Refusing to mediate

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Murray & Another v Bernard [2015] EWHC 2395 (CH)

Facts

The Claimants were successful in this case, but in the costs hearing the Defendant argued that the court should disapply the usual position that the Claimants should be awarded their costs.  This is because, the Defendant argued, the Claimants had failed to take an opportunity to mediate.

At an earlier court hearing, the Claimants refused to mediate and this was recorded in the subsequent court order.  The judge observed at the time that this was a high risk strategy on the part of the Claimants. Subsequently however, the Claimants had a ‘change of heart’ and indicated that they would mediate.  It was at this point that the Defendant said that he could not mediate at the time, due to the volume of material to be considered following the court’s earlier order. In addition the Defendant wanted to amend his defence.

No mediation took place and the Claimants won at trial.  The matter proceeded to costs assessment, where the Defendant made the argument that the Claimants should not be allowed their costs.

Held

The judge did not agree that the Claimants had failed to mediate.  Although the Claimants had undoubtedly refused to mediate at an earlier stage, this single act of refusal was not fatal; “They (the Claimants) are not to be fixed with a once stated but changed intention in relation to mediation”.  The Claimants were perfectly entitled to change their minds, and indeed did so.  The reason that mediation did not then take place was because the Defendant was not ready.  The judge concluded that this was not a basis on which the Claimants should be denied their costs.

Comment

Over the last few years, the courts have imposed costs sanctions on parties that fail to mediate.  Here the Court has taken the time to examine the facts and come to a reasoned decision on whether the Claimants conduct was acceptable.  It would have been interesting to hear the court’s comments on whether the Claimant should have pressed for mediation following the Defendant’s declaration that he was not ready, but the court did not go that far.

What we should take away from this case is that the court will probe a party’s reason for not mediating even going as far as reviewing individual pieces of correspondence if necessary.  Any party to a dispute is well advised to give careful consideration to mediation.  The consequences of not doing so can be significant from a costs perspective.

For more information, help or advice please contact Rob Langley on 0191 211 7975 or [email protected]