Elizabeth England appears in Court of Appeal in landmark case on compulsory ADR

10th November 2023

Elizabeth England represented the Social Housing Law Association in the Court of Appeal in Churchill v Merthyr Tydfil County Borough Council CA-2022-001778. The appeal was heard over three days before the Lord Chief Justice, the Master of the Rolls and Lord Justice Birss.

The Social Housing Law Association (“SHLA”) were given permission to intervene in this case, in which the Court of Appeal were asked to determine whether a County Court Judge was constrained from ordering a stay of proceedings to allow a complaint to first go through the council’s internal complaints procedure (“ICP”) in relation to the alleged incursion of Japanese Knotweed on his land.

The case of Halsey v Milton Keynes General NHS Trust [2004] has long been interpreted to say that parties cannot be compelled to engage in mediation.

Elizabeth England, on behalf of SHLA, has argued that the comments in Halsey were obiter and in any event are no longer compatible with modern principles of civil practice and procedure. Though Halsey was explicitly concerned with mediation, SHLA along with other interveners, have argued that an ICP is an ‘alternative’ to litigation and as such should be considered as a form of ADR.

For social housing providers, who are bound to follow guidance published by the Housing Ombudsman, it is a requirement to engage the ICP when the landlord is on notice of a service failure. However, the Pre Action Protocol for Housing Conditions Claims (England) allows a tenant to engage the Protocol at an earlier stage when the landlord is in notice of a defect but has not remedied it within a reasonable period. The Protocol explicitly refers to the landlord’s ICP as a form of ADR, and the Ombudsman guidance on the interpretation of the Protocol also points to an expectation that the parties will have attempted to resolve the dispute through an ICP before a claim is issued.

The Court of Appeal has been asked to determine that the landlord’s internal complaints procedure is a form of ADR. This would be a departure from the traditional view of ADR models which are thought to require an independent 3rd party. If the Court agrees with the principle, it is likely to give guidance on the requirements for an ICP to be construed as a proper form of ADR.

The Court of Appeal has also been asked to determine whether, and in what circumstances, the court should stay a claim to allow the parties to engage with an alternative form of dispute resolution. The impact for social housing providers would be that, if a tenant has not attempted the ICP before issuing the claim, then it is open to the landlord to apply to stay the claim to allow that process to be completed. This has particular relevance to housing conditions claims but could apply in other disputes.

The issue of legal costs is of particular concern to housing providers. The argument has long been that if a tenant had resolved their dispute through an ICP then there would be no need to engage a solicitor. In the Churchill case, the heads of claim included the potential loss of property value and a claim for damages for loss of amenity as well as the eradication of the Japanese Knotweed.

The Court was concerned that a potential claimant engaging an ICP would not know the value or merit of his claim without first consulting with a solicitor to know whether settlement pre-action was desirable, either through an ICP or other ADR. The costs of engaging the solicitor would potentially be occasioned by the defendant’s fault. Even though an ICP is ‘cost free’ (that is, it does not necessitate a procedural cost), it is not necessarily ‘costs free’ (that is, the costs of engaging a solicitor would still be at large). It is not known how the Court of Appeal will deal with this issue, if at all. Indeed, this may be a battle for another day.

Judgment will follow in the next few months. What can be said at this stage is that the process has begun to assist housing providers in their battle to encourage more cases into ADR and avoid lengthy and costly litigation.

Elizabeth was instructed by Katrina Robinson MBE of Capsticks LLP.