Mediation, as a means of resolving disputes, has been gaining significant traction across various jurisdictions in recent years. In England and Wales, the courts have embraced compulsory mediation, and now have the power to compel parties to refer their dispute to mediation, even in the late stages of litigation. This progressive approach has yielded notable benefits, including reduced legal costs, expedited resolutions, and the preservation of commercial relationships. In light of these successes, it is thought that Scotland too should consider adopting a similar framework and empower the courts to mandate mediation and thus reaping the associated advantages.
For instance, in DKH Retail Ltd and Others v City Football Group Ltd, the High Court of England and Wales dealt with a trademark dispute involving the well-known Superdry brand and Manchester City’s commercial operations. The core issue was whether the promotional branding on the players' kit, which included the words "Super" and "Dry," was likely to be seen by the public as denoting the Superdry brand or the Manchester City’s sponsor, Asahi Super “Dry” 0.0% lager.
The claimants, owners of the Superdry brand, argued that the branding on Manchester City's kit infringed their trademark. The defendant contended that the branding was clearly associated with their sponsor, Asahi, and not with Superdry. The court ordered compulsory mediation despite the defendant's objections, marking a significant application of the amended English Civil Procedure Rules. This judgment was influenced by the precedent set in Churchill v Merthyr Tydfil County Borough Council, where the Court of Appeal held that judges in England and Wales could compel parties to engage in alternative dispute resolution (ADR) processes.
In Churchill, the claimant brought a nuisance claim against the local authority after discovering Japanese knotweed on his property. The local authority argued that Churchill should have explored non-court dispute resolution options before taking legal action. The Court of Appeal ruled that courts could stay proceedings and order parties to engage in ADR, provided it did not threaten the claimant’s right to a fair trial and was proportionate to achieving a fair, quick, and cost-effective resolution.
The decisions in these cases highlight a growing trend towards encouraging or even mandating ADR in civil disputes. This approach aims to reduce the burden on courts and promote more amicable settlements. In Scotland, the courts have traditionally been more cautious about compelling parties to engage in ADR. However, the benefits observed in the jurisdiction of England and Wales suggests that Scotland could greatly benefit from adopting a similar stance.
Why Scotland should follow suit
- ADR can significantly reduce the time and costs associated with lengthy court battles. By encouraging mediation and other forms of ADR, the Scottish courts could alleviate some of the pressures on the judicial system and provide quicker resolutions for disputing parties.
- ADR allows for more flexible and creative solutions that might not be possible through a court ruling. This can lead to more satisfactory outcomes for all parties involved.
- In many disputes, especially those involving commercial entities, maintaining a working relationship is crucial. ADR processes are generally less adversarial than court proceedings, helping to preserve business relationships.
- The success of compulsory mediation in cases like DKH Retail and Churchill demonstrates that even seemingly intractable disputes can be resolved through ADR. Scottish courts could adopt similar measures to encourage parties to settle disputes outside of court.
At Thorntons, we always take a pragmatic approach when dealing with disputes and actively encourage clients to consider ADR as an alternative to court. It can lead to significant cost saving and can resolve disputes much quicker than pursing matters through the courts.
If you have any questions about mediation or require assistance in dealing with a legal dispute, please contact our Dispute Resolution & Claims team on 03330 430350.
