Growing Focus on ADR in Commercial Disputes

High Court orders mediation in trade mark dispute – what does this mean for Alternative Dispute Resolution in commercial disputes?

Author: Rachel McCulloch

Key contact: Aisha Wardell

At a pre-trial review in the case of DKH Retail Ltd and others v City Football Group Ltd [2024] EWHC 3231 (Ch) last November, the High Court issued a decision which underscored the growing emphasis on alternative dispute resolution (ADR) in commercial disputes.

In its case against City Football Group Ltd, the claimants DKH Retail Ltd and others applied for an order for the parties to participate in compulsory mediation. The Court agreed and ordered the parties to mediate with the aim of resolving the dispute prior to the trial taking place.

For those unfamiliar with ADR or mediation, check out our brief explainers.

Since the 2023 Court of Appeal decision in Churchill v Merthyr Tydfil [2023], courts have had the power to order parties to engage in ADR. The Civil Procedure Rules now include the court’s express power to order the parties to use ADR.

Why did the claimants wish to use mediation in this case?

The claimants argued:

• This was a case capable of resolution as it is not particularly complicated;
• There were areas of dispute that could allow for a type of compromise beyond the scope of a court judgment; and
• A “short, sharp, mediation of one day” might help the parties avoid further costs, save court time and save resources.

The defendants argued:

• There was little likelihood of reaching settlement in this case and the court should only order mediation where there is a realistic prospect of success;
• The parties wanted a judicial decision, and this was necessary for the Defendant to know whether it can place branding on football kit and other clothing; and
• It was too late to seek mediation as the parties had already spent hundreds of thousands of pounds and the trial was imminent.

Why did the judge order mediation to take place?

The judge observed that:

• Although the mediation request was made late in the proceedings, it could be advantageous, as the parties had clearly defined their positions through pleadings and witness statements;
• The range of options available to the parties in attempting to resolve the dispute through mediation went beyond what the court could order in proceedings and could offer more options for settlement; and
• Mediation would be short and sharp, with minimal documents required. It would not significantly disrupt the parties’ preparations for trial.

In this case, the High Court’s approach seems to have been effective: on 13 January 2025, the parties notified the court of a settlement and a trial was therefore avoided.

What are the implications of this decision?

The outcome demonstrates the court’s willingness to order parties to engage in mediation at a late stage of proceedings, and in high-profile commercial disputes. Courts may increasingly exercise their discretion to order mediation, and so parties should be reminded to consider ADR as a form of dispute resolution.

If you have a dispute you want to pursue, are considering mediation, or would like more information on Alternative Dispute Resolution in commercial disputes, please contact our Litigation team.