Court orders “short sharp mediation” – “capable of cracking even the hardest nuts”

In DKH and Others v City Football Group Limited [2024] EWHC 3231 (Ch), heard in November 20204, the court made an order that the parties mediate. The case involved a trade mark dispute between a fashion brand and a football club about branding on professional sports players' kit. The Claimants sought an order for compulsory mediation before the trial.

The order made by the court – and its outcome – is perhaps a significant example  of the growing obligations on the court to encourage settlement confirmed by virtue of changes to the Civil Procedure Rules, effective from 1 October 2024.   

The arguments marshalled by the parties were    likely representative of the sort of issues raised in past and future cases. 

The Claimants, made a number of points: 

• The CPR changes “recognise a sea-change in the approach of the courts to ADR”. 
• An important aspect of the overriding objective is to ensure that the court’s resources are properly allocated not only to the parties but to other court users. 
• The findings of the Civil Justice Council ADR Working Group show that that mediation has worked in complex and entrenched disputes, including where the ADR process appeared to be unlikely to succeed and where one or other party believed that he or she had a strong case.
• The instant dispute was deemed by the Claimants to be capable of resolution: it was not a particularly complex case, several variables might allow an out-of-court compromise  - and which might not be available in a judgment of the court (such as  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). 
• There had been no mediation to date, although there have been unsuccessful settlement negotiations.

The Claimants proposed a “short, sharp, mediation” of one day before the end of December which would save on trial costs and would also potentially save court time and resources.

The Defendant resisted mediation and argued:

• Both parties wanted their position to be judicially determined.
• Mediation was not realistically likely to lead to settlement.
• It was “very late in the day” to seek the order and parties had already spent hundreds of thousands of pounds. The trial was imminent. 
• The Defendant had very limited availability for a mediation in December. 

The court summarised the Defendant’s position as being 

“In short, it is too late in the day; it is not a case where his client is being obstructive; mediation will fail; and this is a case where a ruling is needed.”

Notwithstanding these objections the court made the order sought. The reasons provided, like the parties’ submissions, likely applicable to many past and future cases. 

“in many cases the parties’ positions in the litigation are diametrically opposed and it may easily be said that each party requires a judicial determination. But nonetheless the parties come through ADR to recognise the desirability of settling for less than their strict legal rights and compromising their positions. Experience shows that mediation is capable of cracking even the hardest nuts. The process sometimes succeeds in cases where the parties appear at first to have intractable differences. Here, as the claimants said, everything would be up for grabs at a mediation, including the form of representation of any branding on the relevant kit, timing and money. The claimants are also right to say that the dispute is self-contained and that a mediation would be able to focus on possible solutions rather than raking over historical grievances.”

Whilst the court noted that it was late in the day, it also recognised potential advantage in the parties’ positions having been crystallised through pleadings and the service of witness statements. And that it: 

“is indeed sometimes an objection to mediation that it is premature, proposed at a stage when the parties’ positions are unknown. That cannot be said here”

Interestingly, the court also rejected the Defendant’s submission that the experienced legal representatives could reasonably have been expected to have settled the case by the hearing if settlement were possible:

“that argument does not do full justice to experience, which shows that bringing the parties together through mediation can overcome an entrenched reluctance of parties to negotiate, even where sincere. The purpose of mediation is to remove roadblocks to settlement.”

The court accordingly rejected the submission that a mediation had low prospects of success and that adjudication by a court was necessarily required noting that the range of options available to the parties to resolve the dispute through mediation went “beyond the binary answer a court could provide. There may be solutions other than yes or no.” 

Despite the Defendant objecting, the parties did go to mediation and on 13 January 2025 notified the court that the case had indeed settled, as a result.  Not only is the case an interesting example of the application of the changes to the CPR, it gives a clear steer to lawyers about the need to actively encourage mediation and remain open to a “non-binary” approach to resolution.