Cases where a refusal to mediate was reasonable
Hurst v Leeming
The fact that a party has a watertight case is no justification for refusing to mediate, nor is the fact that a detailed refutation of the other side’s case has already been supplied. However, a party will not be penalised in costs for a refusal to mediate where they can prove that the mediation has no realistic prospect of success. This will only be the case exceptionally, as here where the judgment of the other party was so difficult and disturbed in relation to the case as to make mediation pointless.
SITA v Wyatt Co (UK) Ltd
It is not unreasonable to refuse to mediate where notice was given too close to the trial and where the party refusing was a Part 20 defendant and the motive of the party suggesting mediation was not to compromise the dispute between itself and the Part 20 defendant but to bring pressure on them to make a large contribution to the settlement achieved with the claimant in the main action.
McCook v Lobo
In this case the merits of the defence were such that the respondent was entitled to refuse to mediate between the trial and appeal. Pill LJ commented:
“This was not a case, in my judgment, where there was scope for mediation by way, for example, of a number of areas where costs might at least have been reduced by discussion, the issues limited, or where there was sufficient room for manoeuvre to make mediation a venture which might have real prospects of success in achieving compromise. This was a case, in my judgment, where in the circumstances the respondent was entitled not to agree to mediation”.
He continued that the respondent’s solicitors should have replied to the other side’s letter suggesting mediation as a matter of courtesy and because of the risk of having to explain to the Court why he did not do so and the risk that a Dunnett type order might be made. He also noted that the Judge giving permission to appeal did not suggest alternative dispute resolution and that this was “wholly unsurprising” in the circumstances.
Valentine v Allen
Where the respondents had made real efforts to settle the dispute, the fact that they had refused the appellant’s offer of mediation did not mean that they should be deprived of their costs of successfully resisting the appeal. The respondents had not only made generous offers but had also sought a “round the table” meeting. The appellant had refused the offers.
Corenso (UK) Ltd v The Burnden Group plc
Mediation is only one form of ADR Negotiation or attempts to use an honest broker may be equally appropriate. Where both parties have made other attempts to settle a dispute, a party should not be penalised in costs because they refuse to mediate at a late stage in the proceedings.
Halsey v Milton Keynes NHS Trust
The defendant was entitled to refuse to mediate where a claim was small, it had little chance of success and the costs of mediation would be as great if not greater than attending trial. It was also relevant that the claimant’s approach had been highly tactical.
Steel v Joy
This RTA claim raised an issue as to whether a case (Performance Cars Ltd v Abraham) is still good law. As such the nature of the dispute was one, which was towards the “intrinsically unsuitable” end of the spectrum. It was also material that the costs of the mediation would have been excessive in comparison with the costs of litigating the issue at trial since the issue was disposed of in about two hours and the mediation involving three parties would have cost about £20,000. The offer of mediation also came comparatively late in the litigation after substantial costs had already been incurred.
Burchell v Bullard
In April 2005 this case was decided by the Court of Appeal. It contains an important warning. The alleged unreasonable conduct, a refusal to mediate, took place before May 2001, and was based on the advice of a surveyor. The advice was given before the law was settled on the subject of cost penalties for failing unreasonably to mediate in Dunnett v Railtrack in 2002 so the Court of Appeal (Lord Justice Ward) did not in this case penalise the refusal but instead issued the following warning to those who might unreasonably refuse offers in the future.
“The profession can no longer with impunity shrug aside reasonable requests to mediate. The parties cannot ignore a proper request to mediate simply because it was made before the claim was issued. With court fees escalating it may be folly to do so. I draw attention, moreover, to paragraph 5.4 of the pre-action protocol for Construction and Engineering Disputes - which I doubt was at the forefront of the parties minds - which expressly requires the parties to consider at a pre-action meeting whether some form of alternative dispute resolution procedure would be more suitable than litigation. These defendants have escaped the imposition of a costs sanction in this case but defendants in a like position in the future can expect little sympathy if they blithely battle on regardless of the alternatives. “
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