A recent decision by the Royal Courts of Justice Senior Courts Costs Office has demonstrated the readiness of the Court to impose costs sanctions when a party to litigation unreasonably refuses to participate in mediation.
In Bristow v Princess Alexandra Hospital NHS Trust , the Judge awarded the costs of detailed assessment to the Claimant on an indemnity basis (no requirement for proportionality) because it was felt that the Defendant could demonstrate no good reason for refusing to mediate.
This decision follows a long running trend of the Court to penalise parties which refuse to attempt settlement through Alternative Dispute Resolution (ADR).
Mediation has become an attractive method to get the parties together around a table and achieve a commercially sensible settlement which suits all involved, thus avoiding the ever increasing costs of civil litigation.
When is it unreasonable to refuse to mediate?
In Halsey v Milton Keynes General NHS Trust , the Court identified a list of principals used to determine whether a party has been unreasonable in refusing to mediate.
The Halsey principals include:
- The nature of the dispute – is ADR appropriate in the case at all?
- The merits of the case – does the refusing party have a much stronger case?
- Other settlement options – have there been other offers or negotiation around settlement?
- Costs of mediation – will the expensive mediation be disproportionate to the claim?
- Delay – is mediation likely to cause delay?
- Prospects of success – is mediation likely to be successful?
These are not only principals but a guide that the parties of dispute should have in mind when considering mediation.
Tim Wheeler who heads up our Dispute Resolution Department is an accredited mediator. If you are in dispute please to not hesitate to contact Tim to discuss – call 01242 505950 or email firstname.lastname@example.org