The decision also grants inspection of a document included in the list of documents a witness had referred to or been referred to in preparing their evidence
The High Court has made an order at a pre-trial review which required the parties to mediate their trade mark dispute, despite the defendant’s objection that there was no real prospect of settlement and the parties needed a judicial determination: DKH Retail Ltd v City Football Group Ltd [2024] EWHC 3231 (Ch).
The Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 in late 2023 (see our blog post here) paved the way for the courts to compel even unwilling parties to engage in ADR. The Civil Procedure Rules (CPR) were amended in October last year to confirm the court’s power to compel ADR (see here). The present decision (which dates back to 21 November but has become publicly available more recently) appears to be one of the first in which the High Court has exercised that power in practice.
The court in the present case recognised that the dispute was between commercial parties with experienced solicitors, and therefore might have been expected to settle already if that was realistically possible. Noting however that “mediation is capable of cracking even the hardest nuts”, the court did not accept that a mediation would have low prospects of success – a view which appears to be vindicated by a postscript to the judgment recording that the parties had subsequently settled their dispute.
The decision illustrates the court’s broad discretion to order parties to engage in ADR, and some of the factors it may consider – including the prospects of settlement, though it suggests the court may not always accept the parties’ views on that question. Another factor that may have been relevant is that, while the dispute was between sophisticated commercial parties, it was presumably not the most complex of cases as it was proceeding in the Shorter Trials Scheme and, as the judge put it, a mediation would be “short and sharp” and would not significantly disrupt trial preparation. This was also, effectively, the last chance to settle before an imminent trial, so it could not be said that mediation was premature.
The judgment is also of interest in ordering inspection of a document included in the list of documents annexed to one of the trial witness statements, as required under Practice Direction 57AC. The order was made under CPR 31.14, which allows a party to inspect a document “mentioned” in a statement of case or witness statement (subject to the court’s discretion to refuse inspection).
However, the decision appears to leave open the question of whether inclusion in the PD 57AC list is sufficient, in itself, to amount to a “mention” for these purposes. While the judge said that the annexed list is part of the witness statement, he also noted that the list can include documents the witness has been referred to (emphasis added) as well as documents the witness has referred to, and his conclusion that the document was “mentioned” relied on the contents of the statement itself as well as the document’s inclusion in the list. It is not clear, therefore, whether simply including a document in the PD 57AC list will give the opponent a prima facie right to inspect it.
Background
This was a trade mark claim brought by the owners of the Superdry clothing brand in relation to Manchester City Football Club’s promotional branding relating to its sponsor, Asahi Super “Dry” 0.0% lager. The case was proceeding in the Shorter Trials Scheme, which is a streamlined procedure for cases which can be tried in no more than four days. The rules provide for limited disclosure under a modified version of CPR 31.
The present judgment concerned two issues which arose at the pre-trial review:
- The claimants applied under CPR 31.14 for inspection of a sponsorship contract between the defendant and Asahi, which appeared in the list annexed to one of the defendant’s witness statements as required by PD 57AC (ie a list of the documents the witness “has referred to or been referred to for the purpose of providing the evidence set out in their trial witness statement”) but had not been disclosed in the proceedings. (There is a similar provision to CPR 31.14 under PD 57AD which governs disclosure in most cases in the Business and Property Courts, but does not apply under the Shorter Trials Scheme.)
- The claimants applied an order for compulsory mediation before the trial.
Decision
The High Court (Miles J) granted both applications.
Disclosure
The relevant witness statement, from the defendant’s head of partnership marketing for Europe and Africa, stated: “Once the contract between [the defendant] and the sponsor has been signed, the next stage would be induction and planning.” It went on to explain various aspects of the sponsorship between Manchester City and Asahi.
The judge summarised the principles for an application for disclosure under CPR 31.14, including the following:
- The witness statement (or other document) must specifically identify or make direct allusion to the document or class of documents in question – it is not enough that it refers to a transaction which was likely to have been effected by the document.
- Where a document has been mentioned in that sense, the court still retains a discretion to refuse inspection, including on the basis that it would not be reasonable and proportionate.
As to whether the sponsorship contract had been mentioned, the claimants argued that it was sufficient that the document was included in the list provided under PD 57AC, but in any event the body of the witness statement supported the conclusion that it had been mentioned. The defendant argued that reference in the PD 57AC list was not itself sufficient, and the references in the witness statement were references to a relationship rather than a document.
The judge held that the contract was in fact mentioned in the witness statement. The statement had to be read as a whole, including the annexed list. Although the PD 57AC list can include documents the witness has been referred to, as well as those the witness has referred to, the wording in the list taken together with the contents of the statement amounted to a direct allusion to the contract, not merely the sponsorship transaction. The onus was therefore on the defendant to persuade the court that inspection should not be permitted.
The judge said there was “some force” in the defendant’s argument that the document was irrelevant to the case, as the real questions at trial would be whether the branding infringed the claimants’ trade marks or amounted to passing off. However, the contract could have some relevance to whether, for example, the defendant’s use of the branding went beyond Asahi’s normal branding, in particular as to the size of the lettering used for the words “Super” and “Dry”. Further, since the witness had mentioned the contract in his witness statement, the judge considered it fair that the claimants should be able to inspect the document for the purpose of deciding how to cross-examine him.
Compulsory mediation
The judge referred to Churchill v Merthyr Tydfil (see above) in which the Court of Appeal held that the court had power to order unwilling parties to engage in ADR. The CPR had subsequently been amended in light of that case, including: amending the overriding objective to include promoting or using ADR; adding an express case management power to order the parties to participate in ADR; and providing that when giving directions the court must consider whether to order or encourage the parties to participate in ADR.
The judge explained that there was no dispute about the court’s power to order mediation, but the defendant submitted that it should only do so where there was a realistic prospect of success, which it said was not the case here. Both parties wanted their position to be judicially determined. It was also very late in the day to seek the order, as the parties had already spent hundreds of thousands of pounds and the trial was imminent.
Despite the defendant’s arguments, the judge was satisfied that he should order the parties to mediate:
- While there was some force in the defendant’s submission that it was late in the day to seek an order, there could also be some advantage in the parties’ positions having been crystallised through pleadings and witness statements.
- There was also some force in the submission that these were commercial parties with experienced solicitors, so you would expect settlement to have been reached already if it was a realistic possibility. However, experience showed that “bringing the parties together through mediation can overcome an entrenched reluctance of parties to negotiate, even where sincere”. The judge therefore did not accept that a mediation had low prospects of success.
- A mediation in this case would be “short and sharp” and would not significantly disrupt trial preparations.
The judge added a postscript to his judgment to record that the parties had subsequently notified the court that they had settled their dispute.
For further information, please contact:
Alexander Oddy, Partner, Herbert Smith Freehills
Alexander.Oddy@hsf.com
