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Court of Appeal confirms position on compulsory ADR- Construction industry focus

In August 2023, our Disputes team wrote about two legal developments surrounding the issue of whether alternative dispute resolution (ADR) could become compulsory.  We can now update you in this Foundations article about the outcome of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 (‘Churchill’) and the impact of this case for the construction industry.

A reminder of the issues

A quick reminder of the issues to bring you up to speed.

• There has been longstanding case law based on a decision in the case of Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 (‘Halsey’) that prevents the courts from requiring parties to a dispute to engage in mandatory mediation, or other forms of ADR. This has been the case even if mediation may be in the best interests of the parties. This reasoning was based on the assumption that to force a party to take part in mediation would be a breach of the right to a fair trial under the ECHR.

• The question ‘should mediation be compulsory’  arose again in the recent Churchill case. The defendant argued the claimant should have pursued ADR options before pursuing a claim through the courts. The court disagreed with the defendant. However, it allowed an appeal of its decision to proceed straight to the Court of Appeal given the importance of the issue.

• As part of that appeal, the Civil Mediation Council, the Chartered Institute of Arbitrators and the Centre for Effective Dispute Resolution were given permission to intervene in the appeal. Their objective being, to overturn the longstanding decision in Halsey.

So, what happened on appeal?

The decision in Halsey was reassessed by a specially convened Court of Appeal panel including Baroness Carr, Lady Chief Justice, Sir Geoffrey Vos, Master of the Rolls, and Lord Justice Birss.

They unanimously held that comments in the Halsey judgment about the issue of of compulsory meditation were not a necessary part of the reasoning that led to the ultimate decision in that case. In particular, the Court of Appeal clarified that although the Halsey principles are still influential, they are ‘not a straitjacket that binds judicial discretion’.

What this means is, if the court wants to stay proceedings to order parties to engage in mediation, or other forms of ADR, it can do so – particularly where it is proportionate to so and so long as the order preserves the essence of the parties’ right to a judicial hearing. The focus is on fair, expedient and cost-effective dispute resolution and whether parties will be under a mandatory requirement to take place in mediation or other forms of ADR will remain case specific.


This decision has not gone as far as making ADR compulsory in all cases, but mediation and ADR will now have an increased focus and role within the resolution of disputes.  This decision is also an important reminder for parties and legal teams to consider ADR at all stages.  It is fair to say that our experience of the Technology and Construction Court is that Judges are in practice strongly recommending (if not technically requiring) that the parties mediated their dispute before progressing past the directions stage – especially if they had not already mediated and in one case which we were involved in there was an insistence on a second mediation.

Common forms of construction contract expressly include ADR clauses encouraging, or in some cases, mandating parties attempt to settle before issuing proceedings. This decision therefore reinforces what is already relatively common within the construction industry.

If you need help with a construction dispute or would like to know more about ADR, please get in touch.


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