Churchill v Merthyr Tydfil: compulsory ADR and the costs risk of saying no

The claimant brought a nuisance claim about Japanese knotweed. The council argued he should first have used its internal complaints procedure. The Court of Appeal, with the Master of the Rolls giving the leading judgment, held that the court can stay proceedings or order the parties to engage in non-court dispute resolution. It declined to treat the earlier statement in Halsey v Milton Keynes General NHS Trust that parties cannot be compelled to mediate as binding.

The court did not set fixed rules. Whether to order ADR depends on the circumstances, including the form of process, the cost and the likelihood of resolution, and whether the order is proportionate to the legitimate aim of settling disputes fairly and quickly.

Following Churchill, the CPR was amended with effect from 1 October 2024. The overriding objective now refers to promoting or using alternative dispute resolution, the court’s case management powers expressly include ordering parties to engage in it, and CPR 44.4 lists whether a party failed to comply with an order to engage in ADR, or unreasonably failed to engage in it, among the conduct factors the court considers when deciding costs.

An unreasonable refusal to mediate has long carried a costs risk, but the court now has clearer rule-based authority to act on it. A successful party who ignored reasonable invitations to mediate may recover a reduced proportion of its costs. A losing party who refused may face indemnity costs on part of the claim. The outcome remains discretionary and fact-specific.

Evidence matters. Courts look at what was offered, when, and why it was declined. A short, reasoned response explaining why ADR is premature or unsuitable carries more weight than silence. Similarly, offers to mediate should be specific and practical rather than tactical.

Keep a clear record of all ADR proposals and responses. Consider ADR again at each key stage, including after disclosure and before detailed assessment, because costs disputes themselves can be mediated or negotiated. Where costs are claimed, set out the ADR history so a Costs Lawyer can address it in submissions on the costs order or in later negotiation.

This article summarises reported judgments for general information in England and Wales. Read the full judgment and any later guidance or appeals before relying on it in a particular matter.