The last couple of years have seen a dramatic rise in the promotion of alternative dispute resolution generally and mediation in particular by the English judiciary. The Court of Appeal in Churchill v. Merthyr Tydfil County Borough Council[1] held that, contrary to popular belief, the courts had the power to order parties to mediate; the Civil Procedure Rules were duly amended to incorporate that power explicitly. And then, in DKH Retail Limited & Others v. City Football Group Limited[2], the court made the first compulsory mediation order.
Background
This was a trade mark dispute between the owners of the Superdry brand and the company that runs Manchester City Football Club’s commercial operations. The core issue was whether the branding of the club’s sponsor, Asahi Super Dry 0.0% lager, was likely to be seen by the public as denoting the Superdry brand.
At the pre-trial review, the claimants applied for a compulsory mediation order. They submitted that the dispute was capable of resolution. It was not a particularly complicated one, and there were several variables in the dispute between the parties which might have allowed for an out-of-court compromise (and which might not have been available in a judgment of the court). These included agreement about the form and size of any logo or lettering on the relevant sports kit, payment of money and the timing of any changes.
The defendants resisted the application. There had been settlement negotiations during the course of proceedings, and there was no realistic prospect that any mediation would be a success because the defendant wanted the question of whether it could use the Asahi branding on its kit to be judicially determined. The defendant noted that the application had been made very late – the trial was imminent, and the defendant had spent a lot of money getting to this point and had limited availability for a mediation in the interim.
The High Court’s judgment
Despite the defendant’s objections, the judge ordered the parties to mediate. He did not accept that the failure of previous negotiations meant that the mediation also was likely to fail, noting that ‘experience shows that mediation is capable of cracking even the hardest nuts’. He considered the flexibility of solution at the parties’ disposal should they mediate was a strong point in favour of mediation. He acknowledged that the application was late in the day but noted that that may in fact offer some benefit in the form of crystalised positions (as opposed to mediations that take place early in proceedings, when the parties’ positions are somewhat unknown). And finally, he anticipated that the mediation would be ‘short and sharp’ and would therefore not significantly disrupt the parties’ preparations for trial.
In a postscript to the judgment that must have been a great pleasure to write, the judge confirmed that the parties had indeed reached a settlement.
Takeaway
This judgment was undeniably significant as the first of its kind. What, perhaps, may be more interesting is seeing the circumstances in which other judges choose to follow suit (or not). The vindication of the judgment in this case will no doubt encourage them to do so. However, this was a markedly straightforward dispute. Will courts be equally willing to compel parties to mediate in higher value and more complex cases? We shall see.
[1] [2023] EWCA Civ 1416.
[2] [2024] EWHC 3231 (Ch).
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