A court can stay proceedings and order parties to take part in alternative dispute resolution (ADR).
Summary
Mr Churchill brought a nuisance claim against his local authority. He claimed that Japanese knotweed from the authority's land had encroached on his property causing damage, loss of value and loss of enjoyment. The local authority applied for a stay to force Churchill to use their complaints procedure.
The Court of Appeal considered whether it has the power to order a stay in proceedings to allow parties to take part in non-court dispute resolution process. Although it refused the application for a stay in this case, it decided that in general it could stay proceedings, as long as this did not threaten the claimant’s right to a fair trial and was proportionate to achieving the aim of settling the dispute fairly, quickly and at reasonable cost.
Background
Mr Churchill bought a property next to land owned by Merthyr Tydfil County Borough Council. Churchill claimed Japanese knotweed had encroached from local authority's land onto his property and caused damage, a reduction in property value, and loss of enjoyment.
Churchill’s solicitors sent the local authority a letter of claim. The local authority responded, enquiring why Churchill had not used its complaints procedure. The local authority said if Churchill started court proceedings without first using the complaints procedure it would apply to the court for a stay and costs.
County Court claim
Churchill issued a claim for nuisance in the County Court. The local authority applied for a stay.
The court found that Churchill and his lawyers had acted unreasonably by failing to engage with the local authority's complaints procedure. This was contrary to the spirit and letter of the Practice Direction on Pre-Action Conduct and Protocols.
The court dismissed the stay application, stating that it was bound to follow Dyson LJ’s statement in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 (Halsey): “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court”.
Court of Appeal referral
The local authority appealed. The circuit judge referred the case to the Court of Appeal because it raised an important point of principle and practice.
Seven other organisations were added as parties to the proceedings to act as ‘interveners’ to help the court reach a decision.
The court's decision
The Court of Appeal found the comment in Halsey was ‘obiter’ (made in passing and not binding in other cases). Halsey was about costs and not whether to order parties to take part in mediation.
The court was not bound by it and did not have to dismiss the local authority's application for a stay.
When a court can stay proceedings
The Court of Appeal held that a court can lawfully stay existing proceedings for, or order, parties to engage in a non-court based dispute resolution process, but should only do so if it:
does not impair the very essence of the claimant’s right to a fair trial, and
is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost
Based on the circumstances of the case, the court refused to order a stay as things had moved on considerably. It said, “there is little point in doing so now, since nothing will be gained if a one month stay were granted as the council seeks.”
Comments
This judgment could be helpful where, for example, a client has made, or wants to make, a complaint to an Ombudsman and wants proceedings to be stayed.
The court declined to lay down fixed principles on when a court can stay proceedings. It said the following factors raised by the Bar Council would be relevant:
the form of alternative dispute resolution (ADR) being considered
whether the parties are legally advised or represented and whether ADR was likely to be effective or appropriate without such advice or representation
whether it was made clear to the parties that, if they did not settle, they were free to pursue their claim or defence
the urgency of the case, the reasonableness of the delay caused by ADR, and whether that delay would vitiate the claim or give rise to or exacerbate any limitation issue
the costs of ADR, both in absolute terms and relative to the parties’ resources and the value of the claim
whether there was any realistic prospect of the claim being resolved through ADR
whether there was a significant imbalance in the parties’ levels of resource, bargaining power or sophistication
the reasons given by a party for not wishing to mediate, for example there had already been a recent unsuccessful attempt at ADR
the reasonableness and proportionality of the sanction, if a party declined ADR in the face of an order of the court
Civil Procedure Rules
The court referred to relevant sections of the Civil Procedure Rules (CPR), including:
CPR 1.4(1) furthering the overriding objective by actively managing cases
CPR 1.4(2)(e) encouraging parties to use an ADR procedure if the court considers that appropriate and facilitating the use of such procedure
CPR 3.1(4) when giving directions, the court will take into account whether a party has complied with a practice direction and any relevant pre action protocol
CPR 3.1(5) the court may order a party to pay money into court if it has without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol
CPR 26.5(1) allows a party, when filing a completed directions questionnaire to make a written request for the proceedings to be stayed while the parties try to settle the case by ADR or other means and
CPR 26.5(3) allows the court to stay proceedings, even without the parties requesting it, if the court considers that such a stay would be appropriate
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