Is mediation “one size fits all”?

By Katarina Morgan

Associate Solicitor

17 February 2025

Insights News

There has been development in the world of mediation recently. It has been reported that the parties in the High Court case of DKH Retail Limited & Others -v- City Football Group Limited [2024] EWHC 3231 (Ch) (“DKH Retail”) rolled up their sleeves and settled their dispute following a compulsory mediation ordered by the Court.

Background

DKH Retail involved a trademark dispute between the “Superdry” clothing brand and Manchester City’s football kit. The main issue was whether the branding used on the team’s shirts with the words “Super” and “Dry”, would be perceived by the public to be associated with their sponsor, Asahi Super Dry 0.0% lager, or the clothing brand.

The case was disputed and at the pre-trial review (i.e. the last hearing before trial), the Claimant made an application for compulsory mediation. The Defendant contested that application on the basis that it was too late in the day for mediation and that they wanted judicial determination on their legal position. The Court ordered the parties attend compulsory mediation. Following that compulsory mediation, the parties settled their dispute.

Compulsory mediation

Mediation involves the parties instructing a qualified independent mediator to facilitate settlement discussions, with the view that the parties voluntarily reach a settlement. It is far more cost and time effective than litigation and because the parties have control as to how, when, with whom and where it is conducted, for the most part, mediation tends to be successful.

Compulsory mediation isn’t a new method of alternative dispute resolution (ADR) but it has come into the legal press recently. Traditionally, the Courts have encouraged parties to undertake ADR, but for claims falling into the Small Claims track (usually with a value of up to £10,000), the Courts usually order it. However, up until November 2023, it was only an encouragement in the higher courts and not something the Courts could compel.

The Court of Appeal case of Churchill v Merthyr Tydfil [2023] EWCA Civ 1416 was the tipping point; it was held that the Court has the power to compel parties to undertake ADR. In October 2024, the Court’s right was embedded in the Civil Procedure Rules (CPR) thus enabling them to encourage or order the parties to undertake ADR.

ADR

Mediation is one of many ADR options, but it tends to be the most discussed about, after negotiation which is predominately used in disputes throughout the lifetime of a case.

Other methods of ADR include adjudication, arbitration and conciliation. The facts, parties and contractual documents may impact what method of ADR may be required for a particular case, although it may not necessarily prevent the parties from conducting mediation or negotiation alongside other methods of ADR.

So, is litigation falling apart at the seams?

ADR certainly has its advantages, which I have highlighted above. That view is entrenched following the introduction of Fixed Recoverable Costs (FRC) in October 2023 which brought about cost recoverability caps on claims based on their value and complexity.

But is that the end of litigation? In short, no. Claims will still be brought before the Courts usually because parties want their “day in Court”, they may perceive ADR as a sign of weakness and thus refuse to undertake it, or they just want a judge to set a precedent. For the most part though, these views are likely to now be overcome by compulsory ADR being ordered, but that doesn’t mean people still won’t litigate. NB: for mediation, any settlement is optional – it is the parties who voluntarily enter into it rather than a judge ordering the outcome – so if mediation isn’t successful, the parties can still pursue litigation.

The Churchill and DKH Retail cases have recently thrusted mediation back into the light emphasising that it (and ADR generally) should be undertaken by all parties in a disputed matter. Whilst the facts of the case may determine what method of ADR should be used for a dispute, mediation can usually be undertaken at any stage, even alongside other methods of ADR. To answer my question at the outset then, it is fair to say that mediation can act as a “one size fits all” – maybe just not in the form of football shirts!

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