Do I have to take my dispute to mediation?

Andrew Koffman

In an article in December 2023 we reported on the Court of Appeal’s decision which, for the first time, gave the courts the power to compel parties to mediate. 

Court of Appeal backs compulsory alternative dispute resolution (ADR) | Bermans 

There have been further developments since then.  In October 2024, changes to the court rules (CPR) were made to give the court the specific power to order the parties to take part in alternative dispute resolution (ADR) such as mediation. 

A further significant development came with a High Court judgment in November 2024 in the case of DKH Retail Limited v City Football Group Limited. 

DKH Retail Ltd & Ors v City Football Group Ltd [2024] EWHC 3231 (Ch) (21 November 2024) 

This was a claim for breach of a trade mark owned by the “Superdry” clothing brand.  Asahi have a similarly named product, Asahi Super “Dry” 0% beer, and are a sponsor of Manchester City FC.  Superdry’s owner brought a claim against City’s commercial operations company, claiming that the use of the beer’s branding on the club’s kit was a breach. 

A matter of weeks before the trial, the claimant proposed mediation and the defendant declined, saying that it was too close to trial; that the parties had already incurred substantial costs; and that there was little chance of mediation resulting in a settlement.  The defendant pointed out that the claimant had made a witness statement in the case saying they would not be prepared to allow the “Superdry” brand to be shown as the sponsor on any particular club’s kit because of the “tribal” nature of football fans, which made a settlement unlikely. 

Nevertheless the court ordered that the parties take part in mediation.  Mr Justice Miles’s reasoning was as follows: 

“Experience shows that mediation is capable of cracking even the hardest nuts.” 

Taking all the arguments for and against into account, he considered that: 

“The purpose of mediation is to remove roadblocks to settlement. I am unable to accept the submissions of the defendant that a mediation here has low prospects of success and that adjudication by a court is necessarily required. The range of options available to the parties to resolve the dispute through mediation goes beyond the binary answer a court could provide…  A mediation of this case will be short and sharp, and the documents needed for it would be brief.” 

By way of a brief but highly significant postscript to the judgment, it was noted that the parties actually reached settlement following the mediation! 

Clearly, now courts have the power to compel parties to take part in ADR, they can be expected to use it when they consider it appropriate, irrespective of opposition from one party – or even, it may be assumed, from both or all the parties. 

We have already seen examples of courts starting to use this power.  In almost all court cases the parties, and their lawyers, need to consider its implications. 

Even if the court stops short of making an order for compulsory mediation, the court has long had the power to penalise a party that has unreasonably refused to take part in mediation (Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576) and that power seems likely to be used more and more frequently in future. 

If you have a commercial dispute in the civil courts, the likelihood is that you will be expected to take part in either mediation, or if not, another method of dispute resolution such as “neutral evaluation” or expert determination – or, at the very least, a structured settlement meeting – and to report back to the court as to the outcome.  

Note: This article concentrates on disputes of significant value.  Modest value claims (up to £10,000) tend to become “small claims” which now have their own compulsory mediation regime. 

For further information regarding the changes, please contact Andrew Koffman or a member of our Litigation and Dispute Resolution team.