The courts aren’t afraid to stop play
In our last IHL x Pannone edition we discussed the court’s new approach to ADR following the decision in James Churchill v Merthyr Tydfil County Borough and CPR changes to orders of ADR.
In this edition we consider the latest high-profile case of Superdry v Manchester City Football Club with an insight into our own experience of securing one of the early orders for compulsory mediation.
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DKH Retail Limited and others vs City Football Group Limited
In December 2023, DKH Retail Limited (Superdry) issued trade mark infringement and passing off proceedings against Manchester City Football Cub (City FC). The dispute concerned the use of “SUPER” and “DRY” on players’ training kits, signifying the sponsorship deal between City FC and beer manufacturer Asahi’s Super Dry 0.0% lager.
In November 2024, as part of a pre-trial review, City FC advanced an application for an order for compulsory mediation. City FC relied upon the decision in James Churchill v Merthyr Tydfil County Borough and the CPR changes. It asserted also that mediation works in the most complex of cases and that it was capable of resolution with several variables to the dispute which could lend itself to an out-of-court compromise.
Superdry objected on the basis that the court should only order compulsory mediation if there is a realistic prospect of settlement. Superdry also raised concerns that the trial was imminent, and substantial costs had already been incurred.
Mr Justice Miles ordered the parties to mediate nonetheless and noted that “Experience shows that mediation is capable of cracking even the hardest nuts.” Shortly before trial the parties notified the court that they had settled their dispute.
Pannone’s first compulsory order for mediation
In January 2025, just months after the amendments to the CPR, Pannone Corporate obtained one of the first compulsory orders for mediation against an unwilling opponent in a High Court dispute in the Manchester Business and Property Courts.
The opponent in the case raised arguments similar to that of the Superdry case, that mediation would result in nothing but increased costs. The court was not persuaded and was satisfied that despite the forthcoming trial date, mediation would not impact the parties’ preparations for trial and could be promptly arranged. The order directed a strict timetable by which the parties had to take certain necessary steps to arrange a mediation.
Perhaps unsurprisingly, the litigation settled at mediation.
Early mediation
In both cases, compulsory mediation took place close to trial and successfully concluded the claim. However, the time invested, and the legal costs incurred in pursuing the claim were already significant. Whilst it is rarely ever too late to mediate, parties should consider mediation as early as possible and even prior to the issue of proceedings.
The parties’ positions ought to be known prior to the commencement of proceedings so in many cases, mediation would not be premature. In fact, early mediation may bring the parties together at a time when they are less likely to be entrenched in their position and offers an opportunity to conclude claims quickly and economically. If an early mediation does not result in an agreement, the exercise can nevertheless be incredibly useful in narrowing the issues between the parties.
How we can help?
The prospect of attending mediation in a commercial dispute is now more likely than ever. The process is well established in the dispute landscape, and it is always an option to explore before pressing the button on what can be protracted and costly litigation.
Parties must now think more carefully than ever before refusing an offer to mediate. The courts seem no longer convinced by broad assertions that the parties are diametrically opposed, or that it is simply too late. As a firm, we are keen advocates of mediation. One of the partners in our dispute resolution team is also a qualified commercial mediator. Please do not hesitate to get in touch with the team at Pannone Corporate if you would like to discuss your mediation options further.
If you would like to discuss anything in this article further, please contact:
Emma Haymes
Georgina Bligh-Smith
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