispute.
As a result, the Court concluded that the decision to stay should be considered by judges on a case-by-case basis, taking into account all relevant circumstances.
The CPR changes following Churchill
Following Churchill, the CPR Committee launched a consultation on ADR, resulting in rule changes that took effect on 1 October 2024. The key revision is to CPR 1.4 (i.e. the overriding objective), which now provides that dealing with cases justly and at proportionate cost includes “ordering and encouraging the parties to use ADR”. In line with this, CPR 3.1 has been amended to empower courts to “order the parties to engage in ADR”, a power now also reflected in the courts’ ability to give directions to this effect at the case management conference.[6] Lastly, CPR 44.2 now requires courts, when making cost orders, to consider “whether a party failed to comply with an order for ADR, or unreasonably failed to engage in ADR”.
The position in Italy
Like many other jurisdictions, Italy has long recognised the benefits of mediation and ADR. In 2010, following input from Parliament, the Italian Government enacted legislative decree No. 23 (Decree), which established out-of-court mediation as a mandatory precondition for court litigation in specifically identified civil law matters.[7]
Since the Decree’s enactment, plaintiffs have been subject to a statutory duty to attempt mediation before proceeding to court. If this obligation is not fulfilled, the judge will adjourn the hearing for up to three months[8] to allow parties to commence the mediation procedure. The consequences are severe for the party that fails to attend the initial mediation session. If the absent party is the plaintiff, the judge must declare the claim inadmissible, effectively ending the proceedings. Additionally, the judge may order the non-compliant party to bear the costs of the proceedings.
To prevent any censure for limiting access to justice, the Decree provides several checks and balances. Most importantly, the duty to mediate does not fully obstruct the parties’ access to court, as the only requirement is that parties attend the initial mediation session. If the first meeting proves unsuccessful, they are free to resume court proceedings. Moreover, the filing of a mediation request interrupts the statute of limitations, thereby securing the parties’ rights if mediation fails. Finally, the Decree ensures confidentiality, stipulating that information disclosed and declarations made during mediation cannot be used as evidence in any subsequent court proceedings.
The Decree extends these features to cases where mediation is required by contract[9] or where the judge, at their discretion, orders the parties to attempt mediation. In such instances, mediation can become a mandatory precondition even if the statutory duty under the Decree does not directly apply to the matter.
In essence, the Italian system encourages parties to engage in mediation without restricting their right to pursue claims in court. One might say that the system “gently” nudges parties out of the courtroom.
Comparative analysis and commentary
It is clear that England and Italy have come to appreciate the value of mediation and other ADR mechanisms, as both systems broadly recognise the court’s authority to order parties to engage in non-court-based dispute resolution. Given the systemic differences between civil and common law, it is unsurprising that the legal basis for this authority is founded in distinct sources. In England, although now firmly embedded in the CPR, the authority originally stemmed from case law.[10] In Italy, judges draw their power from legislation, specifically from the Decree.
However, when it comes to deciding how and when judges should exercise this authority and how the mediation process should be structured, England and Italy have taken different approaches.
Through the enactment of the Decree, Italy has adopted a systematic approach by precisely identifying the civil law matters to which the statutory and mandatory duty to attempt mediation applies. Under this framework, the courts do not have discretion; if a matter falls within the scope of the Decree, the parties are required to attempt mediation before proceeding to court regardless of the circumstances. Moreover, the Decree established a highly structured and formalised procedure, setting specific duties for the parties, their lawyers, and mediators, as well as rules concerning the duration of the process and its interplay with the statute of limitations and any subsequent court proceedings. For instance, these rules cover matters of evidence-taking and confidentiality.
In contrast, in England and Wales, there is no legislation governing mediation. Instead, a series of judicial decisions have gradually shaped the courts’ approach to mediation, guided by the overriding objective of the CPR. At the same time, the mediation process has been pieced together by the initiatives of individual entities, both private and public, aimed at promoting the use of ADR. This has resulted in a somewhat fragmented framework, where each institution – and sometimes even individual mediators – adopts its own preferred procedure. Whilst this lack of uniformity may cause some uncertainty, it is not necessarily a drawback. Mediation, like many other ADR mechanisms, offers value by allowing parties the flexibility to tailor the process to their specific needs. This is why the Decree establishes certain mandatory rules, but still grants parties the freedom to select the mediation rules for their procedure, provided they ensure confidentiality and the impartiality of the mediator.[11]
However, one might argue that certain aspects of the English mediation framework could benefit from a more systematic approach, similar to that adopted in Italy. By “systematic approach”, we mean the establishment of clear principles, something that the Court of Appeal in Churchill notably refused to do. One area that could benefit from such overarching rules concerns the question of when judges should exercise their authority to order parties to engage in mediation. Churchill affirmed that this should remain a matter of judicial discretion, with various factors influencing each case. While this flexible approach allows for nuance, it risks creating an inconsistent system shaped by differing court decisions. A system aiming to promote ADR should not only protect claimant’s access to justice, but also ensure that the advantages of being required to engage in ADR (or a particular form of ADR) are accessible to all parties, regardless of the specific circumstances. One way to achieve this is by establishing clear criteria for when the duty to attempt mediation applies along with strong sanctions for non-compliance, as the Decree does in Italy.
Another area for potential improvement is the interplay between mediation and the statute of limitations. Currently, under English law, the commencement of mediation does not pause the limitation period for bringing a claim. If parties wish to suspend the limitation period to attempt mediation, they may enter into an agreement to that effect, a “standstill agreement”, which suspends or extends the statutory or contractual limitation period. In the alternative, the claimant can issue a protective claim before the expiry of the limitation period and then request an immediate stay of the proceedings to enable a mediation to take place.
Conclusion
Many will be familiar with the old saying “you can lead a horse to water, but you cannot make it drink”. For nearly two decades, this was not a concern for those practicing mediation in the legal industry. However, the Churchill decision, and its impact on the practice of mediation, bring this adage into sharp focus. As English courts are now empowered to order parties to engage in mediation, it remains to be seen what circumstances and factors will be deemed relevant in exercising this power. Given the wide discretion courts still retain regarding when to order mediation and when to issue cost orders to sanction parties, the outcomes could be inconsistent, potentially leading to dissatisfaction among users.
In such context, Italy’s model may offer valuable lessons for the establishment of clear principles on when mediation should be mandatory, ensuring broader and more consistent access to the benefits of mediation. By adopting a more structured framework, particularly in areas such as the timing of mediation, the consequences of non-compliance, and the impact on issues like the statute of limitations, English law could enhance its system and improve the overall effectiveness of mediation as an ADR tool.
[1] Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416
[2] Between 2010 and 2019, over half of the courts in England and Wales were closed.
[3] In 2016, 41% of mediators and 43% of lawyers saw an increase in mediation (Centre for Effective Dispute Resolution).
[4] Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576
[5] Churchill [66]
[6] CPR 28.7(1)(d) for the fast track; 28.14(1)(f) for the intermediate track; 29.2(1A) for multi-track.
[7] Legislative decree no. 149 of 2022 has recently enlarged the scope of application of this statutory duty, which now applies to: condominium; rights in rem (diritti reali); division of assets; inheritance; family arrangements; leases; loans; medical and sanitary malpractice; defamation; insurance, banking and financial contracts; partnerships; consortia; franchising; contract for works; network contracts; supply contracts.
[8] That is the minimum statutory duration of the mediation procedure.
[9] Although the enforceability of a clause prescribing mediation as a precondition to litigation can always be subject to debate.
[10] See authorities in Churchill [49].
[11] Article 3
