This question is important because it is clear from cases such as Dunnett v Railtrack PLC that the courts are prepared to use their powers under the CPR to impose costs penalties to punish parties who refuse an offer of mediation. Therefore if you want to refuse an offer you need to do so with justification if you are to avoid such penalties.
The question was considered in detail by the Court of Appeal in Halsey v Milton Keynes General NHS Trust [2004] EWCA (Civ) 576 a case in which both the Law Society and the ADR Group were represented as interested parties.
Firstly Dyson LJ giving the judgment rejected the idea that there should be a presumption in favour of mediation. So the party who made the offer of mediation has to show that their opponent unreasonably refused if costs sanctions are to be imposed. Accepting submissions made by the Law Society the court identified a non-exhaustive list of factors which may be relevant to this issue.
- The nature of the dispute.
- The merits of the case.
- Other settlement methods have been attempted.
- The costs of mediation would be disproportionately high.
- Delay
- Whether the mediation had a reasonable prospect of success.
The judgment gives further detail in respect of each heading. It is not a long judgment and may be an invaluable read. If you are considering advising a client to turn down an offer of mediation then you really need to be able to justify that advice and identify reasons which make the refusal reasonable.
Of course I am a mediator so I don’t want you to refuse an offer to mediate! However, it’s obvious that the vast majority of personal injury cases should be settled by negotiation without the assistance of a neutral third party. Experienced litigators will know when a case should be mediated. I am happy to discuss any cases you are not sure of. I can even set up a confidential conference call with you and your opponent and we can explore what might be achieved.
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