Mediation in The Chancery Division

The trouble with the progressive refinement of the rules for running commercial litigation, including the word “reforms”, is that whereas they are undoubtedly well – meant, in practice they have led to increased “front – loading” and higher costs. This is because each step or stage is regarded by the parties and their lawyers as being crucial: so more and more effort is invested early on.

This is fine if it leads to an early resolution of the dispute. Otherwise the costs can be crippling and a deterrent to parties considering asking for a court’s help in the first place .

Which leads me to mediation. In the recently reported decision in the McParland & Partners v Whitehead ([2020] EWHC 298 ) ,Vos J., the judge who is the Chancellor , actually mentioned it. I remark on it in this way because such a mention in Chancery Division cases, including IP ones in the Patents Court, is rare. The judge recorded that he had “encouraged the parties to proceed to a privately arranged mediation as soon as disclosure had occurred, since both sides agreed that it was necessary to see from disclosure whether their suspicions were justified before a useful mediation could take place.”

The judge referred to the recent Court of Appeal decision in Lomax v. Lomax [2019] EWCA Civ. 1467 (where the court decided it had power to order an early neutral evaluation under CPR r. 3.1 (2) (m) without the need for the parties to consent to such an order and whether the court might order a mediation ) . The judge also made a passing reference to a 2004 Court of Appeal decision, Halsey v. Milton Keynes General NHS Trust [2004] IWLR 3002 where the court had held that to oblige truly unwilling parties to refer their disputes to mediation was unacceptable (I could add that the mediation is also highly likely to be unsuccessful).

Vos J did not have to decide the point because “fortunately”, as he recorded, the parties agreed to have a mediation after disclosure.

I would only further add that it was a shame that the senior judge of the Chancery Division did not refer to what is set out about mediation in the Chancery Guide, which practitioners – and judges – are required to observe. There is guidance there about the use of ADR, and mediation in particular . This guide is regularly updated and has been commended to us all by – the Chancellor. That guidance should have been a starting point (see the CPR, vol. 2, 1A – 135 to 137 and this includes Early Neutral Evaluation and Financial Dispute Resolution).

In case the White Book (where the Chancery Guide may be found) is not immediately to hand, here are the salient excerpts:

THE ROLE OF THE COURT, it is there stated in 135 that:

“Legal representatives in all cases should consider with their clients and the other parties concerned the possibility of attempting to resolve the dispute of particular issues by ADR and they should ensure that their clients are fully informed about the most cost–effective means of resolving the dispute.”

Easier said than done in some cases but it is the job of the court, where appropriate, to encourage and even knock heads together – and it can only be helpful just to enquire at a CMC whether this requirement has been adhered to. To make that enquiry is often crucial: because, without it, parties are reluctant to raise the question themselves for fear that the other side will interpret it as a sign of weakness.

Indeed 136 goes on – under the heading of “STAYS FOR MEDIATION” - to state

“Where appropriate the court will, as part of the over-riding objective, encourage the parties to use ADR or otherwise help them settle the case or resolve particular issues”.

This discussion should, it says, take place – at least – at the CMC stage. And further:

“The court will readily grant a stay at an early stage of the claim to accommodate mediation…”

And at the end:

“… if the court considers that one or both parties are unreasonably refusing to attempt ADR, the court may order a stay with a direction for the parties to take reasonable steps to consider ADR”. (My emphasis)

Let us hope that the Chancellor finds another opportunity soon to remind all of us who work in the Chancery Division courts of this guidance .