Alternative Dispute Resolution (or ADR) has recently become an integral part of civil litigation rather than simply being encouraged. However, not every dispute should necessarily be mediated, even if the Court increasingly expects parties to engage in ADR or may even order them to do so. The real skill is therefore not to simply know when to mediate but more to identify when mediation seems premature, incapable of resolving the matter or disproportionate.
The starting point is very clear and expressed in the Civil Procedure Rules: the Courts are required to promote or use ADR as part of the overriding objective. Indeed, CPR 1.1 provides that dealing with a case in a just and proportionate manner includes “promoting or using alternative dispute resolution”. CPR 1.4 then further provides that active case management includes ordering or encouraging the parties to use ADR. This is an important development in the Courts’ approach as the question is no longer whether the parties are willing to mediate, but to positively encourage them to settle or where appropriate, to use the non-court-based process of ADR. It goes even further since the Court of Appeal case of Churchill v Merthyr Tydfil County Borough Council [2023], in which the Court held that a Court can lawfully stay the proceedings or order the parties to engage in ADR, provided doing so does not impact the essence of a party’s right to a judicial hearing and provided that it is proportionate to the aim of resolving disputes in a fair and quick way and at reasonable costs. Does this mean every Court dispute should be mediated? Quite the opposite. This case reminds us that the circumstances of a case and the characteristics of ADR remain relevant, although the Court has declined to provide a list of circumstances in which AR should or should not be ordered, resulting in a more nuance proposal: ADR should always be considered but mediation should not be treated as the automatic correct answer as it has its own limitations, which we explore below.
1. Where there is a genuine need for judicial determination
The most obvious limitation is where the parties require a binding judicial decision of an issue, which mediation cannot resolve. Indeed, a mediator does not determine the dispute, he facilitates negotiation and try to help the parties to reach an outcome. However, he cannot force a decision onto them.
2. Where mediation would be premature because the parties lack the information necessary to negotiate
Mediation works best where the parties have sufficient information to evaluate their respective positions. While that does not mean that every document must be disclosed before mediation, it means the parties must have enough elements to negotiate. This is not always the case at a pre-action stage or just after issuing proceedings. But one of the advantages of mediation can be that it facilitates settlement before the full costs of disclosure and expert evidence are incurred. A mediation conducted before the parties understand the factual or expert issues may simply result in the parties exchanging positions and concluding that the mediation has failed, costing precious time and money to the parties. In such circumstances, the appropriate response may be identifying the missing information, narrowing the issues down and revisiting mediation at a later stage.
3. Where the cost of ADR would be disproportionate
ADR is generally promoted because it can save costs. But ADR itself can be costly for the parties. They may incur mediator’s fees, solicitor’s and counsel’s fees, preparation costs, travel expenses etc. The overriding objective requires the Court to deal with cases at proportionate cost. The question should therefore be: “Is this particular mediation proportionate to the dispute?” and if the response is no, then the parties should have the possibility to walk away from it.
4. Where mediation would cause prejudicial delay
Time can be critical in litigation. A party may require urgent relief, preservation of evidence or a determination before a particular commercial event. In other cases, delay may create limitation problems or cause significant commercial prejudice. Case law expressly identifies potential delay as a relevant consideration when assessing whether refusal to mediate was unreasonable. The Court of Appeal in Churchill similarly identified urgency, the reasonableness of delay, and the potential effect of delay on limitation as relevant considerations when assessing whether an ADR process should be ordered. The lesson is not that urgency provides a general exemption from ADR. Rather, the parties should consider whether ADR can take place without compromising the litigation schedule. In an urgent case, a short mediation may be possible alongside an application for interim relief. In another case, mediation may simply be incompatible with the need for immediate judicial intervention.
5. Where there is no realistic prospect of a successful mediation
The Courts have repeatedly warned that parties should be cautious before concluding that mediation has no prospect of success. The threshold should therefore be approached carefully. The fact that:
– the parties strongly disagree;
– liability is denied;
– previous offers have been rejected; or
– the parties are far apart on quantum
does not, by itself, mean that mediation is pointless. Indeed, those circumstances may be precisely why mediation is useful. But there may be circumstances in which the evidence demonstrates that mediation has little realistic prospect of success, simply because the parties are too far away from each other.
Even then, the safer approach is usually to explain why mediation is unlikely to succeed rather than simply refusing it. The distinction matters because CPR 44.2 expressly provides that the Court may take into account whether a party failed to comply with an ADR order or unreasonably failed to engage in ADR when determining costs.
6. Where another form of ADR is better suited to the dispute
“Mediation” and “ADR” are not synonymous. The procedural rules recognise a range of mechanisms, including mediation or negotiation. The appropriate question is therefore:
“What dispute-resolution mechanism is most likely to resolve this particular dispute?”
Where the parties are commercially close but unable to meet in the middle of a relatively narrow gap, a without-prejudice meeting may be sufficient. Where the parties require a binding decision, arbitration may be appropriate. The fact that a party does not consider mediation appropriate should therefore not automatically be equated with a refusal to engage in any ADR.
7. Where there is a significant imbalance in bargaining power or sophistication
The consensual nature of ADR can become problematic where one party has substantially greater resources or bargaining power than the other. Churchill expressly identified significant imbalance in resources or bargaining power as a potentially relevant factor when considering whether an ADR process should be ordered. This does not mean that mediation is inappropriate whenever there is an imbalance. Indeed, skilled mediators can sometimes mitigate such differences. But parties and their advisors should consider whether the proposed process gives both sides a realistic opportunity to participate meaningfully. The objective is not simply settlement. It is fair and proportionate dispute resolution.
The practical consequence is that parties should approach ADR seriously even where they believe settlement is unlikely. Ignoring an invitation or refusing to engage without good reason can have costs consequences. CPR 44.2 expressly makes unreasonable failure to engage in ADR relevant to costs. But the existence of that risk does not mean that every refusal is unreasonable. The Courts continue to assess the circumstances of the individual case. Indeed, MJS Projects Ltd v RPS Consulting Services Ltd [2026] EWHC 884, demonstrates that the Court may accept a reasoned refusal to mediate where the relevant circumstances justified it. The Court concluded that the defendant had not acted unreasonably in declining mediation at the relevant stages, particularly given the parties had unresolved expert issues and the defendant’s engagement with other forms of ADR and settlement.
Conclusion
The traditional question was: “Should we mediate?”
The modern question should be: “What is the most proportionate dispute-resolution mechanism at this stage of the dispute?”
That requires consideration of:
- The nature of the dispute – can it be solved by a consensual decision?
- The merits – is there sufficient certainty to make compromise realistic?
- The evidence – do the parties have enough information to negotiate meaningfully?
- The timing – would ADR assist or merely delay the proceedings?
- The cost – is the process proportionate to the dispute?
- The prospects of success – is there a realistic prospect of resolution?
- The parties – are they sufficiently informed and able to participate effectively?
- The mechanism – is mediation actually the most appropriate form of ADR?
- Previous settlement attempts – have meaningful negotiations already taken place?
- The litigation objective – does the dispute ultimately require judicial determination?
The answers will not always point towards mediation. But they should always demonstrate that mediation has been considered appropriately.
The sophisticated position is therefore neither “always mediate” nor “never mediate.”
It is to ask whether ADR is appropriate now, whether mediation is the right mechanism, and whether the proposed process is capable of resolving the dispute fairly, quickly and at proportionate cost. In an increasingly ADR-focused civil justice system, knowing when to mediate may be just as important as knowing when not to do so.
If you require advice in relation to the contents of this Briefing Note, please contact Léopoldine (Leo) Mineo in our Dispute Resolution team.