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Update to the Civil Procedure Rules: Court Power to Order ADR

Posted on in Real Estate Disputes

Update to the Civil Procedure Rules: Court Power to Order ADR

This article is co-authored by David Parker, Paralegal

In November 2023, the Court of appeal unanimously held that courts have the power to stay proceedings and order the parties to engage in out-of-court alternative dispute resolution (ADR) processes, provided it does not  restrict the claimant’s right to a judicial hearing and is “proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost” (Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416).

This decision overturned the previous judgment that the court could  not order disputing parties to participate in ADR ( Halsey v. Milton Keynes General NHS Trust [2004] EWCA Civ 576, [2004] 1 WLR 3002).

Updates to the CPR

The Civil Procedure (Amendment No 3) Rules 2024, which came into force on 01 October 2024, amended the Civil Procedure Rules (CPR) to reflect this decision. Key changes include:

  • Part 1: The overriding objective of the CPR, of dealing with cases justly and proportionate cost, now includes the provision of “ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution” as part of the court’s active case management tools (1.4(2)(e).
  • Part 3: The court’s general case management powers now explicitly allow the court to “order the parties to engage in alternative dispute resolution” (3.1(2)(o)).
  • Part 28: A provision has been added to enable the court to issue directions “to order or encourage the parties to engage in alternative dispute resolution” in both fast-track and intermediate-track cases (28.7(1) and 28.14(1)).
  • Part 29: Rule 29.2(1) has been amended to include a new section (1A): “When giving directions [in multi-track cases], the court must consider whether to order or encourage the parties to engage in alternative dispute resolution”.
  • Part 44: When assessing costs, the court will now consider whether a party failed to comply with an order ADR, or unreasonably failed to engage in ADR (44.2(5)).

Closing remark

How the court will exercise this newly formalised power remains to be seen. Our Real Estate Disputes team has extensive experience in litigation and alternative forms of dispute resolution, such as mediation and arbitration.  Please get in touch if you have a property-related dispute that you would like to discuss.