Alternative Dispute Resolution (“<span class="news-text_medium">ADR</span>”) continues to gain prominence in the UK legal landscape, as highlighted by the High Court's recent decision in <span class="news-text_italic-underline">DKH Retail Ltd and others v City Football Group Ltd [2024] EWHC 3231 (Ch).</span> This case marks a key moment in the growing importance of ADR, with the court mandating mediation shortly before trial to encourage the resolution of a trademark dispute. The decision illustrates a broader trend towards prioritising ADR to mitigate the time, costs and procedural burdens traditionally associated with litigation.
The dispute in <span class="news-text_italic-underline">DKH Retail Ltd</span> centred around a trademark conflict between the claimant, Superdry, and the defendant, City Football Group, related to branding on promotional sportswear bearing the terms “Super” and “Dry”. The claimants contended that the branding could confuse consumers by resembling Superdry's trademark. During the pre-trial review, the claimants requested that the court mandate both parties to engage in mediation, arguing that the case's manageable complexity made mediation an effective means of reducing legal costs.
Despite opposition from the defendants, who questioned the timing and likelihood of settlement, Judge Miles exercised his discretion to order mediation. He noted that even when parties hold firm positions, structured, face-to-face negotiations often create opportunities for progress. Mediation, he observed, could help "unlock even the most difficult disputes" through focused and efficient communication.
The ruling in <span class="news-text_italic-underline">DKH Retail Ltd</span> builds on earlier cases, including the Court of Appeal's decision in <span class="news-text_italic-underline">Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416</span>. The Court of Appeal confirmed that judges have the authority to pause proceedings and compel ADR when it is proportionate and does not infringe on the right to a fair trial. This judgment, supported by both UK legal principles and pre-Brexit European case law, strengthens the position of ADR in the dispute resolution process.
In addition to judicial support, recent changes to the Civil Procedure Rules (“<span class="news-text_medium">CPR</span>”) further promote ADR. Amendments made in October 2024 introduced significant updates, including:
The cases of <span class="news-text_italic-underline">DKH Retail Ltd</span> and <span class="news-text_italic-underline">Churchill</span>, along with the recent updates to the CPR, signal a significant shift in how commercial disputes are managed in the UK. Courts are increasingly encouraging, and sometimes compelling, parties to mediate in order to alleviate the strains of litigation. The success of the mediation in <span class="news-text_italic-underline">DKH Retail Ltd</span> underscores the effectiveness of this approach.
This growing trend reflects the judiciary's commitment to resolving disputes at an early stage through negotiation rather than prolonged court proceedings. By promoting dialogue over confrontation, courts aim to reduce pressure on court resources and facilitate fair, efficient and cost-effective resolutions. For businesses, this shift means that incorporating ADR, particularly mediation, into their dispute management strategies is becoming essential.
The transformation highlighted by these developments marks a broader cultural shift within the legal profession - a shift from adversarial litigation towards cooperation and consensus-building. The future of commercial dispute resolution is likely to see negotiation playing a central role, as ADR becomes increasingly embedded in legal practice.
